1 Jan 2003
Licensing Business Enjoys Space To Expand In Asia(HKTDC Enterprise, Vol 01,2003)
Vol 1, 2003
A strong legal and business infrastructure underscores Hong Kong's considerable strength and massive potential as a regional licensing hub.
Industry statistics show Asian licensing turnover of US$25bn in 2000, up 100% on 1999 and accounting for 18% of the global market.
In much of Asia, the licensing industry is ripe for development. "Hong Kong has a small domestic market, but can participate in market expansion throughout Asia, including on the Chinese mainland," says Hong Kong Trade Development Council (TDC) services promotion director Alan Wong. "Companies based in Hong Kong can become licensees to make and distribute licensed products throughout the region," Wong adds.
Acting as licensing agents, or go-betweens for overseas licensors, is another appropriate niche. "Some big entities, like Warner Bros., Mattel and the National Basketball Assn (NBA), already have offices in Hong Kong. Their presence indicates we can offer the right environment and be of service to them, especially in finding licensees on the Chinese mainland," Wong says.
"Hong Kong has long served as a centre for the design, manufacture and marketing of Barbie dolls, fashion and accessories. Its proximity to North Asian markets offers a significant growth opportunity," says Barbie Consumer Products Products (Asia) director Robyn Gurd.
Hong Kong traders understand mainland culture while speaking Cantonese and often Putonghua, the necessary languages.
Yet another angle has Hong Kong companies developing their own properties for licensing. This is a budding industry, notably in the entertainment sector. For example, licensing opportunities in toys and apparel surround movie star Jackie Chan.
Licensing players say Hong Kong is already a de facto regional centre. "There are no really serious competitors, because so much licensing activity happens in Hong Kong. However, it is important for us to capitalise on our advantages," says Dave Sharat, marketing director at Animation Int'l Ltd, a licensing agent representing Japanese studios.
One significant step was the Hong Kong Licensing Show and Conference held on April 24-25, 2002, concurrently with the Hong Kong Gifts & Premium Fair. The show, Hong Kong's first such event, offered a one-stop venue for licensing cooperation.
Twenty exhibitors representing properties and trademarks from the US, Japan, South Korea and Hong Kong attracted more than 7,000 visitors. Garments, stationery and gifts and premiums were displayed, along with more than 100 licensed characters and trademarks. There were properties from Cambridge and Oxford universities and the University of California in Los Angeles (UCLA), plus ubiquitous brands like Pepsi and Hallmark.
Entertainment or character-related work accounts for almost half of the global licensing business, says the US-based Int'l Licensing Industry Merchandisers' Assn. Trade brands and fashion are the next largest categories, followed by sports, universities, art, music, publishing and non-profit groupings.
A recent survey of 134 relevant companies shows global expansion on the agenda. Warner Bros., for example, hopes that Bugs Bunny and its other cartoon characters will captivate Asian consumers, much as they have Westerners.
"In Asia, the licensing industry began 10-20 years ago, whereas it is a half-century old in the US and Europe," says Warner Bros. vice president for Greater China and Southeast Asia Mickie Leong.
"Yet with economic advances in much of Asia, many products, brands and habits are quite desirable. We see great potential to develop our business here."
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