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Licensing Takes Manufacturers up Value Chain

As shoppers shift from strolling high streets and malls to scrolling screens in their living rooms, many manufacturers are seizing the opportunity to move up the value chain, and turn to licensing.

The three-day HKTDC Hong Kong International Licensing Show, which ran from 7-9 Jan, exemplified this trend, attracting a record attendance of more than 23,000 visitors from about 100 countries and regions.

Organised by the Hong Kong Trade Development Council (HKTDC), the 17th edition of the licensing fair, the world’s second-largest and Asia’s largest event of its kind, ran concurrently with the eighth Asian Licensing Conference (7-8 Jan), which featured some 30 speakers from renowned brands and global licensing experts.

Rapid Market Growth

Licensing Show
HKTDC Executive Director Margaret Fong (right), with Cai Jiacheng, Associate Inspector of the Department of Cultural and Tourism Industries, Ministry of Culture and Tourism of the People’s Republic of China (second right) and HKTDC Assistant Executive Director Stephen Liang (third right), visits the Licensing Show

Speaking at the opening ceremony on 7 Jan, HKTDC Executive Director Margaret Fong said the shifting economics of global manufacturing have created challenges for industry players, with issues such as increasing protectionism and the transition to e-tailing leading many businesses to begin exploring licensing opportunities in a bid to move up the value chain.

Ms Fong noted that the licensing industry has been growing. Global sales of licensed products reached US$271 billion in 2017, an increase of 3.3% on the previous year. The regional story was even more impressive, with sales growing by 5.8% to US$31.6 billion and accounting for 11.6% of the world total. The Mainland China market showed an increase of 10.3%, topping the world growth chart and continuing to be a significant driver of the global licensing industry, she added.

Esports and Content Licensing Opportunities

Unbox
Hong Kong exhibitor Unbox Industries collaborated with non-government organisation Christian Action, inviting 10 local and overseas designers to create a limited-edition designer toy for charity

Nancy Jiang, General Manager, Licensing, for Baidu’s video portal iQIYI, said: “iQIYI started business running an online video platform. We widened our business scope to develop our own content properties and build our own licensing business out of them. Our flagship competition show – The Rap of China – features the street culture of Mainland China. It has become a cultural icon of the country and the IP is generating licensing revenue for iQIYI.”

Jai Wu, Head of LPL Merchandise & Licensing, Riot Games China, explained that the mainland has become the largest esports market globally − and still rising. The mainland had 250 million esports users in 2018, after esports revenue reached US$760 million in 2017. “We have launched a wide variety of licensing programmes, including comics, novels and a reality TV show. We are developing our esports business through cross-platform and cross-sector cooperation,” said Mr Wu.

DTR Talk Connects Exhibitors to Retailers

Turtles
Licensed character brands from around the world add colour to the Hong Kong International Licensing Show

The DTR (Direct-to-Retail) Talk sessions, where successful retailers in Asia shared their intellectual property (IP) sourcing needs and requirements for licensing cooperation, debuted at this year’s conference. Amanda Yuen, Senior Manager Marketing Department Hanshin Department Store Co. Ltd, said: “Online shopping is growing fast, and in order to bring online consumers back to offline, we run activities every festive season, and cooperation with licensed characters is an effective strategy. In the past, licensing cooperation was usually led by brand owners and retailers had little say. By joining the Hong Kong International Licensing Show, we can assume a proactive role in finding partners and we have identified an interesting Hong Kong character brand for further discussion.”

European Brands Tap Asian Markets

First-time exhibitor MotoGP’s Licensing Director of Commercial Department Phaedra Haramis said: “Licensing has helped transform our event IP into a lifestyle brand, which is more sustainable. MotoGP events are staged in different parts of the world, with a strong presence Europe, Japan and Thailand. This is my first time to take part in the show and I feel excited that it opens the door to huge licensing opportunities. Through the business-matching service, I am glad to be lined up with apparel manufacturers from Australia, Hong Kong, Korea, Mainland China, Taiwan, Thailand and Vietnam.”

Another debut exhibitor at the European Lifestyle Brand Forum, Chupa Chups, is a Spanish candy brand with 60 years of history. Licensing Area Manager Marta Ballesteros Codina said:“We have actively developed a cross-border licensing business for promoting the fun and playful image of Chupa Chups. Results at the show are very encouraging. We have located apparel manufacturers from Australia and Mainland China to further explore collaboration.”

Creative Talents Expand Networks

DLAB
The inaugural DLAB Hong Kong Pavilion was a highlight at this year’s show with more than 40 Hong Kong properties exhibiting

“Amid strong competition, forming partnerships through licensing is the key to grow any business,” said Victor Lam, Managing Director of Hong Kong exhibitor Active Works Company Limited. “We met with a Korean artist-cum-brand owner who was attracted to our cute Puzzle Bear IP through the show’s business-matching service. As both parties have our own IPs and strong licensing and marketing teams, we could launch brand cooperation across regions. We have already had several rounds of negotiation.”

Ellen Mok, Director of MiQi, which exhibited in the inaugural DLAB Hong Kong Pavilion, said: “Our brand has collaborated with some big names to roll out jewellery and chocolate collections. Through the business-matching meeting, we were paired up with an Indonesian company which would like to engage our training services, while buyers from Singapore and Malaysia are looking to become our agency in Southeast Asia.”

Conference Enriches Licensing Show

The Asian Licensing Conference ran concurrently with the Licensing Show, giving insights into the latest industry trends, including the fast-growing Asian and mainland markets, content licensing, esports and legal and operational tactics. The event attracted more than 1,300 attendees from around the world.

Related Links
Asian Licensing Conference
Hong Kong International Licensing Show

Content provided by Hong Kong Trade Development Council
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