(Yicai Global) July 31 -- The scale of the global licensing industry has reached hundreds of billions of US dollars, and China's licensing industry is also thriving.

Global retail sales of licensed merchandise rose 3.3 percent annually to USD272 billion, the 2018 Global Licensing Industry Survey report by the Licensing Industry Merchandisers' Association (LIMA) shows.

China's licensing market has the potential to become one of the top five largest markets in the world, LIMA chairman Maura Regan told Yicai Global at a recent forum of the global Licensing Expo held in Shanghai July 25 to 27.

Licensing means granting the use of a copyrighted work to another to create peripheral and derivative works based on it.

China's licensing market is growing rapidly with annual growth above 10 percent, but its share in the global licensing market, which nears USD30 billion in scale, is still minute. China's licensing scale was about USD9 billion last year, or only 3 percent of the global total.

The Walt Disney Company has, however, inspired many Chinese entertainment licensing companies. The world's largest licensor, Disney's robust licensing capability relies not only on the toil of its business team but also on its content production squad's ability to create licensable intellectual property.

Disney's re-launch of Star Wars: The Force Awakens in 2015 caused the Star Wars series to achieve unprecedented success. The series ranked first in the global toy IP rankings for three consecutive years, driving fans around the world to buy derivative products, data from market researcher NPD Group show. A derivative game, titled Star Wars: Battle Front II, became the second best-selling video game in November and December last year.

 "Boonie Bears has led to the creation of more than 100 derivative products, covering all aspects of life," Li Xiaohong, vice general manager of Fantawild Animation, developer of the popular animation series Boonie Bears, told Yicai Global.

Boonie Bears is a well-known Chinese IP product, and its sales of licensed merchandise last year topped CNY2.5 billion (USD368 million).

Preparatory work for licensing is just as important as IP content. "The creation of a good licensed IP product requires a well-round operating system as well as forward-looking operations that take the whole situation into account," Li said.

Of course, whether the design of licensed products can be accepted by viewers is also very important. "A good licensed product needs to have not only good IP, but also elaborate design to the liking of users," was the candid assessment of Wang Biao, chief executive of Beijing Block 12, a startup specializing in creating digital-age intellectual property in the form of comic characters, emojis and the like.

Editor: Ben Armour