Suzhou's 'own-label' expos dispel downturn gloom

SUZHOU: At a time when the global outlook for the expo sector, especially for those in Europe, remains gloomy, Glory Exhibition, a subsidiary of the Suzhou International Exhibition Center (SuzhouExpo) in Jiangsu, is striving to counter the downward the trend through innovative business planning and by working ever more closely with local government departments.

The company, established in 2004 mainly focuses on organizing own-label expos for the SuzhouExpo and has been witnessing an annual growth rate of 30 percent in this aspect of its business recent years. Its business revenue reached 20 million yuan last year, accounting for 43 percent of its income, also representing 50 percent of the whole of the revenue generated by the SuzhouExpo in 2008.

Chen Gang, general manager of SuzhouExpo, said: "As one of the major venues for international expos in the Yangtze River Delta region, we have some problems in luring a sufficient number exhibitions to Suzhou, due to both the global financial crisis and the fierce level of competition in China's expo industry.

"Glory Exhibition's initial role was to organize self-branded expos for us and it has now become another important profit source for the SuzhouExpo. This is due to its creative business mode, and the industrial and geographic advantages of Suzhou."

Before the launch of the SuzhouExpo in 2003, Chen visited a number of major expo venues throughout the world, hoping to develop a winning formula of his own.

New business models

Following his analysis of the major business models for international venues, Chen realized that, as a newcomer in China's thriving expo sector, SuzhouExpo needed to offer out something quite different.

Expo venues in Germany, particularly those in the city of Hannover, he found were hugely popular in Europe. Many of these had been established as joint ventures between the local government and professional exhibition companies. Typically, the government was responsible for the initial investment and launched joint-venture companies to operate these venues in association with major expo firms. By following this route, many of the venues could achieve sustainable revenue through the efforts of their private sector partners.

Chen said: "In China, the German model has been followed by a number of venues, including the Shanghai New International Expo Centre (SNIEC) in Pudong. This is jointly owned by the State-owned Shanghai Lujiazui Development and the Germany expo giants Deutsche Messe AG, Messe Duesseldorf GmbH and Messe Muenchen GmbH.

"The SNIEC's profitability is largely due to the continuing involvement of these German exhibition firms."

In a number of Asian cities, such as Hong Kong and Singapore, Chen found that many of the expo venues were not only responsible for their own business operation, but also for providing other services, such as food and beverages. Such services usually provided vital additional revenues during lean periods.

For SuzhouExpo, though the Suzhou government had mapped out its own plan to boost the local expo economy, the sector as a whole remains underdeveloped, with a concurrent lack of quality professional expo firms.

Chen said: "Exhibition firms in Suzhou are mostly small player in terms of business scale and revenue. They frequently have difficulties in organizing large-scale exhibitions and conferences."

For this reason, SuzhouExpo decided to launch an expo firm of its own in a bid to increase its business profits and attract more exhibitors.

Explaining the decision, Chen said: "As the most active player in Suzhou's expo sector, we need to foster the local expo market ourselves. By doing this, we can attract a greater number of regular exhibitors and develop the resources to nurture a healthy and robust expo market. It is the best means for us to fully utilize the facilities of the Suzhou International Exhibition Center and maximize our profits."

Self-branded expos

With a registered capital of 5 million yuan, Glory Exhibition has so far organized 12 differently-styles of self-branded events, largely as a result of working closely with industrial associations and local governments.

According to Chen, these "own-label" expos can be classified into two simple categories: trade expos and consumer goods expos.

On the trade side, the China Suzhou International SME Fair, an international event for small and medium-sized companies, has been successfully held for four consecutive years. Over that time, the size of the exhibition has grown to 60,000 sq m from 30,000 sq m.

Through it close associations with the Ministry of Industry and Information Technology (MIIT) and the Jiangsu provincial government, the event regularly attracts 1,200 SMEs from China and as well as 30 other countries and regions around the world. It has now become well-established as a major SME event and one with a global influence.

To coincide with the 2008 event, SuzhouExpo organized the Jinji Lake Forum, aiming to establish it as the "Davos Forum for SMEs" by promoting the exchange of ideas between "movers and shakers" in the global SME sector.

The Suzhou International Industry Fair, another event organized by Glory Exhibition and SuzhouExpo, is now in its sixth successful year. Staged in conjunction with the relevant industry associations, it is now the largest product showcase and trading platform for machinery and mould makers in Jiangsu.

On the consumer goods side, Suzhou's relatively high GDP and comparatively well-off residential base has proved fertile ground for Glory Exhibition to establish expos in a number of high value sectors, including housing, automotive and wedding products.

Chen said: "In the auto sector, for example, the number of private cars in Suzhou this year exceeded 700,000, a rise of 11.9 percent year-on-year. As a result, many car manufacturers are now waking up to the importance of our auto expo."

According to Chen, the show's initial success will see next year's Suzhou Auto Expo upgraded to be a "Class-B" event, with major automakers offering direct support to the show.

Besides its growing number of trade and consumer shows, Glory Exhibition has also launched "Expo Sale", a proprietary brand aimed at allowing exhibitors to market discounted products during events held at the exhibition center.

Chen hopes that Expo Sale will see more branded exhibitors lured to promote the sales of their products at the exhibition, even before they officially launch their products in the mainstream market.

The Expo Sale has been designed as a one-stop service for exhibitors to sell their products directly to consumers and, to Chen's mind, such a platform will provides an ideal opportunity for SMEs working on a low promotional budget.

Explaining the concept, he said: "For example, we can work with local TV stations to promote sales of cars at a discounted price during an upcoming auto expo, but we can also work with major expo venues nationwide to enable SMEs to sell products throughout China. This allows them to obtain the utmost benefits at the lowest possible cost."

In the future, Chen said, the Expo Sale concept will be promoted online to increase accessibility and provide SMEs with a platform to trade with overseas businesses and consumers.

Working with government

Whilst Chen acknowledges that the ongoing global financial crisis has forced many SMEs to reduce their expo budgets, he sees the central government's 4-trillion-yuan stimulus plan as a reason to be optimistic. As a result of the government plan, many local governments are now actively offering financial aid for SMEs to take part in trading expos.

Reflecting on the opportunities this opens up, Chen said: "Glory Exhibition's advantage lies in its sound ties with major international buyers, so this year we are working closely with the Suzhou and Jiangsu local governments in a bid to stage the expos for ameliorating the current difficulties facing many SMEs."

In May Glory Exhibition collaborated with the Jiangsu provincial government and the MIIT to stage the Jiangsu Equipment Manufacturing Supply China Expo, a bid to meet the State Council's recent call to revitalize the nation's equipment manufacturing sector.

Looking to the future, Chen said: "Despite the difficulties arising from the global financial crisis, we believe we can still match our previous business performance this year, as long as we continue to adopt creative business plans and work closely with government bodies."

(China Daily 08/31/2009 page8)