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Licensing Expo China Expands to the Middle Kingdom

Industry-leading exhibition group launches brand new show next week in Shanghai, helping licensors find licensees across rapidly expanding Chinese consumer markets.

Finding distribution, retail and licensing partners in the often difficult to navigate Chinese business world should be a bit easier come next week with the inaugural edition of Licensing Expo China, set to launch at Shanghai’s National Exhibition Convention Center July 18-20.

The latest show from the organizers of Licensing Expo Las Vegas and Brand Licensing Europe, Licensing Expo China will debut with 250 brands and licensing properties not just from the world of animation and comics, but with art and culture, games, entertainment and lifestyle brands as well.

In addition to the exhibition, other onsite activities are slated to bring professionals together. Licensors, licensees, retailers and distributors coming to the show can participate in tailor-made business matching and networking sessions. Attendees can also take advantage of several licensing seminars and summits, including the Character and Properties Parade. The inaugural China Licensing Awards will also be held to recognize outstanding brands and licensing properties.

Licensing Expo China 2017 is co-located with CBME China 2017, the world’s largest baby product tradeshow with over 4,000 brands and over 88,000 expected visitors covering retailers, distributors, supermarkets, hypermarkets, department stores, and e-commerce representatives. This strategic co-location of the Licensing Expo should provide the new show a significant footprint, generating more traffic and offering the opportunity to engage new potential licensees from CBME China’s attendees in the apparel, food, nutrition, beverage and snacks industries.   

As China’s expanding middle-class shows its growing financial clout through an increasing demand for all manner of consumer goods and services, domestically produced products based on licensed animated properties continue to be the most popular, and include consumer tie-ups with popular fast-food chains, convenience stores and even clothing and accessories. In 2000, only 4 percent of the total population of China was considered middle class -- as of 2015, the middle-class population is the now the largest in the world, even larger than the United States. Industry forecasts predict that Chinese consumption will grow to over $2.3 trillion by 2020.

While the total annual retail sales of licensed products in China, including Hong Kong, recently reached $7.6 billion, that accounted for only 3 percent of the global market. The licensing market in China remains hugely untapped – many brands, manufacturers and companies don’t know how to embrace it. As the market gets educated, and other Asian and Western companies find the right partners, it’s likely more and more companies will make the move to expand into China.

In the short-term, it’s expected that animation property licensors will see the highest revenue and market share increase, as these brands benefit from consumer awareness through exposure to feature film and television/IPTV entertainment content. In the long term, a broader array of companies and brand categories are expected to enter Chinese markets, especially as the country slowly expands consumer access to Western culture, media and commercial brand messaging. Chinese consumers are already being exposed to more international licensing properties than ever before, and as more and more licensing deals take place, Chinese consumers will have more branded product options when they shop at the local mall or online.

In addition, there has been significant growth in international licensing of Chinese IP.  Recent investment in entertainment properties, such as the successful Monkey King: Hero is Back and Ali the Fox, have fueled growing participation from Chinese companies at numerous international markets, such as MIPCOM and Annecy’s MIFA, in addition to key Licensing shows in Las Vegas and Europe.

After launching in 2006, Ali started as an Internet emoticon on social media in China, including WeChat, QQ, Sina Weibo, Renren. To-date, Ali’s emoticon has been downloaded on WeChat more than 2 billion times. In 2012, Ali was awarded “Best Young Property in Asia” at the Asia Licensing Awards. He was the first Chinese character to win this award, making it one of the most influential Chinese cartoon characters in recent years. The property has amassed a portfolio of thousands of licensed products, from home goods, to games, accessories, apparel and even picture books in Hong Kong and Taiwan. Ali’s popularity continues to grow internationally as it takes advantage of increasing global distribution of its animation and book products.  

Another good example is Boonie Bears, a Chinese animated cartoon series available at all hours of the day and night across both Central China Television (CCTV) and Beijing Television Network (BTV). It was first shown in 2012 and has since grown globally. Boonie Bears international popularity has increased so much that it has been translated to other languages including English, Russian, Tamil and Hindi.

Examples of other Chinese animated properties that have expanded internationally include Dragomon Hunter, Chicken Stew, Brainy Bubbly Bug Buddies and Kung Fu Masters of the Zodiac, among others. But like with all licensing opportunities, know-how, key partnerships and patience are key – property owners need to be realistic in their expectations for success in their efforts to strike licensing deals inside and outside China.

The licensing market in China is relatively young. A considerable amount of ongoing education is needed to help businesses expand -- from the basics of getting started, to the benefits of various deal structures and more. Many companies are interested in getting into the industry but don’t know how to get started. Together with partners, LIMA and Alifish, the Licensing Expo organization continues to educate the industry through various series of educational sessions aimed at any number of licensing how-tos. As part of that effort, Licensing Expo China has a number of planned seminars to help educate participants across a number of key areas of the business.  

Another key consideration for companies looking to expand into China is how they craft their overall strategies. What works in Western markets is not guaranteed to work in China and Asia. For one things, the business and purchasing models are different. China is a vast country with 34 provinces. Though it is one country, there is a huge difference between the Tier 1 and Tier 5 cities -- key players and market dynamics are different as well. For example, supply chain distributors can be the regional distributors, or provincial distributors, and each has its own effective way to reach more retailers and consumers through their networks and connections. The supply chain is much more mature and much shorter in the U.S. and Europe because they don’t have local distributors like you’ll find in China. The number of deals needed to reach across China is significantly greater than needed in the West.

With that said, Disney, Hasbro and Mattel have all tested, entered and enjoyed success in the Chinese market. Chinese consumers continue to show their love of properties such as Transformers, Marvel’s The Avengers, Thomas & Friends as well as Elsa and Anna from Disney’s Frozen. Aside from the traditional fashion, apparel and accessories licenses seen in emerging Chinese markets, the country’s famous food culture is expected to foster growth of licensing in restaurants, nutrition, and beverages, as well as pre-school education and theme parks (playground). Aside from consumer goods, other channels such as licensed restaurants like LINE FRIENDS Cafe & Store, Charlie Brown Café, Café & Meal MUJI, Hello Kitty Café, and even a Hello Kitty hotpot in Shanghai could prove successful in China.

Growth is also expected from traditionally powerful Western properties and consumer products such as Alpha, Johnson & Johnson, McDonalds, Universal Studios, Mattel, Amazon and Bright Dairy. Universal Studios will be open in Beijing sometime in 2020, and more theme parks, with their array of branded entertainment options, are expected to spring up in China.

Dan Sarto's picture

Dan Sarto is Publisher and Editor-in-Chief of Animation World Network.