TOTAL LICENSING
ASIA
Market
Update
By Phil Eisenstat
Japan’s licensing market - the world’s licensees are losing market share. young designers, art school students,
second most lucrative and probably Japanese publishing houses bring out software engineers and other creative
Copyrights Asia most heavily licensed market on a new manga characters almost every hopefuls as they attempt to create the
Tel: 03 (3377) 8300
per-capita basis - is in constant mo- month, and publishers are turning next Hello Kitty.
Fax: 03 (3377) 8320
tion. The market accommodates an out millions of copies of their phone With the success of manga and
eisenstat@copyrights.co.jp
incredible number of properties at so book-sized manga magazines each software game-based characters, a
many layers of retail, with change oc- week. The sheer volume of such ef- wonderful creative environment has
curring at lightening pace; new prop- forts-which amounts to a “whatever emerged in Japan. A large number
“Since reviewing
erties, both home-grown and foreign- sticks” approach-ensures at least a of design and animation schools have
the Japanese
based, enter the market continuously minimal audience, with some manga opened up, along with small, cutting-
market for Total while just as many seem to disappear properties going on to even greater edge boutiques which highlight young,
Licensing last year,
with startling regularity. publishing heights and maybe even an risk-taking creators. In the long term,
we’ve observed a
anime (animated) television and DVD this is a great development which
few interesting
Market Fragmentation series. insures that Japan will remain at the
developments in
Since 2003 the Japanese economy has Does this mean that licensing op- forefront of brand and licensed char-
the retail structure
grown at a steady pace for a market portunities have shrunk, or that the acter innovation. For the short term,
that is so mature. The decade-and- market is turning away from character however, established licensors are
and at the property
a-half recession that stopped growth and designer brands? Absolutely not; finding it more difficult to maintain
level that,
cold in the 90’s has faded and cor- Japan can support hundreds of prop- their market share. The glut of charac-
depending on their
porate profits are again on the rise. erties. An increase in the number ters combined with underperforming
relative positioning
However, what is not so evident of foreign and domestic properties stores has made for less shelf space
in the market, can among such a positive turnaround is over the past year has demonstrated for small/mid-sized licensed proper-
either benefit or
the fact that almost all of Japan’s re- Japan’s resilience as a licensed prop- ties. Consequently, mainstream retail-
hurt property
cent growth has been driven by ex- erty incubator. Japan is a character- ers have become risk-averse.
owners and agents.”
ports-mainly from Japan’s world class obsessed country where even the gas
automobile and consumer electronics and water companies, the bus com- So, What’s Selling in Such a
sectors. Unfortunately for licensors, panies and some large chain stores Fragmented Market?
the level of consumer spending is still sport their own cute-looking animal Imported Merchandise – Despite the
anemic and this has impacted sales of “spokescharacter”. strong Euro and weak Japanese Yen
licensed product. Some of these new properties and which has slowed imported goods
Another factor affecting revenue the smaller established ones are find- purchases, the market for premium
growth of the licensed market is frag- ing a retail home in small, independent imported goods is still the second
mentation - and this is the one issue designers’ boutiques in the trendset- largest in the world. Japanese con-
that directly affects licensors. ting areas of Tokyo and Osaka. This is sumers will pay a premium even above
The combination of large, how, initially, the buzz for Sponge Bob the normally high prices for imported
medium-sized and very Square Pants began. Now, Sponge merchandise, and this is borne out
new properties has se- Bob has become a major property in by the decision of several of the ma-
verely fragmented the Japan with the financial and market- jor fashion houses (Gucci, Hermes,
market and cut into ing support that large and successful etc.) to further raise prices on their
the market share of all properties enjoy. already expensive products. Such a
established properties in Ja- For every Sponge Bob or Rilakuma price increase will, at least temporar-
pan. The percentages of market share (a lovable bear character) there are ily, create caution from the mid-sized
of the largest licensors have declined, scores of fly-by-night properties. The importers of licensed product in pur-
and even the mighty Pooh, which is chances for a property’s long-term chasing product that is expensive and
still mighty, has lost market share success is dependent on a compelling untested in the market. However,
due to the jumble of new and storyline, “cute” characters, and some once prices stabilize and the market
old properties alike. degree of marketing support and adjusts to the new price regime, re-
With a licensing pie so a bit of luck. Such daunting criteria newed interest in imported licensed
segmented, mainstream presents a challenge to the scores of product is expected.
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