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Licensing in Russia - a growing marketplace
 

 

 

Whilst the Russian retail market took a hit over the last couple of years, with more than 22 million children under the age of 14, it is understandable that licensing in terms of children’s properties continues to grow.

Of course the economic issues have significantly changed the retail landscape. Retail prices have risen significantly in the last two years and the share of consumer spending on non-food items has fallen as consumers have held back from making non-necessary purchases.

However, the situation is changing for the better. Whilst according to NPD in the top ten licensing countries licensed products account for 28% of total toy sales, in Russia this is less, running at around 23% at the moment. 

But this situation is changing and the Russian market is now growing, largely thanks to the success of a combination of home-grown and international properties that have taken the market by storm.

According to NPD, the most popular brands in Russia are international giants Star Wars, Peppa Pig and Disney Princesses followed by home-grown Masha and the Bear and Robocar Poli from South Korea.

The Russian licensing market is, however, comparatively new and has only really developed, other than Disney properties, in the last fifteen years or so. Up until 2014, the industry was growing at an impressive 15% to 25%. However, the RUB/USD exchange rate went into free-fall in 2014 and, as a result, consumer spending was significantly cut back. 

As we said earlier, however, this situation is now changing and the market is once again growing. Major global properties are helping the market expand, together with local properties that have been popular for some time, such as Masha, Fixies, Luntik and Smeshariki.

With outstanding animation quality, humorous content and educational values, Masha in particular has translated into international markets like no other Russian-originated brand. The show is translated into more than 25 languages and shown in over 100 countries with licensees the world over quite literally producing thousands of licensed Masha products Examples of success include Danone in Russia who reported a 13 percent increase in sales when they launched Masha-branded product and Ferrero who sold more than 37 million Kinder Milk slices so-branded with Masha in the Russian Federation. 

Bringing the story up to date, there is a third Masha series currently in production and the property is set to take the important US market by storm.

Moonzy (Luntiks) is also hugely popular with more than 3,000 licensed products. with 472 episodes of 4.5 minutes and more than 5 billion views on YouTube, licensed ranges include over 120 different magazines and 597 books selling 17.5 million copes. In addition, there have been 165 different plush selling 5.8 million items and each year seems more than 200 live performances.

The property is managed by Melnitsa who also manage another popular children’s property The Bakers. This comprises 172 animated episodes of 4.5 minutes each aimed at children aged five to twel. There have been more than 3 billion views on YouTube and the property currently has more than 1500 different licensed products ranging from toys to confectionary, books, bed linen, sporting goods, mobile apps, stationery and live performances. Melnitsa also handle Bogatyrs, the full length animated film based on Russian folklore heroes. The most recent film - the 7th in the series - grossed over $25 million in Russia and there are more than 700 licensed products including toys, mobile apps, food and drink, tableware stationery and books.

Riki Group’s Smeshariki (Kikoriki in International markets) has been a major success story for many years now with an impressive portfolio of animated episodes together with full length features. The most recent movie - Kikoriki Legend of the Golden Dragon - debuted last Spring supported by a number of licensed agreements. These included a real life quest game for children and their families where consumers find themselvess in a setting where they have to find a magic tool to save one of the Kikoriki charaters. The game is managed by international ‘quest’ company Claustrophobia.

Further Kikoriki products included a range of car safety seats and other car accessories branded with Kikoriki and product by Russian partner Autoprofi. Air conditioning for children’s rooms from Hikonix was another unusual licenses for this popular character along with branded medical caps from United Uniforms and a plush range that can be heated in a microwave and will warm children’s hands. On the digital side, the property enjoyed a special showcase page in the biggest online Russian shopping resource, ozon.ru, where toys and games, publishing, cosmetic products and stationery can be purchased.

Moving onto internationally popular properties in Russia and Megalicense, the leading independent agency in the region are enjoying significant success with Peppa Pig which is now one of the top pre-school brands in Russia. This past year has seen significant activity including a best-selling artwork for children, chocolate eggs from Perfeti Van Melle with sales of over 30 million, a special children’s collection for leading children’s retail Detski Mir and a loyalty program and promotion with Russia’s largest network of cafés Shocoladnitsa.

Another major player in the Russian licensing market is Brand4Rent, founded in 2015 by a team of licensing professionals led by ex-Disney executive Denis Kulakov. The company has recognised the potential for licensing beyond children’s characters and also has an art licensing, sports and design company licensing properties as varied as MotoGP, FC Spartak, Pepsi, Gapchinska, Assassin’s Creed, Maya the Bee and Discovery’s Animal Planet.

In terms of the studios of course Disney continues to lead the way with significant success through Star Wars and the Disney Princesses which have been particularly popular.

Nickelodeon Viacom Consumer Products is also increasing its presence in the market with products including the Teenage Mutant Ninja Turtles, SpongeBob SquarePants, Dora the Explorer and Paw Patrol. Nickelodeon currently has more than 2000 licensed products available in Russia including homewares, toys, stationery, party goods and apparel sold through leading retailers in Russia such as Detsky Mir, Korablik, Metro and Aucan amongst others.
In conclusion, the Russian market is showing significant signs of growth both in home-grown properties which dominate categories such as back to school and stationery and internationally known brands which dominate the toy sector. 

More and more quality animation is coming from the region and free television is now accessible to almost all households, together with the new media channels such as YouTube etc bringing popular brands to increasing numbers of consumers. In addition, local brands are continuing to enjoy state support and some of the major TV channels are beginning to develop their own IP for licensing and creating their own licensing departments. However, in terms of licensed products, bearing in mind the size of the market, the larger manufacturers are still the only companies that can provide the level of service and marketing support needed for a successful licensed product. 

Written by 
Francesca Ash
Total Licensing