More and more businessmen looking to buy souped-up lawnmowers or sell McDonalds franchises are flooding into China to attend its trade shows, which like so much else in this country, are booming. For an indicator of the trend, look to the Shanghai New International Expo Center, now No one in the Asia-Pacific area in terms of space contracted out, which totaled almost 1.9m sq m in 2004.
Apart from the Chinese trade show centers, international organizers including German giants Messe Frankfurt and Deutsche Messe, have set up shop in Shanghai or Beijing and are organizing massive exhibitions covering all sectors of the economy through local joint ventures or, since new regulations freed up the market last year, on their own.
"There's no question that it is a revolutionary time for exhibitions in China, and the industry is undergoing massive transformation into a modern and professional entity," said Kate Newman, Messe Frankfurt's head of corporate communications for Asia Pacific. "Both Chinese and foreign companies are looking for effective ways to promote their products in the world's largest and fastest-growing marketplace." Last year, China's trade show industry generated US$625m in revenues for exhibition organizers, up more than 20% from the year before. Until the mid-1990s, the only exhibition hall in Shanghai was the downtown birthday-cake-structure built by the Soviets in the late 1950s. By next year, Shanghai's exhibition space will total 192,000 sq m, gaining on the 548,000 sq m of space in Hong Kong.
Besides generating billions of dollars for convention centers and event organizers, the exhibition circuit is also a boon to the local hospitality industry. Business tourism brings in big money-executives on expense accounts attending trade shows often fly business class, stay in five star hotels and eat at the best restaurants in town. The sky-scraping hotels of Shanghai certainly appreciate the shows. "When there's a show we're full, you have to book far in advance and we charge rack rate," said Yale Yu, public relations manager of Pudong's five-star Purple Mountain Hotel.
Global manufacturing has shifted from the West to Asia and big export fairs have followed. For decades, international consumers have come to Hong Kong fairs to buy jewelry and watches and to Singapore for hand-held electronics. Now, the same well-made low-priced goods contributing to China's phenomenal export growth are drawing increasingly international crowds to local fairs. At this year's Guangzhou lighting show, for instance, of the 41,081 visitors 8,000 buyers were from overseas, up 120% from 2004.
Another recent development is fairs set up to serve that oft-quoted demographic known as "China's 1.3bn consumers" Local fairs, some on a huge scale, take place all over the country, one of the most famous being in the town of Yiwu southwest of Shanghai.
"The bulk of the shows -maybe 80% – are Chinese companies doing business with each other [including Chinese subsidiaries of multinationals],"said Paul Woodward, manager of the Asia Pacific branch of UFI, global exhibition industry association … but international sellers also have gotten in the game."
Despite impressive growth, China's trade show market is still in its infancy, and the world's biggest showcase exhibits still tend to be held in Europe and the US. Last year, CeBIT, a long established world famous IT fair held in Hanover, Germany, attracted almost half a million visitors with Asia accounting for 35,000 of the visitors to Hanover. CeBIT's Shanghai event in 2004, however, attracted only 51,000 attendees.
European shows have a history of higher quality-and the explosion of shows in China's market has led to a plethora of low-quality events fighting for market share. Every municipal government in China seems to have built exhibition centers, highways and brand new airports in an attempt to lure businessmen and their trade-fair dollars to their city.
The effects of a saturated market are felt even in Shanghai. [The Shanghai International Powder/Bulk Exhibition and Conference] "was better three years ago" one exhibitor said, gesturing toward the half empty Expo center. "They are getting more, so they're getting worse."
But it is the smaller cities that really struggle to compete. "It is simply not reasonable to think that every single event in every single city claiming to be the international event for that industry is going to survive," Woodward said. And Woodward points out the obvious: an executive doesn't want to fly half way around the world to go to a second-rate show.
Officials at China's official trade promotion organization, the CCPIT, are trying to work out the appropriate rules and regulations for the emerging market, still struggling to make order out of new commerce chaos. The body is currently pushing to form a Chinese Association for the Exhibition Industry to ensure adherence to international standards.
Messe Frankfurt's Newman suggests the market mechanism is beginning to take over where regulations currently fall short. "what we see happening today is a consolidation across the board, as smaller exhibitions give way to larger, more professional fairs, and organizers join together to pool their finances and energy in order to create better events," Newman said. That means it will be Shanghai and its main competitors, Beijing and Guangzhou, which will dominate ever more the international exhibition business. But the industry appears set to continue to grow. "There is a long way to go, but there is no reason to believe in 10 years the Chinese trade show industry won't be comparable to the major European markets," Woodward said.