Brand Extension
Strategists
Looking East: Licensing Potential in China and Beyond

Licensing provides a unique opportunity for western brands to enter new markets and reach new consumers and with China being one of the world’s biggest markets, licensing in Asia is a critical focus for leading companies. The recent China Licensing Expo at the New International Expo Center in Shanghai drew participation from over eight hundred brands and companies exploring licensing and partnership opportunities in the region. With Asia representing eight of the top ten global markets and over forty percent of the world’s economy, it is impossible to overlook the huge potential for licensing in countries like China, Japan, Korea, India and elsewhere, where economies are growing and the importance of brand awareness and recognition is on the rise.

Brand licensing is especially appealing as a majority of Chinese consumers have a lack of faith in their domestic brands’ authenticity and quality. Besides phones (Xiami) and e-commerce platforms (Alibaba), in China most categories favor western brands over Chinese.  According to a frog’s survey of Chinese consumers, 63.5% of participants preferred foreign brands over Chinese equivalents, naming quality  and safety as primary reasons.  

This preference for western products can be found in the luxury goods sector, nutrition and household goods, amongst others, and is an encouraging statistic for those looking to break into the Chinese market.**

As licensing becomes a burgeoning industry in China, there are some key elements that play and will continue to play a role in the success of a brand’s licensing program in the region. Chief amongst these is having a team with a deep understanding and knowledge of the local Asian markets and cultures. Proper alignment with the needs, desires and regulations of a specific region is vital when embarking on a program to expand a brand’s reach.

For example, in China retail and distribution infrastructure is fragmented and many retailers do not have the product development and sourcing needed to get licensed products on their shelves. Also, a majority of potential manufacturing licensees are structured for exporting and do not have the distribution capabilities necessary to get licensed products to domestic consumers. Design, product development and brand management capabilities are all vital components necessary for the success of a licensing program. When dealing internationally it is paramount to have a well-rounded understanding on all aspects of making a partnership a success.

During a speech on Keys to Success in Licensing at the China Licensing Summit in Shanghai, LMCA CEO Allan Feldman noted: “Now that the business world has seen the bottom-line impact licensing can have on revenue and brand value, we expect brand licensing in China to grow much faster than it did in North America.” IMG_5449

 

While there are many factors that must be considered when working in new and different markets, there are plenty of highly profitable opportunities for western brands to break into the Asian markets through licensing. The popularity of the China Licensing Expo last week is a prime example of the growing interest and need for quality brand names in the Asian markets. It was a promising showcase of the growing trend of corporate brand licensing expansion in the region.LMCA opened our Asian headquarters in Shanghai in 2004. Since then we have used this footprint in the Asian market to help companies across the world to develop and grow their China and Asian presence. In 2016, LMCA Asia formed a joint venture called LOLA (LMCA OASIS Lifestyle Asia) to bring the same brand extension experience to key global lifestyle and entertainment brands.

Learn more about how licensing can help your brand increase revenue and extends its reach: Contact Us Today

 

**https://designmind.frogdesign.com/2013/04/building-brands-china

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