China's evolving manufacturing sector impresses U.S.-founded brand licensor

 For Francois Scoliege, a France-based executive of a U.S. brand licensing company, returning to the Canton Fair in Guangzhou feels like revisiting an ever-evolving story of China's manufacturing transformation.

Scoliege works for Established Inc., a licensing company based in Houston. Every six months, he visits the China Import and Export Fair, or the Canton Fair, to meet with Chinese distributors and manufacturers and explore new licensing opportunities.

According to Scoliege, many manufacturers in China don't have a well-known brand, nor an organised commercial structure in Europe or North America, while distributors in those markets have the network, but lack good sourcing options.

"Both sides are looking for famous brands, such as Thomson and Schneider from France or RCA from America, retained by Established Inc.," said Scoliege. This gap, he added, creates potential business opportunities.

The Canton Fair has become an ideal platform for representatives like Scoliege to connect with suppliers and potential partners as the event gathers both renowned global brands and some of China's best manufacturers under one roof.

Building a brand from scratch can be costly and time-consuming, Scoliege said. However, it is vital for good products to reach the market via a noted brand, especially in markets where customers value brands that have longer histories.

"Consumers want to have insurance of the products, and the brands serve as the insurance. If they don't recognize a Chinese brand, they may say no to the product, and pay a bit more for a European or American counterpart," Scoliege revealed.

Licensing European and American brands to Chinese manufacturers is therefore a win-win approach. Chinese companies benefit from the reputation of established brands -- while brand owners receive high-quality, advanced products that further strengthen their image.

Chinese suppliers are not merely functioning as original equipment or design manufacturers, but are also learning brand management and starting to build their own reputations, Scoliege said, adding that he has witnessed a Chinese TV manufacturing company successfully develop its own brand after years of cooperation with well-known companies.

Quality stands out as a key criterion in granting licenses. Licensing companies like Established Inc. have to help control the quality of products for their customers to protect the image of such well-known brands. This requires representatives like Scoliege to meet suppliers in person, ask for samples and inspect their factories.

"I've been visiting the Canton Fair since 2001, and I've seen the quality of booths and products increasing. The same applies to the factories. The city of Guangzhou itself is also changing incredibly without doubt," said Scoliege.

Scoliege highlighted that China is leading the manufacturing process in many domains -- including domestic appliances, vacuum cleaners, TVs and electronics. "You don't even think of going outside of China to produce," he added.

Beyond the evolving manufacturing sector, China's innovative products have been catching the eyes of international buyers. The 138th Canton Fair, which opened on Oct. 15, features over 1 million new products developed in the past year, including around 800,000 newly released items. Notably, some 46 leading robotics companies showcased their most advanced products and services at the fair's service robot zone.

"More and more I see some new products at the Canton Fair that I have never seen anywhere else," Scoliege remarked, citing examples such as a luggage case featuring wheels and battery, and AI-based swimming pool cleaning robots.

Scoliege believes there is a massive market in the AI sector, which is being led by China and the United States. "There is a huge opportunity for us to get new licenses in this domain. We can source new products for some German and French brands who are interested in the AI application market," he explained.

During the years, Established Inc. and the Chinese suppliers have built close connection which he referred to as business partners. Looking ahead, Scoliege expects Established Inc. to soon open a new Shanghai office, which will further strengthen its presence in China. He said the Chinese market is a big one that the company wants to further develop.

"In China, we're generating 300 million U.S. dollars in turnover. With the Chinese suppliers, we are making another 600 million outside of China. I believe we have huge potential here," Scoliege concluded. ■