Experts from the European franchising industry think that Macau has a great advantage and offers many opportunities for businesses. However, the city needs a global vision and more experience, as well as services for both businesses and individuals.The specialists participated in a seminar included in the program of the Macao Franchise Expo (MFE), which concluded yesterday at The Venetian.
Fabrizio Fiori, legal counsel of Assofranchising (The Italian Association of Franchising), suggested that Macau should seek opportunities beyond the bigger European countries.
“What [Macau] is a bit lacking [in] is a more global vision. I think that the local institute for economic development is making a great work on this direction. But what is really needed is to look at other parts of Europe and the world and to have a global vision in Europe. This is because I think that there are plenty of companies from other parts of Europe that could come here or be interested in [doing so].”
He also said that some European countries, such as Poland, have growing economies. Enterprises in other European countries that have developed very strong economies, including Belgium and Germany, are likely to be interested in coming to Macau as well.
Moreover, Fiori claimed that Macau needs more experience rather than the know-how. “I don’t think there is a big need of know-how [but] a need of experience… I have met a lot of very bright and young professionals who have studied abroad and have a very open-minded approach. What is needed is experience… not all avenues are explored here.”
In terms of the advantages of Macau, Fabrizio Fiori said that Macau has a similar legal and tax system to continental Europe, which makes it easier for European enterprises to start businesses here.
He also believes that the city is a good testing site for products due to the number of visitors. “One of the key elements here is the number of tourists coming [to the city]. This is a perfect place to test a brand or a product to see if there is a possibility to export the product.” He added that businesses and franchises can create a behavioral map of China by operating in Macau.
Furthermore, Mr Fiori argues that Macau is one of the least bureaucratic places in the world, which is beneficial for businesses. But the government has to learn how to receive businesses from other parts of Europe. “The population [in Macau] is very friendly. The administration is very cooperative… Maybe they need a little bit more experience because they don’t have much chance to deal with companies coming from different parts of Europe. They probably have a lot of experience with Portuguese companies. But there are more in Europe.”
Meanwhile, the vice president of Portuguese Franchise Association and the Co-founder of Onebiz Group, António Godinho, suggested that for enterprises wanting to expand into the Asian and European markets, Macau is a good testing place because of its size and development.
However, he commented that Macau needs services for residents. For example, Mr Godinho has mentioned an education brand operated by Onebiz that focuses on young children. He noted that Macau needs “more kindergartens and small schools for small children.” He stated that services in health, and in aesthetics and beauty, are also lacking.
As for small and medium-sized enterprises (SMEs), he believes that they are not “well serviced in the city” because there are not many relevant services provided to them.
When asked what types of business Europe will welcome from Asia, Mr Godinho said that information technology is one of them. He believes that Asia can contribute a lot to Europe and the world when it comes to IT, such as bringing the concept of the Alibaba Group to non-Asian markets.
Fabrizio Fiori told the Times that if Chinese or Asian franchises want to expand their business to Europe, they will have to pay attention to the differences in the franchising laws of different countries. For instance, some countries only see the local partners of a franchise as its distributors. As a result, there may be a chance that the franchise will have to bear the indemnity of its partners.
In addition, he advised franchises not to rush into a market. Instead, it is more beneficial to first open a test shop. This allows franchises to discover potential problems and come up with solutions for their future local partners.
Both experts were commenting on the sidelines of the Forum on Chain and Franchise Business Opportunities of International Brands of the MFE 2014.
MFE registers nearly 14,000 visitors
In its sixth year, MFE has attracted nearly 14,000 visitors, according to the organizers. A total of 167 exhibitors from 14 countries and regions participated in the three-day event. A total of 1,304 networking opportunities were arranged by the organizer. Fourteen exchange sessions took place, which were joined by 115 organizations. Six projects reached agreements on site, including franchises from the dining industry, branded product stores, cooperation between governments, and so on. The next MFE will be held in July 2015.
São Paulo wants to expand franchise into mainland
As the world’s eyes are fixed on Brazil, host of the current FIFA World Cup finals, the 2014 MFE has organized a football demonstration with young players from the football school in Macau of São Paulo F.C. It gave them a chance to show off their skills. The school was established in April, and is a franchise project involving local investors and the Brazilian club. Part of the negotiations on the partnership took place during last year’s MFE, with the deal highlighting the event’s role as a business platform for Macau and Brazil, the biggest of the Portuguese-speaking countries.