Hong Kong as a licensing hub in Asia

A Hot Tip about Sales in Hong Kong SAR

Last updated: 8 Feb 2011

Despite the global licensing market plunging by 11% in 2009, China’s licensing market staged an impressive gain of 9% while India’s gained 5%. As Asia’s second largest licensing market after Japan, China has seen per capita spending on licensed merchandise triple in the past five years to US$2.33 (though it is still less than 3% of that of Japan).

 


Three-quarters of the licensors and licensing agents surveyed on the Chinese mainland reported business growth in 2009, compared to 56% in India and 42%-49% in Thailand, Indonesia, Malaysia and the Philippines respectively. Over the next three years, surveyed licensors and licensing agents are most optimistic about business expansion in China and India.
Licensees on the Chinese mainland ascribed to “excellent product design” as the most important factor for their improved business, followed by “popularity of the property” and “successful marketing and promotions”.

 


Characters are most popular in Asia’s licensing market, accounting for close to 40% of Asia’s total, followed by fashion’s 26% (contrasting with the respective global figures of 18% and 23%). Apparel, toys and games, accessories, gifts and kids’ products are the popular licensed merchandise in the markets of China, India and Southeast Asia.


Hong Kong is considered the best location in Asia to manage licensing business in China and Southeast Asia and its role as a licensing hub in Asia will continue to be so in the next three years, according to 70%-86% of the surveyed licensors and licensing agents.


Survey results show that Hong Kong’s licensing firms are relatively more proactive than counterparts from elsewhere to tap the markets in China and Southeast Asia, thanks to their good knowledge and relationships with these markets, professionalism as well as good connections with the international licensors. Hong Kong International Licensing Show (HKILS) is also seen as a good platform for information flows, networking and licensing business.

 


From interviews with Japanese and South Korean licensors, Hong Kong is the place or platform to gather latest information on Asia’s licensing market, identify licensing agents well connected with the Chinese mainland and Southeast Asia, and set up operations to manage regional business. They also give high marks to Hong Kong licensing agents for their global mindset, Greater China knowledge, links to Southeast Asia, licensing expertise as well as strength in communication.

 


Aside from the overwhelming interest in the China market, many respondents plan to do licensing business with Thailand and Malaysia after taking into consideration market maturity and impediments, including intellectual property rights infringement, immaturity and lack of understanding of the licensing market.


Licensors and licensing agents should also note that there is a perception gap between what they thought they are assisting the licensees, and what the licensees actually believed they are receiving. The gap was especially large in the area of anti-piracy measures, with licensees clearly preferring the licensors and licensing agents to reinforce their provision of anti-piracy measures.


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Posted: 03 February 2011, last updated 8 February 2011

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