The “Forum on Chain and Franchise Business Opportunities of International Brands” was held this afternoon at the fourth floor of Macau Tower Convention and Entertainment Centre. The keynote speakers discussed about the prospects of international franchising business and exchanged views on future development of the industry. The participants indicated that the Forum helps to give a better understanding of the current trends and markets for corporate franchising in various countries and regions. The Forum also helped enterprises and other organisations build up business relationships.
The Forum on Chain and Franchise Business Opportunities of International Brands, with the theme of “Young Entrepreneurship – In Search of Franchising Opportunities”, is one of the series activities of Macao Franchise Expo 2014 (2014MFE). The opening ceremony of the Forum was held at 3pm on 3 July.
Executive Director of Macau Trade and Investment Promotion Institute (IPIM) Echo Chan said that Macao’s brand development and franchise operations have become increasingly active, with many young entrepreneurs as well as Small and Medium-Sized Enterprises (SMEs) joining the franchising business. To be in line with the market development, the theme for this year’s Forum is “Young Entrepreneurship – In Search of Franchising Opportunities”, with the objectives of providing more business opportunities to young entrepreneurs and local brand enterprises through the co-operation in chain and franchising operation.
Director of the Franchise Committee Office of the Franchise & Entrepreneur Department, China Chain Store & Franchise Association Susan Su said that the association has been co-operating with the Macao SAR Government since the first MFE. The association is pleased to see that the chain and franchising business has been developing quickly and expanding in Macao and has been widely applied in various industries. E-commerce is developing fast in Mainland China in the past two years and has great impact on the with particular reference to the actual stores. However, the e-commerce development also brings in opportunities, allowing for franchisors to expand their network. Franchising has experienced steady growth on Mainland China, especially in the 3rd and 4th tier cities. The franchising business in Macao has more international exposure than those on Mainland China. Therefore, as long as Macao makes use of its advantages, it will have a chance to develop its own franchising brands, and at the same time expand businesses to other countries and regions through e-commerce.
Speakers at the Forum included: Vice President of Portuguese Franchise Association, Co-founder and Managing Director of Onebiz Group António Godinho; Secretary General of ASEAN Retail-Chains & Franchise Federation (ARFF) Chris Daniel Wong; Legal Counsel of the Italian Franchising Association Fabrizio Fiori; President of Macau Cultural and Creative Industries Development Association, Chief Executive Officer of 678 Cultural Creative Park Ltd Andy Szeto; Director of Administration of Long Profit International Co. Ltd Cheang Chi Hou; Committee Member of Franchising and Licensing Association (Singapore), Chief Executive Officer of Asiawide Franchise Consultants Pte. Ltd Albert Kong; Chairman of Franchise Committee in Japan Small and Medium Enterprise Management Consultants Association - Tokyo branch Kyo Ito; Supervisory Council Vice Chairman of Macau Youth Entrepreneur Association, Chief Executive Officer of Azona Enterprises Ltd Dicgo Chan; Deputy General Manager of Operation Headquarters of YuLoong Wu Wen Na; Hong Kong branding designer and consultant Tommy Li; Director and Project Manager of Meet & Sweet Café Ieong Chon Hei.
Two panel discussion sessions were also organised for the Forum. The moderators and panellists led a dialogue focusing on market development and operation strategies and shared their experiences in finding marketing opportunities in chain operations and business start-ups.
The panellists introduced the franchising market in various countries and regions and discussed the challenges to be faced when joining a franchise. The panellists also pointed out that brands may need to pay extra attention in assisting the franchisees, so as to ensure the quality of their brands. At the same time, the franchisees should also be aware whether the franchisor can provide necessary assistance and support. Moreover, it was pointed out that if brands is growing too fast, it may lead to management problems and insufficient backup support which will threaten the operation of the brand.
The panellists also shared their experience in franchise development. They agreed that the SAR Government has provided plenty of positive support to SMEs, and also helps in terms of policymaking and policy execution. Macao is a city with free economic trading. Most imported products are exempted from taxes, with fast and convenient customs clearance procedures and efficient logistics facilities, all of which help lower business operation costs. Macao has a diverse source of customers. The number of visitors in Macao has been increasing annually, which accelerates corporate development, especially for the beverage industry, which depends greatly on visitors.
A panellist said that the advantage of the franchise system is that the brand’s head office can provide technological and operation backup support which will relieve the pressure of business starters with no prior experience. The head office also takes charge of the research and development for new products, saving the franchisees’ time and money. The brands themselves have already built up their reputation and that provides confidence to customers. Operation procedures and policies are required for all companies. However, the brand’s head office will train and send staff to ensure the standard of workflow is met and helps franchisees to build up their management model more quickly. Franchisees can also enjoy the advantage of facilities set up as well as business strategies provided by the head office.
When it comes to the co-operation between young entrepreneurs and Portuguese corporations, a panellist suggested that Macao can be the bridge between Mainland China and Portugal as well the Portuguese-speaking countries. Being proficient in Portuguese is essential when bringing products from these countries into China. Since some companies and organisations are not familiar with Macao, it will be beneficial for them to co-operate with Macao SMEs. It will also help build up better communication with Portuguese speaking countries.
Some panellists also pointed out that the Macao corporations can learn from the successful experience of international companies when introducing international brands. It helps improve Macao corporate operations and build up Macao brands. Macao's proximity to Mainland China gives enterprises the advantage in expanding into the Mainland market. Macao corporations also have support from the SAR Government as well as various business chambers. It all adds up to great potential as long as they can improve their own business practices.
A panellist also pointed out that not every brand can develop a franchise system. Franchisors need to establish systems, including those for manufacturing and start-ups, in order to maintain consistent standards. At the same time, brand owners need to calculate whether they have enough financial support. Healthy financial aid from banks or securities companies is essential.
Regarding the questions raised by the participants on how to bring Macao brands into Mainland China, the panellists believed that SAR government support is necessary. As there is a surplus supply of shopping malls in the Mainland, resulting in difficulties in promoting investment. Therefore, preferential policies are provided to attract more franchising operation. If the plan was to set up a shopping centre promoting Macao products, IPIM is a proper channel to help bring in Macao companies and products. Various chambers in Macao can also set up cooperation with mainland corporations.
For local enterprises that wish to expand their franchise stores on the Mainland, a panellist shared his experience that while increasing the number of stores, the brand also need to gradually establish management process . They may need to establish their own management team before considering expansion into the chain and franchise business. The panellist also pointed out that existing brands that represent Macao should be maintained, and even be transformed if they have become outdated.
Other events at the Forum included a coffee tasting session, introduction of corporate products and items, and a networking cocktail reception. The purpose was to allow people to meet in order to provide business opportunities, relevant assistance to business starters, and methods on how to help existing business upgrade their operations. The audience indicated that the Forum had provided plenty of useful market information, helping them easily grasp the trend of markets in various countries and regions. Overall speaking, the Forum provided a better understanding of franchising and thus a platform of better communication and co-operation. Participants also pointed out that the Forum helped them to focus on issues that require attention when building up franchises. That allows them to plan more effectively for expanding their own business into the franchise sector.
Participants also said that the Forum enabled them to know more about the attending companies and that attendance at the remaining three days of 2014 MFE will help them to improve cooperation and build relationships.
Starting from 4 July, 2014MFE will take place at Exhibition Hall “A” of the Venetian Macao-Resort-Hotel for three consecutive days. The opening ceremony will be held at 11am on 4 July. A total of 170 exhibitors from sectors covering food and beverage, retailing, education, entertainment, finance, brand agencies, plus real estate and professional consultancy services, will display their products and services. The final two days of 2014MFE will be open to the public. Macao residents are welcomed to attend and explore business opportunities.
