International brands target Hong Kong as the regional franchising hub

Hong Kong International Franchising Show set to attract global brands and franchise owners at home and abroad

International brands are identifying Hong Kong as the prime location to set up their franchise network in order to tap into the mainland China market, recent studies have found. According to the latest study by the Hong Kong Trade Development Council (HKTDC), which surveyed 70 international franchisors and 80 Hong Kong and mainland franchise owners, 87 per cent of the international franchisors questioned set their eyes on the vast mainland China market. Hong Kong is being seen as the best springboard entering into the mainland China market – 90 per cent of the respondents said Hong Kong can be the springboard to enter the mainland market.

The respondents also see that Hong Kong can be a springboard to Taiwan, North America, Europe, and the ASEAN region. The city’s strategic importance as a regional franchising hub is further recognised as 29 per cent of the respondents have set up a regional office in Hong Kong. For those who have not, 89 per cent said they are likely to set up one in Hong Kong when expanding into Asian markets via franchising. Coinciding with the rapid increase in wealth creation and middle class population growth in mainland China and rest of Asia, the Asian region is expected to post double-digit growth in franchising business between 2014-2019, by which its number of franchise brands will outstrip the total of franchise brands combined in the US, European Union (EU), Australia and New Zealand.

In light of the huge space for growth due to the tremendous demand on high-quality foreign brands in Asia and China, HKTDC, a world-class trade event organiser which has organised some of the biggest trade shows in the world, will stage the inaugural franchising show, “Hong Kong International Franchising Show” in December this year. It will be organised side by side with the World SME Expo, which drew over 60 franchisors and close to 10,000 visitors last year. The show will serve as a marketplace to help franchisors and franchise owners from around the world to expand into the regions. It will also focus on how Hong Kong can be a strategic partner in helping international brands jumping the many hurdles in the volatile business environment of the mainland China and rest of the Asia.

According to the HKTDC survey, the biggest challenge faced by international franchisors in Asia is finding qualified franchise owners, as it was highlighted by 74 per cent of the respondents. The other major challenges include franchise owner management, license application procedure, foreign exchange control, localisation of brand and products, and intellectual property/patent registration and protection.

Hong Kong, in many ways, provides the perfect solutions to these issues. First, it is an ideal testing ground or showcase for new business concepts or products. Hong Kong has long been the world city where East meets West, with tens of millions of mainland tourists visit Hong Kong every year to shop and to experience the cosmopolitan lifestyle the city offers. This enables Hong Kong to provide insight into the sentiments of mainland customers.

On professional services, Hong Kong has the unique advantage of being able to provide international standard services, as well as experience in business dealings in mainland China. Its service providers are readily available to meet the various needs of international franchisors. It also provides a large talent pool in terms of capable, trustworthy trading companies and brand managers: some 31 per cent of international franchisors polled have appointed a master franchise owner or an area developer in Hong Kong, and most of those who have yet to make such an appointment will likely do so in the coming year.

Those enthusiastic local and international franchising professionals, including franchisors, master franchise owners, brand agents, prospective franchise owners and investors would have the chance to meet face to face at the Hong Kong International Franchising Show. The highlighted sectors are: food and beverage, personal services, education, business consultancy, retail, catering supplies, as well as health and beauty. It will also offer a range of practical seminars on franchising opportunities and latest market trends, as well as business matching and networking events to encourage business collaborations.

The three-day Franchising Summit will feature in-depth seminars presented by experts and industry leaders on the franchising opportunities and global industry trends in Hong Kong, Singapore, Taiwan, Japan, the US and ASEAN. There will also be China-focused seminars on the importance of intellectual property and franchising-related regulations in China, where different experts will be sharing their secret to success in China and important market information with those who are looking to expand their business into China. Hong Kong International Franchising Show will take place on December 3 to 5 2015 at the Hong Kong Convention and Exhibition Centre, Hong Kong. Exhibitors and buyers from all around world are welcome, simply go to www.hktdc.com/hkifs-en and click “apply booth” or “visitor registration”.