Business

MARKETING STRATEGY

Japanese companies catch on to value of licensing

by Nanae Kemmochi

Kyodo

A growing number of Japanese businesses are eager to license their products, not just for royalties but because they see licensing as an effective marketing strategy, according to a licensing association official.

“Through licensing products, companies can raise awareness of their brands,” said Fumihiko Kusama, managing director of the Japan office of the International Licensing Industry Merchandisers’ Association.

“America has been at the forefront of using licensing as a marketing tool. By contrast, Japanese companies are not fully aware of the strategy or view giving outsiders the rights to their brands as a risk,” he said.

But that is slowly changing, he said, noting Honda Motor Co. has opened its luxury brand Acura to the licensing market.

Carmakers not only obtain royalties from merchandise such as video games and minicars that use their names, but “can reach out to children and teenagers who are their future potential consumers,” Kusama said.

The importance of licensing drew fresh attention among corporations during the June 19-21 International Licensing Expo in New York.

In a rare event, a variety of character goods from various countries — including a giant Pikachu balloon and life-size Transformer robots, both from Japan, Miffy from the Netherlands and SpongeBob mascots from the United States — were assembled in the same room.

More than 500 entertainment companies, manufacturers and designers displayed 6,000 brands and properties at the event in Manhattan.

“Companies participate in the event to license their brands, while manufacturers and agents come looking to acquire them here,” said Charles Riotto, president of the International Licensing Industry Merchandisers Association.

At least 20 companies from Japan exhibited products at the show, according to LIMA Japan.

Licensing of merchandise generates $108.9 billion globally in annual retail sales, said the Licensing Letter, published by EPM Communications, a New York-based publishing, research and consulting firm.

The United States is the industry’s biggest player, accounting for 70 percent of sales, Kusama said. Japan is No. 2, making up 15 percent of the global market.

“Japan is growing strong in the character-licensing category because of the popularity of ‘manga’ (comics) in the U.S.,” Kusama said.

Hidemi Fukuhara, president and chief executive officer of Viz Media LLC, agreed. “The publishing business for manga content is especially bright,” he said.

Sales of manga comic books have been expanding 35 percent a year in the United States in the last three years.

Video game creators, including Nintendo Co. and Sega Sammy Holdings Inc., showed off their popular characters like Super Mario and Sonic the Hedgehog.

A small art company also participated.

“I want to license works by Japanese freelance artists to American manufacturers,” said Sachiko Shintani, president of the small Tokyo company MOVE Art Management.

Arts and design is a small segment of the licensing industry, which generates $9.5 billion globally in retail sales a year.

Rebecca BonBon, the girlish French bulldog created by Yuko Shimizu, the original creator of Hello Kitty, received a lot of attention from expo visitors.

“We’re looking to strike a deal with an apparel manufacturer for teenagers,” said Yuji Hattori of Crown Creative Co., the Japanese licensing agency promoting the character.

Although the licensing industry has not been expanding a lot in recent years, LIMA’s Riotto said, consumer tastes are diversifying, an indication that many companies have a good chance to make deals with manufacturers.

“Not everyone comes looking for one big character anymore,” he said. “People are seeking something that fits their business — whether it’s a movie property, sports brand, fashion brand or work of art.”