China Made: From Processing to Licensing

By LIU QIONG

Worth their weight: gold and silver mementos of Expo icons and Chinese calligraphy are available for purchases in Beijing too! Photos by China Foto Press

The world’s best known mouse is the one created by Walt Disney. Today this iconic cartoon rodent is seen all over the world in all forms and materials. Manufacturers worldwide vie to produce “Mickey,” safe in the knowledge that joining Disney’s legion of licensed suppliers means a steady flow of business and an assured profit stream.

Similarly, brand-licensing opportunities to produce Shanghai World Expo souvenirs have been chased by hundreds of manufacturers. JuneYao and Sinnsa, both Shanghai-based companies, outbid their rivals to win senior sponsorship for the Shanghai World Expo in exchange for brand-licensing contracts. The two now lead a cohort of 350 licensed manufacturers and hundreds of franchise retailers.

As the six-month-long event approaches its end, the cohort members are tallying their takes. The results vary widely: according to He Wei, marketing manager of the JuneYao Group, one third of licensed manufacturers of Expo merchandise report sweet returns, one third can balance the books, and the rest are in the red.

Some Boom, Some Bust

“Those figures sound about right,” says Huang Ming, a manager with Beijing Fanrong Culture Development Co., Ltd. The company designs, produces and sells souvenirs, primarily in precious metals, for international events such as the Shanghai World Expo and the Beijing Olympic Games. It began selling Beijing-Olympic-themed goods way back in 2001, and by 2005 its sales were topping RMB 2 billion. “Fanrong was a latecomer (April, 2009) to the World Expo, but has made Expo-merchandise sales of RMB 30 million per month,” Huang reveals. “Licensed Expo products represent a big cake, but getting a slice of it calls for experience and ability.”

Huang estimates that poor stock management and product development could be the major reasons for the poor performance of licensed producers and dealers that have lost money at Shanghai. He Wei agrees. Unlike garments and cartoon figures, products associated with expositions and sporting events have a finite life span, a fact that dictates a different stocking policy. JuneYao learnt this lesson the hard way.