Retail sales of licensed merchandise in Latin America totaled $4.1 billion in 2013, an increase of 3.3% from $3.9 billion in 2012, according to The Licensing Letter’s “International Licensing: A Status Report.”
Since 2011, the licensing business in the region has grown 7.9%. While 3.3% is a respectable rate of increase—less than Central/Eastern Europe and Middle East/Africa but more than every other territory—most licensing executives agree that the region’s growth was less than expected.
In addition, some felt that most of the sales increases were coming from existing licensees expanding their businesses with their current licensors, rather than from new players.
All told, Brazil maintains the greatest share of retail sales of licensed merchandise in the region, 54.6%, with the second-largest territory, Mexico, accounting for 33.5% in 2013. No other territory had a share of more than 4.5%.
Of the major territories, Brazil continues to drive regional growth as well, with retail sales rising 3.9% in 2013 and 9.8% from 2011 to 2013 in that country.
Chile was the second fastest-growing of the big four territories (including Argentina), thanks to a strong economy and sophisticated retail landscape.
Its retail sales of licensed goods were up 3.7% in 2013 and 8.8% since 2011. Mexico also experienced growth, of 2.5% from 2012 to 2013 and of 7.0% from 2011 to 2013.
Many licensors are paying more attention to less-developed countries in the region, as Brazil and Mexico start to mature as licensing markets. While not without their challenges, territories such as Colombia, Peru, and Central America are seeing more licensed merchandise on store shelves.
Retail sales in Brazil grew 3.9% in 2013, versus 2.6% for the Spanish-speaking countries in the region, a differential of 1.3 percentage points. In 2012, in contrast, Brazil grew 5.7%, versus 3.0% for the rest of the territory, a differential of 2.7 percentage points. Mexico has the highest per- capita retail sales of licensed products in Latin America, just slightly higher than Brazil ($11.62 vs. $11.20). Chile’s per-capita sales level was just below those two, at $10.77, in 2013. Other countries in the region have per-capita sales far below these levels.
One trend that is holding true across the region, according to licensing executives based in Latin America, is a decreased reliance on entertainment/character licensing, coupled with growth in demand—from consumers and licensees—for corporate, digital, sports, art, and celebrity-licensed goods.
This has been occurring in almost all territories around the world, but it is a notable trend here, since the licensing landscape in Latin America (especially the Spanish-speaking portions) has long been skewed toward entertainment/ character licensing, even as some of the territories have matured. At the same time, it remains difficult to introduce any new property into retail.
Piracy and counterfeiting continue to be a significant problem in Latin America; Disney and Marvel characters in particular have to fend off a lot of counterfeit merchandise.
Another issue is the high level of withholding taxes, which range from 10% to 35%, depending on the country.
“International Licensing: A Status Report,” details retail sales of licensed merchandise by property type, product category, and geographic origin of properties for 49 countries. For a complete table of contents, including list of 240 exhibits, visit www.epmcom.com/international.