July 28, 2020
An Analysis of Licensing International’s 2020 Global Licensing Industry Study
With a consistent foundation of growth every year, 2020 is set to produce positive outcomes, even during the COVID-19 pandemic.
The Entertainment/Character Sector Continues To Prevail
As the leading market share category in 2019, the entertainment/character sector held around 43.8 percent of the total global licensing market. This sector is followed by corporate brands (20.5 percent), fashion (11.5 percent) and sports (10 percent). Though the shelter-in-place order was placed in a number of countries, it didn’t stop consumers from turning to licensed goods such as puzzles and masks to adapt to the new normal. It’s noted by Licensing International that the fastest growing sectors are art by 10 percent and non-profit with an 18 percent rise. This is caused by consumers turning to “maker markets” like Etsy and the extended pressures of non-profit support during the pandemic and other external factors occurring this year.
US/Canada Takes More Than Half of Global Sales Revenue
While US/Canada remain the top players within the licensing industry to lead the market, the North and South Asia/Pacific region experienced strong year-over-year growth heading into 2019. As Licensing International’s President, Maura Regan, stated, “The numbers also illustrate the solid foundation that the licensing business model offers to businesses of all sorts as they work through the impacts of Coronavirus this year and eagerly await the ‘next normal’ we all will face,” (Licensing International, 2020).
Six Trends Paving Their Way Into 2020
After a survey conducted among different licensing professionals, Licensing International highlights the ongoing trends prominent in 2019 that will affect the licensing industry in 2020. The first trend we see is the rise of sustainability. Cause-related marketing issues are being brought to light by trustworthy brands who are doing their part to release socially conscious and environmentally-friendly products. Direct-To-Retail (DTR) licensing is also being mentioned often between brand owners and potential licensees. As commented by a European licensee, “All the major players now have gone with DTR licensing models such as Primark, Inditex and H&M.” (Licensing International, 2020).
Ecommerce is always evolving, and the strategies placed are toward trustworthy outlets such as brands moving their products to Amazon due its reliability and popularity with young consumers. This trend allows retailers to improve their overall margins and reach newer opportunities this year. Location-Based Licensing that focuses on consumer experience and entertainment has come into focus in 2019 and will continue to do so in 2020. Retails are beginning to shift their goals to increasingly deepen consumer engagement and social buzz. Additionally, as we’ve seen since the beginning of on-demand streaming and influencer marketing through platforms like Twitch, eSports has been at a constant rise to the point where characters are being born in the kids’ market within the licensing industry. Lastly, we’ve seen consumer behavior shift where many are seeking comfort with purchasing from tried and true brands. Now retailers are starting to play it safe with their brand selection and are looking to stray away from always seeking out the latest hot brand or character.
With the steady growth by all countries in the top sectors within the licensing industry, they were able to overcome and surpass expectations concerning sales revenue growth with all industries. As we reach the next new normal, we’re excited to witness the changes and upcoming trends in how consumers and brand trust affect the growth of these sectors.
Licensing International. July 15, 2020. The 2020 Annual Global Licensing Industry Study.