As the largest and, in my opinion, most exciting developing economy in the world, China is naturally an attractive market for U.S. businesses looking to expand overseas. However, one of the barriers to entry can be working out how to maximize the potential of your organization’s intellectual property (IP) there, while ensuring that it’s protected.
China has made huge progress over the last decade combatting IP infringement; however, it’s fair to say the country still has a dubious reputation in this area — owing to IP thefts involving everything from corporate brands and fashion icons to Hollywood IP.
That said, the situation is improving all the time, and huge opportunities remain for international businesses entering the market — provided they have the inside scoop on the best way to manage and maximize their intellectual property in China.
From our experience managing the IP and licensing in China for some of the world’s leading cultural institutions (including the Museum of Fine Arts, Boston, and the British Museum in London) we’ve put together these five key steps on how to get the most out of your IP when you bring your brand to China:
1. Protect your IP.
Securing the correct IP protection in China can be a complicated business when you come at it from the outside. When our company starts working with overseas partners, we commonly discover that they lack the adequate protection to securely grow their enterprise in China.
Often, one of the first things we then do is assist them in getting the right trademark registrations and copyright filings. The important thing to remember here is that, despite the country’s reputation, there are a growing number of Chinese partners to help international companies get everything in place as seamlessly as possible.
Tip: Do your research and find the most appropriate IP partners for your brand. We work closely, for instance, with Jingtian & Gongcheng, Chinese specialists in art and cultural IP; and Sino-Faith IP Service Group, which has developed proprietary IP surveillance software.
2. Develop meaningful IP assets.
China is becoming a more and more sophisticated market and consumers there are increasingly looking for something original and different in the products they buy. With this in mind, once you’ve secured the correct IP registration, it’s not enough to simply put your logo and IP elements onto a product and take it straight to market. Instead, you need to focus on creating a suite of assets to maximize the potential of your IP.
We closely monitor global fashion trends to select themes we feel will resonate with consumers here, and we use these to underpin the IP assets we develop for our clients. For example, over recent seasons, we observed that various luxury brands, including Givenchy and Balenciaga, showcased collections inspired by ancient Egypt. With this trend in mind, we introduced “Egyptian Civilization” as one of our IP themes for 2019 and picked the Gayer-Anderson Cat, one of the best-known objects in the British Museum, to create a collection of customized prints and patterns.
These prints and patterns were then developed for Amazon China for its Kindle ebook cover and packaging design.
Tip: Using inspiration from broader fashion and lifestyle trends and taking a creative approach to developing your brand’s IP helps to ensure success in the Chinese market.
3. Create a narrative around your IP.
In line with this growing sophisticated market, Chinese consumers increasingly expect experiences and narratives in the retail environment. This is particularly important when our retailer partners introduce a licensed product to the market. Providing engaging information and creating a story about the product on packaging and marketing materials is crucial.
This kind of storytelling should be extended to retail environments, too. We recently opened the British Museum’s first experience-led store in a shopping mall in Shanghai, giving consumers there a taste of the museum environment as they shop.
We also developed a live video-streaming campaign in partnership with the Alibaba Group last year that saw Chinese presenters in the British Museum showcase key products, such as the Rosetta Stone collection, next to the exhibits that inspired them. This move attracted 19 million consumers over five days.
Tip: It’s all about shaping a relevant and engaging narrative unique to your brand’s IP.
4. Build relationships with retailers.
Getting to know and understand all the different retail channels, and how they’re developing, is critical. The ecommerce giants Alibaba and JD.com are the big players to aim for, as well as Amazon, but platforms like WeChat are also growing their reach. By offering tangible value to your retailer partners, you can gain repeat business from them.
Building strong relationships can be especially crucial when it comes to protecting your IP, as those retailers have the power to shut down copycat products and companies when they pop up on their sites. New legislation slated to be introduced in January 2019 will increase the pressure on these retailers to regulate the selling of counterfeit products, making it even more important for companies to forge those strong retailer relationships.
Tip: Build relationships with the Alibaba Group and JD.com, to create hundreds of genuine products for your partners to sell on their platforms. Work closely with your retail partners to spot fraudulent use of IP when it arises on their site.
5. Spot opportunities for commercial partnerships.
Getting the right protection in place, taking the time to build relationships with retailers and developing relevant assets and experiences around your IP can significantly enhance its appeal to third party companies.
This can prove quite lucrative and influential in China. For example, Chinese company MI, the world’s fourth largest smartphone brand, is an active sponsor of art exhibitions in China. In March 2018, MI wanted to develop a special edition smartphone to celebrate the convergence of art and technology and asked us for IP assets related to the theme of the Italian Renaissance.
We provided IP assets developed from a 16th century Italian Maiolica pottery plate, which is part of the permanent collection of the British Museum. Those assets included an animated user interface and customized icons, all inspired by a beautiful tin-glazed plate. The special edition product sold out in 24 hours and a popular phone in China in May 2018.
Tip: Lay the foundations suggested above and invest the time to spot the right opportunities for commercial partnerships. Those actions can pay off for your brand both from both a commercial and reputational perspective.
In summary, while China’s reputation with IP rights has a chequered past, it shouldn’t deter ambitious businesses from taking steps to enter the market — providing they do their research, get support in place on the ground and understand the culture of how Chinese consumerism is changing.