Originally published in Total Licensing China, March 2021 – View magazine here
From our offices in Shanghai, China, LMCA Asia represents some of the most iconic, global consumer electronics brands for licensing partnerships in China and SE Asia. As the Chinese government continues to focus on the development of the local consumer market, opportunities for growth in the CE sector abound, but the increasing competitiveness of the market in the years ahead demands that companies find new ways to differentiate their products and reach new consumer segments to keep growing their businesses. Today, even some of China’s largest domestic brands in the CE space are entering into licensing partnerships with international brands to serve more affluent consumers and generate higher profits. But successfully managing a licensed corporate brand in many industries, including CE, requires a significant amount of investment and cooperation with the licensor.
Dedicated Team – First and foremost, licensees must be prepared to invest in a dedicated team of professionals across the primary disciplines that will support the licensing program. At a minimum, licensees should have dedicated staff across: General Management, Product Design/Development, Product Management, Sales, Marketing and Customer Care. Simply borrowing resources from your existing brand or business might seem cost-effective, particularly in the early stages of your program’s development, but the long-term success of your program will depend upon focused resources that are living and breathing the brand every day.
Communication and Cooperation with the Licensor – Effective licensing partnerships are just that, partnerships! As the owner of the brand, one of the licensors biggest concerns when giving the licensee the rights to use the brand, sometimes half a world away, is that the brand may become “damaged” in the eyes of consumers if the licensee places the brand on poorly developed or substandard products; or puts out marketing communications that are inconsistent with the brand’s message and positioning in other markets around the world; or when the licensee fails to provide strong customer care. Every Trademark License Agreement (TMLA) includes approval rights for the licensor so that they can work with the licensee to develop products, MARCOM materials and operational processes that will support the long-term value of the brand and the partnership.
To mitigate licensor concerns, the partners need to implement strong processes for communicating with each other, and it is the licensee that needs to drive these processes once they are defined and agreed to. As an example, in most instances, the licensor is not close enough to the local market to understand the competitive environment for the licensed products. It is the licensee who needs to define the value proposition that each product is offering to local consumers, and it is the licensee who needs drive the development of products that will meet consumer needs and compete effectively against other brands/products in the market.
Licensors will then evaluate the designs and planned functionality of the products, as well as pre-production samples of the products themselves to ensure that those products are consistent with the brand’s positioning and overall DNA in other markets around the world. For licensees to keep their product development and production calendars on schedule, they need to be proactive in managing those calendars on behalf of the partnership. Thereby, working to identify potential problems that could cause unnecessary delays early so that the business can run as smoothly as possible.
Licensing partnerships are not always easy, but by making an investment in a well-qualified, dedicated team to manage the program, and focusing on effective cooperation and communication with their partner licensors, licensees will find themselves well positioned for success.
George Williams, Managing Director of Licensing Asia
George is a pioneer in bringing brand licensing into Asia. He has represented major international brands in the negotiation and management of strategic alliances for over 20 years. He has a wealth of experience in the inner workings of China’s distribution, marketing and retail industries. George has an MBA from the University of Chicago and a BS in Economics from Colorado College.
Learn more about how LMCA can help expand your brand into China here: LMCA Asia Solutions
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