(Yicai Global) Jan. 10 -- China is signing more and more licensing deals to import and export cultural products as it ramps up efforts to bolster the sector.
The country's intellectual property market is very different to how it was 20 years ago, and needs to constantly adapt to new changes, representatives from several agencies told Yicai Global at the 16th Hong Kong International Licensing Show on Jan. 8.
"Mainland China's IP sector is only two-thirds the size of Japan's," Charles Riotto, chairman of the International Licensing Industry Merchandisers' Association, said during the concurrent Asian Licensing Conference. "But by 2020, Hong Kong and the mainland will combine to become the largest licensing market in Asia."
Famous buyers at this year's show, including e-commerce titan JD.Com Inc., smartphone maker Xiaomi Inc. and Malaysian conglomerate Sunway Group, told exhibitors their requirements, it was a good marketing opportunity for licensors, Tony Leung, assistant director of the Hong Kong Trade Development Council, told Yicai Global. As an organizer for the event, the council's job is to promote the signing of more intellectual property licenses, he said.
The mainland market cannot be ignored and is driving changes up and down the industrial chain, said Jennifer Huang, a licensing manager at Click Licensing Asia Inc., which licenses more than 10 IPs.
"In the past, we only talked about licensing," Huang added. "But now it's about entertainment and pan-entertainment. All these changes have taken place alongside the growth of the mainland market -- other nations are watching the changes here and adopting similar business models at home."
International brands are entering China through licensing and China is sending its IPs abroad too, said Zhong Wenke, of Guangzhou-based Yi Animation Inc. "[Our company has] taken part in major film festivals -- Cannes, Berlin and Tokyo -- and we're known by many foreigners. Amazon Video has even played some episodes from our shows."
Zhong is responsible for overseas promotion of Yi Animation's flagship series, an animation called Kong Food. A native Chinese team created the cartoon, which combines two of China's renowned cultural aspects, Kung Fu and food. The show has broadcast more than 160 episodes spanning three seasons to date and has a big-screen version in the works.
"It takes time to succeed," Zhong said while showing a mainland China trailer for the upcoming movie. "Old shows, like Peppa Pig and Pokemon, have undergone 10 years of changes, but there are new products gaining recognition quickly and rising to the top of the market."
Entertainment and cartoon brand licensing led the industry last year with retail sales worth USD118 billion, making up 45 percent of the global market and almost doubling business trademarks, which came in second place, according to the 2017 Global Licensing Market Survey released by the International Licensing Industry Merchandisers' Association.
"Licensing is a very special industry," added Li Jiaming, a licensing manager tasked with offline marketing for the B.Duck brand. "A product that normally sells at CNY500 (USD77) could sell for as much as CNY700 with the B.Duck logo. Consumers rush to buy them."
B.Duck is a cartoon image which originated in Hong Kong and was designed by Semk Products Ltd. It has emblazoned thousands of products since its inception in 2005.
Garfield, Spongebob, Angry Birds and other well-known animated characters were on display alongside B.Duck at the international licensing show.