As someone who is passionate about China (the southern part!) and a very hard worker, Julien Urbain has created several companies in Hong Kong and Canton. After trading, since 2012 he has specialised in marketing licensed products. Very late one evening, when no doubt his own work day was not yet quite over, Julien took the time to tell us about his professional adventure, driven by a great thirst for freedom.

lepetitjournal.com: Your career path has mostly unfolded in Guangdong, the Chinese province that touches Hong Kong. Why here and not elsewhere?

Julien Urbain: I knew this region after coming here in 1991. I finished my studies at ESC Lille (SKEMA) in 2004. I’d completed the adult training programme that one can join after gathering a few years’ experience and completing an undergraduate degree. I had two years’ experience in the US and two years in Belgium. I arrived in Canton (Guangzhou) in February 2006 as export manager for a factory that belonged to a supplier of Audio Club, the company I had been working for. I was poached. The factory made entertainment equipment (speakers, lights for stadiums, etc.). At the time, there weren’t many technology factories further north in China.
That job went atrociously wrong! (laughs) A few months after my arrival, I went to a trade fair in Beijing and when I got back to Canton I found out that the factory had been sold. I didn’t know that the factory wasn’t even registered!

After a few weeks in Europe, I returned to China. I accepted a position as director of exports for a much bigger and better organised factory, but I warned them that I wanted to quickly open my first trading company in Hong Kong.

You were looking for an idea to start your own business?

Yes. So I set up this trading company which, in the beginning, specialised in audio equipment. Rather quickly it grew considerably in terms of products, because it was a niche market. I specialised in mass-market products; I became a supplier to suppliers, more particularly of licensed products such as Hello Kitty, Disney, SpongeBob SquarePants… quite a few licenses for children in the beginning. Hong Kong is the perfect city for doing business. Companies don’t pay taxes on profits derived from exports.

Since 2009, I had been racking my brain to find a business to run directly in China and do less and less export. As the Chinese were developing more and more, I searched for an opportunity. In 2012, I ended up creating another company in Hong Kong, License2Dream, and I bought my first licenses for the Chinese market (SpongeBob SquarePants and Dora the Explorer). In 2013 I set up my Chinese company, in Canton. You can’t sell on the Chinese market without having a Chinese company; otherwise it’s considered importing (even if the products are manufactured in China, as long as you invoice abroad it’s considered importing and import taxes are particularly high in China).

So you developed an industrial production?

To begin with, I bought from Chinese factories and it involved some design and research work. I was drawing the products and having them approved by my licensor (this is still the case). I was having them made in Guangdong and selling them in the China/Hong Kong/Macau zone. I didn’t have any factory activity.

In 2012, I became one of the suppliers of the French group FDG, which creates and distributes product ranges for supermarkets and hypermarkets in a number of product categories (e.g.: beauty accessories, cladding for store displays), notably for ELLE products.
In 2015, after taking on ELLE via FDG, I set up a packaging activity. I don’t really have any production. It’s what we call “Jia Gong”, added work. It’s a plexiglass-type tube packaging. I source the products and their packaging (stoppers, ribbons, cardboard, etc.). All of the products go through my company; I check the quality when merchandise is coming in or going out. It’s highly advantageous, as I have a very low rate of defective products. My main customer for ELLE products is Watson’s. They have 2,800 retail outlets in China since July 2016. Mistakes on that scale hurt, so I didn’t want to let the factories take care of it. I’ve employed up to 61 people. The factory part is a constant challenge that I really enjoy. I deal with things that are difficult to anticipate; every day you have to find solutions. It’s a great experience!

When you have a product license in China, how do you fight against competition from counterfeits?

Canton is the capital of counterfeiting! I’ve always chosen product categories that aren’t worth copying. A t-shirt costs anywhere from 2 to 8 dollars to make and is sold for $30. If a counterfeit is sold at 12 dollars, the profit made is worth it. But on a pair of tweezers? A Dora the Explorer hairclip? Licenses in China are good, but not on products that are worth a lot. You have to take that into account in your business plan.

You must have had constraints? How do you figure out all of the administrative documents to provide, especially when working in Chinese?

You’ve got more freedom in China than anywhere else in the world. As the Chinese say, in the north you can think what you want, in the south you can do what you want.
In addition to my tremendous motivation, I was lucky enough to have support. I would never have managed without my Chinese “host” family. When I arrived here, I rented an apartment and the owners became my adoptive family. They invited me to dinner three times a week. I became a big brother to the two girls; we exchanged French, English and Chinese lessons. They have always been an incredible support. Without them, I never would have made it this far. For example, I had a problem with a young assistant that I dismissed during her trial period. She wanted to blackmail me and she called lots of different government organisations that came to check on me constantly. Until my landlord heard about it. From one day to the next they stopped bothering me.

China only works thanks to its networks of relationships, or guanxi networks, in a relatively healthy way in my view, in the sense that you can’t really abuse it. It’s a network that serves to do good. It’s always been about a friendly helping hand. I’ve never seen anyone abuse their power. That can happen, but generally there are two forms of justice in China: the law and that of the network of relationships or connections. And the more just the cause, the more the network will rally because nobody wants to get involved with a crook. That’s China for you: mutual help and freedom.

Everyone has a chance. The Chinese start businesses every day;
some go bankrupt and others make a fortune. Here, people don’t look at pedigree; there is no aristocracy and it’s not always the strongest that win.

You wouldn’t have found this freedom in France?

I think I have a problem with the French. I probably lacked experience and legal advice when I read my contract with FDG. Today I’m in legal proceedings with them.
My ELLE license will expire at the end of 2018. They used me to open up the Chinese market. There weren’t enough funds; I had to once again finance things myself and they did not buy into the company. I put everything I’d earned over 11 years into this project. In April 2017 I received a letter telling me that I no longer had the sub-license in China. That’s wrong!
The stakes are huge for me. Psychologically, it’s not easy. A total failure on this project would wash away 11 years of my life.
It’s a real headache. The problem for me is that with this same license, FDG has some 150 product references in France. I sold 25 of these at Watson’s and I can no longer develop any. If I did, I would be in breach with ELLE and I don’t want that.
For the time being, I am continuing to deliver these products and to invoice in order to pay myself back with my turnover. I’m ready to start again with other brands already. I managed to set up a factory in two months and deliver to Watson’s, so I’m not going to stop now! I’ll certainly lose earnings but in the end they will be the most penalised!
This is a reminder of the reasons why I left France. This is why I feel good in China. Everyone has a chance. The Chinese start businesses every day; some go bankrupt and others make a fortune. Here, people don’t look at pedigree; there is no aristocracy and it’s not always the strongest that win.

What advice do you have for young people today?

Keep your eyes and ears open, not only during your studies but in every area you can. Find what makes you come alive. It won’t necessarily be products or specific fields, it could also be a challenge… and really go for it while you can!

Interview by Marie-Pierre Parlange