26 Oct 2010
Survey Identifies Hong Kong as Asia’s Licensing Hub
Professionalism, International Links Cited as Top Advantages
26 October 2010 – Hong Kong is considered the best location in Asia to manage licensing business on the Chinese mainland as well as around Southeast Asia, according to licensors and licensing agents surveyed by the Hong Kong Trade Development Council (HKTDC).
The survey also found that most believe Hong Kong’s regional leadership in licensing will continue for at least the next three years. The positive responses were recorded despite an 11 per cent decline in the global licensing market in 2009, which contrasts with 9 per cent growth in China and 5 per cent in India.
“According to a study conducted by the EPM Communications, the Chinese mainland, Asia’s second largest licensing market after Japan, has seen per capita spending on licensed merchandise triple in the past five years to US$2.33, noted HKTDC Assistant Chief Economist Dickson Ho. “Hong Kong as a regional business hub should be able to play a role in helping licensors and licensing agents tap into this booming market.”
In order to understand the opportunities and challenges facing Hong Kong companies, the HKTDC recently conducted 74 in-depth interviews with licensing companies on the mainland as well as in Hong Kong, India, Indonesia, Japan, Malaysia, the Philippines, South Korea and Thailand.
The structured questionnaire generated quantitative responses from 189 licensors, licensing agents and licensees in the target areas. Among those responding, not less than 70 per cent considered Hong Kong the best location in Asia to manage their business.
“More than 90 per cent gave Hong Kong a positive endorsement as a licensing hub in Asia for the Chinese mainland Southeast Asia markets,” Mr Ho said. “In addition to professionalism and good knowledge of the business, most respondents praised the city’s connection with international licensors as well as markets they consider to be essential.”
Some 94 per cent of respondents voiced optimism about growth prospects for the China market and 77 per cent had the same view regarding India. Mr Ho said the findings indicate that more licensors and licensing agents will use Hong Kong as a platform to open those markets, expanding business opportunities for Hong Kong companies.
Regarding licensed products, those surveyed said items related to Japanese animation and characters and properties related to European and US brands continue to be popular on the mainland. They said popular characters also included mainland creations such as Pleasant Goat and Big Big Wolf as well as Hong Kong’s McMug and McDull.
Asked to identify the most popular product categories for licensed properties on the mainland, 53.8 per cent chose apparel, followed by 49.2 per cent for gifts and accessories, 46.2 per cent stationery and 43.1 per cent publications.
Hong Kong’s Role
Survey respondents from the mainland said factors which boosted licensed products included excellent product design and the popularity of underlying properties, followed by successful promotion and sales strategies.
“Hong Kong people share the same culture and language with mainlanders and have a good understanding of international business,” said Mr Ho. “Hong Kong companies could play a role as a bridge connecting overseas licensors and mainland licensees.”
Regarding problems and issues related to doing business on the mainland, the survey found that product piracy and intellectual property rights violations were the primary concerns. Although more active, the market is still considered immature by many licensors and licensing agents, who often worry that industry players on the mainland do not fully understand licensing market conditions. Other issues cited by respondents included insufficient knowledge about the licensees, a lack of networks with retailers and complicated procedures for registration of properties.
“Licensors and licensing agents face similar problems when they do business in Southeast Asia and India,” said Mr Ho. “That seems to be precisely why the survey indicates that businesses have high hopes for Hong Kong playing a greater role as licensing hub.”
Citing the mainland market as an example, Mr Ho compared Hong Kong Hong Kong licensors and licensing agents with their counterparts elsewhere by saying the city’s professionals are more likely to provide event support, organise public relation activities and advise on licensing business directions.
“Based on the interviews with Japanese and South Korean licensors, Hong Kong is the place to gather the 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,” said Mr Ho. “They also give high marks to Hong Kong licensing agents for their global mindset.”
Please contact the HKTDC's Corporate Communication Department:
Tel: (852) 2584 4216
About the HKTDC
A statutory body established in 1966, the Hong Kong Trade Development Council (HKTDC) is the international marketing arm for Hong Kong-based traders, manufacturers and service providers. With more than 40 global offices, including 11 on the Chinese mainland, the HKTDC promotes Hong Kong as a platform for doing business with China and throughout Asia. The HKTDC also organises trade fairs and business missions to connect companies with opportunities in Hong Kong and on the mainland, while providing information via trade publications, research reports and online. For more information, please visit: www.hktdc.com