April 6, 2018
And that's good news for the licensing industry, says one expert.
"If you want to run a successful licensing program," he adds, "then you have to be in these stores. There is no alternative."
Colombia's move to mass-market retailing might be typical of the region, but the positive economic growth the country has experienced over the past three years is not. Despite the continuation throughout this period of a serious armed conflict, high commodity prices, austere government budgets, and focused efforts to reduce public debt have all helped drive this growth, which last year saw real GDP growth at 6.8 percent to a total of $106.8 billion, representing a per capitafigure of $8,600.
Which, despite the improvements that have undoubtedly been made, underlines Alfrandray's point that "Colombia is not a rich country, and the move to mass-market retailing has overwhelmingly been driven by price."
Exito, a local chain, is the dominant player, but as with many other countries, overseas players—in Colombia's case, especially Carrefour—also have a big position. "And," says Alfrandray, "I do not see any significant change to this retail structure in the immediate future."
Nor does this trouble him, as he adds, "From a licensing perspective, the dominance of the mass-market chains is something I welcome." Explaining his reasoning, Alfrandray points out, "there is a big local problem with piracy, and these stores can deliver such huge volumes so quickly, you have the chance to make some decent sales before the pirates get samples to copy, and get them into the marketplace."
These chains are also clearly a part of Colombia's recent retail success story. According to Latin Focus, the rate of retail growth accelerated between January 2005 and January 2006 to 10 percent per annum from a starting point of 6 percent per annum, and the Medellin-based trade show easyFair puts the current annual percentage growth at 11.6 percent.
These chains are vital, but they are not the only licensing opportunity on offer in Colombia.
"I can tell you," says Alfrandray, "that promotional licensing is my main focus in Colombia going forward. I don't have any hard figures on the size of the Colombian promotional market, but it is big and growing. A good consumer promotional deal makes so much more sense than a lot of individual licenses."
This may, in part, explain why, per Alfrandray, "the major properties in Colombia are the Hollywood movie franchises such as
." Although he believes a much more telling reason is the large sums Hollywood majors spend on marketing, he goes on to explain that "media exposure is vital, and it is very difficult to get licensees to invest in marketing, without which it is very difficult, in fact probably impossible, to get a licensing program under way."
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