Home > Hong Kong Means Business > Market Spotlight

Subscribe


 Print  Email
Content provided by :  Hong Kong Trade Development Council
 

Licensed for Growth in China

 The Simpsons
 

IMG handles several major licensing properties including FOX channel’s The Simpsons

The Chinese mainland is one of the world’s fastest-growing licensing markets, with local and international brands keen to enter into licensing deals there.  Licensing agents such as IMG, which represents such international brands as the PGA Tour and 20th Century Fox films among others, have found success on the mainland. Safeguarding intellectual property rights, nevertheless, remains an issue in a market that is rapidly evolving. 

Trademark Boost

IMG is the world’s largest sports, entertainment and media company, and its licensing unit is one of its key business areas. It establishes the licensing strategy, negotiation, execution of contracts and monitoring and managing of the licensees for its clients, according to Miki Yamamoto, Senior Vice President, IMG Licensing Asia. 

The company recently entered into an agreement with several Hearst Publishing brands, including Cosmopolitan, Esquire and Harpers Bazaar magazines, to bring them to the Asian market. Before any deal is secured, Ms Yamamoto said IMG first focuses on understanding the brands and their DNA.  “Then we set up the strategy to translate the DNA appropriately to the programmes that meet the Asian market demand,” she said. 

Miki Yamamoto 

Miki Yamamoto, Senior Vice President, IMG Licensing Asia, says understanding a brand’s DNA is key to licensing success

 

While business is brisk for IMG in China, it is not without its problems. “Typical character licensing is getting very difficult, and retail spaces are getting more and more competitive,” said Ms Yamamoto, who noted that collaborations with fashion brands and licensing properties is a successful trend in Asia. She said that such collaborations allow the partners to share retail space while generating new consumers. This, she added, also addresses the need among Chinese retailers to stand out in an increasingly crowded market. 

Another trend in China’s licensing market is the growth of trademarks. “Most companies in China are now seeking to acquire trademarks instead of licensing business, which will give them a more stable future for further investment,” said Ms Yamamoto. 

Expanding the Licensing Model  

As traditional OEM/ODM companies seek to move up the value chain, many have turned to licensing as a way of doing that. Hong Kong-based Metalware Tech designs and develops licensed products and retail programmes. A manufacturer and licensee in Hong Kong, the company also provides a range of OEM/ODM services for other licensees globally. In 2013, it began developing its own properties to license to other parties. It’s a licensee for such international properties as DC Comics, Despicable Me 2 and the Transformers movies, as well as a number of popular Japanese animation properties such as Gundam and Masked Riders. 

 Andrew Lee
 

Chinese characters are increasingly popular licensing properties, says Metalware Tech Director Andrew Lee 

“In terms of the property trend, at the moment, a lot of China licensees are still very much following the US cinematic trend such as Marvel and Hasbro, but locally designed characters are also popular,” said Metalware Tech Director Andrew Lee. 

The company’s biggest markets in China are in the consumer electronics and mobile phone accessories sector. “The technology market is stronger than ever with growing demand of tech accessories every year,” Mr Lee said. 

IP Issues

With more than 20 years’ licensing experience, PPW is the licensing agent for a diverse range of brands, including Smurfs, the Discovery Channel and such popular games as Talking Friends, Candy Crush and Angry Birds. 

“Licensing in China is getting more diversified now due to online media, which has led to the extension into game characters like Talking Friends, Candy Crush and lifestyle branding like Discovery channels and Route 66,” said Ivan Chan, CEO for PPW. “Brands like the Smurfs are using Smurfs apps games to increase their exposure.” The mainland is PPW’s biggest market, where most of its clients are looking for licensing opportunities to increase brand image and value. 

Priscilla Wong 

Dr Priscilla Wong, Managing Director, Longwise, says intense competition in the mainland licensing market has led her company to look at untapped sectors, including art licensing

 
One of its most successful licensing projects now is the Smurfs. “After The Smurfs 2 and the Smurfs apps game, the characters are extending into the teen segment, and Smurfs are now becoming well-known across all ages,” said Mr Chan. 

Licensing, he added, is not just applied to physical products, saying that more brand owners are targeting not only those who purchase products. “We are seeing people setting up thematic restaurants and coffee shops and using social media to give fun to fans,” he said. 

With the mainland licensing market still in its infancy, Mr Chan said that  PPW has set up a legal department to help safeguard its clients' IP.

“Licensing is very new, but growing fast in China, and as this is a very specialised business, we have difficulties finding experienced manpower. IP rights policy is still under construction in China right now, and is still constantly being updated.” 

Eye on China 

  photo
 

Art licensing is a growing sector on the Chinese mainland, where Longwise holds the master license of the Van Gogh art brand

Smaller profit margins in the export market is forcing manufacturers to turn to licensing. “Since the profit margin of exports is decreasing, most of the factories in China would like to focus on the local market,” said Dr Priscilla Wong, Managing Director, Longwise. 

Focusing on the China and Southeast Asian markets, Longwise is the master licensee for Fiorucci and Van Gogh in Asia. “We focus on lifestyle products, including ladieswear, menswear, children’s wear, handbags, watch, eyewear, leather goods and accessories.” Ms Wong noted that brand awareness can help their clients to strengthen their bargaining power with shopping malls and develop their sales channels.  

Longwise is focused on growing the China market. This, she said, will help their clients when looking for business partners, including franchisees, and promoting their branded products. 

Ms Wong said it’s essential that brands reflect current trends or risk elimination. She noted that Longwise is looking at new niches to continue its mainland expansion. 

“There are a lot of fashion brands and character brands in the market, and competition for licensing is intense, she said" "But now, people are looking for new brands, and we think art brands like Van Gogh will be more and more popular. Art licensing is limited in the market, and since we are the master licensee of the Van Gogh, this can only be good for us.”

Related Links
IMG  
Longwise 
Metalware Tech  
PPW

 Print  Email