1 Franchising & Licensing Opportunities Pansy Yau Deputy Director of Research 4 December 2014 Business Opportunities for SMEs in Hong Kong
Where is the Cheese? 2
Paradigm Shift in the Global Value Chain 3 Source: Actrium Solutions’ estimates from International Franchise Association, World Franchise Council, European Franchise Federation, Asia-Pacific Franchise Confederation, trade interviews and industry sources (US$ billion) CAGR ( ) CAGR ( ) US2,0492,3772,7563.0% EU %3.2% Australia and New Zealand %4.0% China %20% Other Asia %15% Rest of the World %15% Total3,0323,7945,2635.0%7.0% Franchising Revenue by Region
International Franchisors Have Their Eyes on the Growing Asian Market 4 Note: Multiple selections allowed Source: HKTDC survey Targeted Markets for the Next Three Years (Franchisors)
Opportunities for Hong Kong Companies – Act as Master Franchisees or Area Developers 5 Note: Scale of 1-6; 1 denotes very unlikely and 6 denotes very likely. The percentages may not add up to 100 due to rounding. Source: HKTDC survey Possibility of Appointing a Master Franchisee / Area Developer in Hong Kong (Franchisors) Appointed a Master Franchisee / Area Developer in Hong Kong (Franchisors) Source: HKTDC survey
Hong Kong as a Two-way Springboard 6 Hong Kong can be a Springboard for Franchise Businesses Entering into the Following Markets (Franchisors and Franchisees) Note: Multiple selections allowed Source: HKTDC survey
7 Major Potential Sectors
8 Who Will Get the Cheese? Criteria of Selecting Franchisees (Franchisors) Note: Scale of 1-6; 1 denotes the least important; 6 denotes the most important Source: HKTDC survey
9 An Alternative Option -- Licensing
10 Positive Views on Asia’s Licensing Business
11 Licensing Activities on the Chinese Mainland by Company Origin
12 Types of Properties Handled by Licensors and Agents on the Mainland
13 The Cheese of King Bee Toys Diversified from OEM to domestic sales 3 years ago “Piggyback” on the established brand awareness of top tier property licensors and their marketing support Produce and distribute secondary category licensed products throughout China. Business has trebled in size To get a license contract, it necessary to convince the licensor: – your distribution capacity in China – your products need to demonstrate a degree of differentiation in terms of innovation or concept, yet should be in line with the overall brand values of the license – your ability in exercising high levels of quality control in manufacturing and managing the supply chain
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