Brand licensing must be careful, both opportunities and risks

It is undeniable that brand licensing is a quick success path for SMEs, but there is no shortcut to success. At the same time, it is obviously easy to have many problems. Yang Dawei, president of UTA Fashion Management Group, analyzed the possible problems in brand licensing and answered how companies can avoid problems.


There are two main types of brand authorization: one is cross-industry authorization, such as Disney's animation authorization, marching from the animation industry to the retail industry, and the second is the authorization of Montagut inside the apparel industry. There are many phenomena in China that are authorized now, but not many are actually able to bring good benefits to enterprises.


First of all, each company's cooperation method is different. It is difficult to define whether it is good or not. Enterprises must clarify their own goals. Brand authorization is undoubtedly a good way to use short-term profits solely for the use of authorization. However, this method is limited by time, life cycle and some other aspects, which will make it difficult for brand owners to control the brand and the market.


Second, the authorized company is in danger of being terminated at any time after the brand has been made. It is very likely that the brand licensor will find another partner. In addition, the authorization also constrains the company's own development space, and the authorized party is doing a better job and is also doing the same for others.


Authorized enterprises must choose their own brand, observe the other party's overall strength, have professional team, brand promotion efforts, etc., and combine their market performance.


Question: Pierre Cardin is a representative brand that uses the brand licensing method to expand the market. Will this business model be outdated in a rapidly changing market environment?


Yang Dayi: Like Pierre Cardin and Montagut, the first generation of companies that have reached the brand's authorization, they are still on the market today. However, it can be clearly seen that these apparel brands have minimal impact on China's overall apparel industry, and there is little chance for authorized brands to become first-line brands, and they are also very few in the world. The independent brands such as ZARA, H&M, and Uniqlo have great influence on the industry.


China's second-generation brand licensing companies, such as Playboy, JEEP, and Santa Paul, can only say that they have benefited from their own brand effects.


Authorized brands all have a natural weakness. Based on the cooperation mode of brand authorization, when the brand develops to a certain scale, it will quickly enter the bottleneck period of brand development. The reason is that many investment companies have weakened brand control ability and are uncertain about the brand's future. Direction of development.


When many brands of companies license different categories of products, they will have a corresponding position when selecting customers and they will be handed over to different companies for operation. But in the process it is easy to blindly authorize, which is undoubtedly tantamount to weakening the brand's cohesion, because the ability of authorized customers is different, the brand is difficult to grasp in the market, and ultimately deviated from the original goal.


For example, Pierre Cardin was originally an excellent brand in coats and men's wear. He is a world-famous brand, but blind expansion has caused the original brand value to plummet. Therefore, whether it is an authorized party or an authorized party, we must choose carefully for future development.