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Building Business through Licensing

Stanley Yeung 

Stanley Yeung, President of Yeung’s Group Inc, found new opportunities when he branched into the licensing business  


When Stanley Yeung took over his family’s OEM business 15 years ago, he noticed that expansion opportunities in the gifts and premium business were fast dwindling. “I didn’t see any more room especially when we produce in China, where labour costs are rising,” said the President of Yeung’s Group Inc. “I realised I had to have my own brands.”

Mr Yeung explored a lead to produce products for the popular Hong Kong book character Maggiology.  At the time, though, he said he didn’t realise the business potential extended beyond manufacturing.

“I didn’t know anything about licensing,” he said. But seeing that previous clients’ licensed orders would fetch “10 times my selling price” planted the seed for his future business.

Mr Yeung convinced the creator of Maggiology, which had turned down licensing offers before, to branch out into products. When they launched, the products sold out in a month, with 80,000 sales transactions. “The sale was amazing that first month, but I got ambitious,” he recalled.  “I thought that if I made 25 products, that would result in even more sales.” Instead, he said that the market became saturated and sales slowed.

Strategy Revised

 Hong Kong character Maggiology was Yeung’s Group’s first licensed character

Hong Kong character Maggiology was
Yeung’s Group’s first licensed character

To keep the momentum, Mr Yeung partnered with other businesses interested in licensing, including an electronics store chain, supermarkets and restaurants, using their resources to promote Maggiology. As the licensing agent and licensee, Mr Yeung received licensing fees, which he initially offered at “break-even cost.”

The licensing campaigns proved popular and his partners began asking for more properties to promote. Realising the need to start building a licensing portfolio, Mr Yeung began acquiring one license each year. To date, the company has acquired six properties, including two overseas brands.

Rody Revival

Acquiring the license for Rody, the popular children’s horse character, was “a breakthrough,” says Mr Yeung, who met the Japanese licensor through a business-matching meeting at the Hong Kong International Licensing Show in 2010. “They were looking for someone who could effectively promote what’s essentially a new brand for the Greater China market. Our experience building the Maggiology license from scratch convinced the Japanese company that we were the right partners for them,” he said.

Managing Licensing

Shopping mall promotional events, such as this one for the popular horse character Rody, help boost  

Shopping mall promotional events, such as this one for the popular horse character Rody, help boost brand awareness 

Learning the ins and outs of licensing has been a process of trial and error, said Mr Yeung, who noted that developing new contacts is key; from retailers to marketing firms, restaurants and electronics chains. He has collaborated with companies on shopping mall events, and even on a redemption programme with the FOX channel.

The scope of work in his licensing business has grown to the extent that he has hired an in-house designer and merchandisers, while outsourcing work for production and promotion and to collect licensing fees. He formally sealed his entry into the industry about a year ago by setting up the company Brand Art as the licensing arm of Yeung’s Group.

As companies in the gifts and premium business start to appreciate how licensing can add value to their business, he said trade events, such as the one in Hong Kong, are now key events to build contacts. “At the Hong Kong International Licensing Show, I meet the right buyers, including marketing agents and retailers, which are keen to collaborate with brands to generate more business.”

His advice to businesses interested in branching out into licensing: spend more effort promoting the brand through social media and partnering with other companies that have larger marketing resources. “You need to build a fan base and create a buzz first before spending a fortune on making the products,” he said.

China Licensing

 Yeung’s Group recently acquired the license for the Japanese robot character This is Not It!, which

Yeung’s Group recently acquired the license for the Japanese robot character This is Not It!, which launched in Hong Kong
this year

Mr Yeung is continually looking for companies to partner with in Greater China, including the Chinese mainland, which he says is a very different market. “The licensing market is slowly opening there; they are now more open to the idea.” While local brands are gaining ground, he said that overseas properties are still more popular, and Hong Kong serves as the gateway for international properties to enter the mainland.

This is Not It

Mr Yeung recently acquired another overseas brand. This is Not It! a quirky robot character that has taken Japan by storm, launched in Hong Kong earlier this year. His company is also working on promotional projects to coincide with the 30th anniversary of Rody next year, which also happens to be the Year of the Horse in the Lunar calendar.

In the meantime, Mr Yeung remains on the look-out to fill the gaps in his licensing portfolio, including brands that cater to children, students and young adults. Some of them are gender-specific.

He said choosing the right brand license is often based on instinct. “It’s hard to tell which property will sell, but I look at it from a customer’s point of view and try to find something original. I often stay away from common animal themes unless there’s a special story behind it.”

Related Link
Brand Art

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