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Licensed Retail Sales Flirt With $175 Billion Mark in 2018

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Global licensed retail sales reached $174.54 billion in 2018, according to TLL’s Annual Licensing Business Survey. At just 1.8% growth, this has been the slowest year TLL has tracked since 2013, when licensed retail sales grew just 1.7% worldwide, and 2012, which saw just 1.6% growth.

Sluggish growth in the two largest geographic regions was the primarily culprit behind the lackadaisical global rate, with licensed sales up just 1.4% in the U.S. & Canada to reach $110.49 billion, and up just 1.6% in Europe to hit $34.13 billion in 2018.

Western Europe was impacted by a dramatic slowdown in U.K. licensed sales, although Ireland/Eire continues to do quite well with a relatively dramatic 4% growth spurt. Continental economies such as France, Germany, and Italy observed sub-2% growth, while economies like Spain, Austria, and even Greece recovered from years of flattish growth. The Nordics continued to perform well.

Meanwhile, Central & Eastern Europe is once again observing growth from Russia and loosely connected economies such as the Baltic states and Ukraine. Bucking the trend from previous years, Poland’s overall economy was down and other major players in the region Czech Republic and Hungary were flat at 1% licensed sales growth each.

That was countered with 4.1% growth in Asia, which accounts for a much smaller share of total global sales with $21.89 billion, or 12.5% share. Virtually every country in the region that TLL tracks saw positive growth. Even Japan—which had been gearing up to break out with roughly 2.5% growth (sales growth hasn’t budged in either direction by more than a single percentage point since 2013) before a series of natural disasters in Q4 torpedoed tourism spend—saw its biggest  jump since 2013, percentage-wise, with 0.6% growth.

Meanwhile, licensed sales in Australia/New Zealand recorded the fastest year of growth since 2013 and 2014, when TLL reported 2.0% growth.

Latin America recorded 2.5% growth in 2018, thanks to a strong showing from Brazil and Mexico—but these gains are expected to be wiped out in 2019. Argentina and other smaller economies in the region had falling sales, but their dollar impact was low and didn’t move the total too far.

The Middle East enjoyed steady growth, with strong retail sales in Egypt, the UAE, Saudi Arabia, and Qatar. For 2019, growth is expected to flatten and potentially contract in some countries due to restrictive trade policies. Despite uninspired growth in South Africa, the rest of the continent is enjoying pockets of strong growth (albeit from a small dollar base) centered around growing mid-tier cities.

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Retail Sales of Licensed Merchandise, Worldwide, by Territory, 2017–2018
Note: Numbers may not add up exactly due to rounding.
(Figures in Millions)
Territory Retail Sales, 2018 Retail Sales, 2017 Change, 2017–2018 Market Share, 2018
U.S. & Canada $110,488 $109,010 2.3% 63.3%
Europe $34,133 $33,596 2.2% 19.6%
Western Europe $33,555 $33,033 2.2% 19.2%
Central & Eastern Europe $577 $563 3.1% 0.3%
Asia $21,889 $21,032 3.4% 12.5%
Australia/New Zealand $2,396 $2,330 0.4% 1.4%
Latin America $4,254 $4,149 1.8% 2.4%
Middle East & Africa $988 $970 1.2% 0.6%
Other $389 $391 0.5% 0.2%
Total $174,536 $171,478 2.4% 100.0%

TLL’s list of the top 5 countries as ranked by licensed retail sales remained unchanged from last year, with one small difference: China beat out the U.K. for the No. 4 spot with just over $80 million more in licensed retail sales in 2018. The new ranking for the top countries as ranked by licensed retail sales is now:

  1. U.S.
  2. Japan
  3. Canada
  4. China (mainland)
  5. U.K.

The top 5 countries were responsible for 78.2% of all global sales. For the first time in several years, licensed sales growth for the top 5 bracket under-paced that of the rest of the world—1.7% growth compared to a 2.2% boost, respectively.

Looking Ahead

Half of the respondents to the 2018-19 Annual Survey—just under 50%—say that their licensing business will improve in 2019, even though only 37% saw higher licensed retail sales in 2018. As usual, licensing executives are an optimistic bunch.

But if all goes as expected, global licensed retail sales are expected to grow roughly 2.5% this year to reach $179 billion in 2019. Note that this estimate is highly uncertain, given multiple, dramatic economic instabilities stemming in part from Brexit and the U.S.-China trade war, neither of which have been resolved at the time we crunched our numbers (Q1 2019).

TLL estimates that licensed sales could potentially shrink -1.0% worldwide in 2019 in a worst-case (but not doomsday) scenario. This is assuming flat/declining sales in the U.S., U.K., and Japan; suspended growth in China and India; sliding sales in Europe, the Middle East, and Australia; and (more dramatic) declines in Latin America, among other things.

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