The significance of brand equity can hardly be underestimated. Research have shown that consumer perceptions and attitudes - measured collectively, and commonly described as consumer Brand Equity - have a direct relationship to a brand's market position and business results.

 Unfortunately, while many brands enjoy strong consumer brand equity in the United States, they tend to have very low brand awareness in Chinese markets. Most Chinese consumers are either not familiar with these brands or never heard about these American brands at all.

The good news is that in many emerging industries in China, there is the lack of a dominant mega brand. The market is characterized by the presence of large number of small players and there are no clear visible market leaders with strong brand recognition nationwide. For instance, the rapidly-growing MP3 players market in China is crowded with more than 400 brands, mostly local ones with most of them capturing less than 1% of market share.

Recognizing the opportunity, some American companies are already using corporate brand licensing to enhance their brand equity in China. Not only are they able to increase the number of brand impressions made to local consumers by the guaranteed advertising expenses by licensees, they are also able to provide a favorable brand experience to Chinese consumers through a portfolio of carefully-selected premium products. Licensing fees and recurrent royalty incomes are additional bonuses.

According to The Licensing Letter, licensed products generated retail sales of $71.4 billion in the U.S. and Canada in 2003. These figures serve as testament to the US dominance in brand licensing arena. In contrast, the emerging markets in China only recorded $800 millions or 0.9% of world’s total sales of licensing products. However, the China market is the fastest growing market with 16% annual growth rate and it is expected to grow faster in the years to come. Eivio believes that the under-tapped opportunity in China are now being addressed by many US companies such as Disney who moved their Asian licensing operation from Hong Kong to Shanghai Xintiandi in June 2005.

However, brand licensing in the Chinese market is tricky. You may have a thoroughly tested brand extension licensing strategy and approach for your home market. You know clearly your objectives and your capability, but there is no guarantee that any of these battle-proven practices will work in China. Furthermore, successful international licensing programs need to be mindful of, and plan for, local consumer tastes and local retail environments. Last but not the least, working with local licensees poses new and different challenges and you need to tailor your licensing program and with the local expertise to succeed.

Based in Singapore and China, Eivio is run by an international team who bring in their licensing, marketing, legal, market research and technical expertise. Eivio is in a good position to assist you to establish corporate brand licensing business in China.

The right holder of a trademark has the right to deal with his/her intangible property in accordance with legal procedures. Trademark holders can dispose trademark right either by assignment or by licensing. Trademark assignment is the transfer of trademark ownership to another party voluntarily by the right holder, either paid or unpaid. And a trademark transfer caused by merger, annex or judgment by a court can also be viewed as trademark assignment. In that case, the assignee should handle assignment with the Trademark Office. After approval, an assigned trademark can be publicized on the Trademark Gazette. The assignee enjoys the exclusive right to use the trademark since the date of publication. The trademark licensing of registered trademarks is to allow others to use the trademarks without assigning the ownership. To license a registered trademark, the licensor shall sign a trademark license contract with the licensee. And the licensor shall report the contract to the Trademark Office to make a record of the contract within 3 months counting from the date on which the contract was signed.

Benefits of Brand Licensing in China

·Brand licensing unlocks great potential for companies to achieve 12international expansion.
·Brand licensing increases the number of brand impressions made in 12international markets
·Brand licensing generates guaranteed advertising spending in China by 12licensees
·Brand licensing strengthens brand equity in emerging markets in China
·Brand licensing allows licensors to quickly penetrate new markets
·Brand licensing creates new business that augment core businesses
·Brand licensing brings in income through royalties with high profit margin

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