CAA-GBG's Kaori Kurobe discusses the Japanese market, what the brand management group expects from the show and more.
|Kaori Kurobe, general manager, CAA-GBG|
Why does the Japanese market offer strong opportunities for growth?
Since the Japanese characters and animation properties have continuous popularity and a strong fan base, the Japanese market will keep growing based on such strong properties.
Brand licensing is, compared to that of the Western market, largely underdeveloped. In other words, we can anticipate more growth in various areas.
You mentioned that you expect more growth in various areas. In which categories and fields do you anticipate that growth?
It's not easy to say in a few words, as available merchandise categories and appropriate fields of licensing differ from one brand to another. Generally in Japan, the majority of brand licensing is still built by Western brands and not Japanese brands, and has centered around apparel and complementary fashion items. Moving forward, we anticipate expanding the business into new fields such as food and beverage, hard goods and services.
Can you give us any Western examples of success for brand licensing?
Again, the examples vary per brand. Our successful case studies span food and beverage, DTR and franchise, cosmetics and perfume, collaborations with designers and services.
Identify the specific brands that you are targeting for expansion in Japan. Also tell us why you are focusing on these brands and if you have any particular promotional plan for them.
Playboy is our most focused brand for this year as we became its global agent this past January in an effort to expand the program in the global level. The program was built around fashion categories in Japan and we see big opportunities in the new area such as food and beverage, health and beauty, hard goods, services, etc. We will work closely with the brand owner and provide necessary support, especially in the creative and marketing areas, to make the products more coordinated and suitable for the market while offering new and innovative ideas. Collaboration with top fashion brands will remain to make the brand inspiring and on-trend at high positions.
NYC is another new brand whose agent we became in 2016 and has become our focus in 2017. The best part of the deal is that we can license all the properties that relate to New York City. In addition to the popular NYPD and FDNY, we can also utilize yellow cabs and Central Park, various street addresses like Times Square and Fifth Avenue, relevant street signage, and various designs and logos that relate to the five boroughs. Together with the latest popularity of the New York trends, the brand has huge potential. Further, the range of licensing activities is not limited to conventional merchandising. We can organize various events and promotions in collaboration with New York City (e.g. we may be able to organize a kind of "secret tour" that participants can go into restricted or special areas of the city which can be permitted by NYC).
What are the characteristics of your brands that you believe will make them popular among Japanese consumers?
The properties that have a clear background and history, with a well-established brand value and image. They should have assets appropriate to the Japanese market, or be able to develop such assets.
What is the most important point that Japanese consumers consider?
Japanese consumers emphasize the background and history of a brand, or how the brand has evolved. They also see value in the brand's credibility and originality. Authenticity is the most important point. Any achievement in the overseas market could be a big factor as well. Brands will not reach consumers if they are not presented with a core essence or philosophy. While awareness level is quite important, there actually are two different ends: one group likes known brands, and another prefers something niche and less known. If the awareness level is high and the brand is well-established, the licensing could be developed from mass market to high-end; but generally the entire program tends to be for the mass market and the majority of the products would be offered at a lower price. If the brand is less known, but strongly supported by core consumers, we might set a higher price and offer higher quality products, though it might end up with smaller business scale.
Do you have any examples of success in which you have established the brand value and brand image?
We have many examples, as our job is to establish the brand image and brand value as part of the brand extension program. To name some, Mercedes-Benz Purfume, Jeep MTB, Hershey's Ice Cream, Laura Ashley Uniform, Jane Packer Flower business and more.
What are some of the key initiatives that you have implemented in Japan?
Expanding the food and beverage category, setting up the Japanese brands into the global licensing program, DTR business development, etc.
You mentioned setting up Japanese brands into the global licensing program. Does this mean that you're going to enhance the exposure of Japanese brands such as Mottainai in overseas markets?
Precisely. There are lots of Japanese brands that have potential in the global market, but very few are working through the full-fledged brand extension. The basic understanding over the concept of brand extension is still at low level due to the unique culture and history of Japan; most of the successful Japanese companies have grown as manufacturers with product-oriented culture so they simply cannot understand the concept of a brand being independent and separated from their own products. They are also very conservative to try new business and tend to see negative sides, so it is important to explain the benefit of brand extention and it is actually a low-risk solution for the brand if the program is managed by the expert agent.
What retailers or product categories are you targeting for your licensed products?
It really depends on the brands and their strategies, but here are the main targets:
- Specialty stores, GMS and online
- Food and beverage, fashion and sports
What are the major differences between the licensing market in Japan and overseas?
While the quality of the products is generally higher, it always takes longer for decision making and to achieve certain result in Japan. There's a strong tendency to start something new with a small quantity for a short time as a test, instead of making a strong commitment at first for a large scale of business. They resist any advance investment and are quite conservative. On the other hand, once something is successful you will enjoy a long-term relationship with them.
Are there any cases in which the decision takes time because the licensing business is not recognized in Japan?
Often the case is that a company takes time to decide on whether to start a licensing business, or a company is reluctant to start the business due to a past failure or some sort of concern. In reality, the chance of success should be high by minimizing risks and setting up an arrangement or contract that would create a win-win relationship for both the licensees and licensors. This can be well-operated by the professional licensing agents whose role is not just simply to introduce the brands, but to manage the brand program effectively and strategically; but the role and existence of the agency is not recognized in Japan yet, which may be another reason why people are hesitant to make the decision.
How about the overseas market?
It seems that there are bigger deals happening in the territories where there is high demand for brands, such as China and the Middle East. However, managing the licensing program in these countries often presents a challenge, as they just tend to use the brand by their own way rather than following brand's strategy, as they paid big money.
What are your primary reasons for exhibiting at Licensing Expo Japan?
Because UBM is the largest trade show organizer within the licensing industry, and it already has a strong track record in the overseas market
What do you expect from LEJ?
Meeting with companies and people who might potentially become our new licensing partners. We look forward to a show that is bustling with attendees and exhibitors, and creates a breeding ground for business development. As this is the largest licensing trade show, we expect lots of the leading players and various companies in the industry to be present and appeal to newcomers.
What do you expect from the attendees?
We're hoping to meet with people who can work as a potential partner, or anyone who's never been involved in the business but is interested, or any retailer. We expect to have business discussions as much as possible—since Japanese people are usually shy and not proactively speaking or asking, we would like UBM to encourage active meetings and information sharing/gathering the attendees as an organizer where possible and then make the show successful together.