Cause and future development trend of mega trade s

¡¡¡¡China¡¯s conference & exhibition industry witnesses rapid development since the mid-1980s and begins to enter the stage of qualitative change in the process of dramatic expansion with average annual rate of 20%, and the trade exhibitions in leading conference & exhibition cities are striding forward in the direction of upsizing, specialization and internationalization. With the increasing internationalization of exhibition industry market and increasing maturity of conference & exhibition enterprises in China, large-scale or mega trade shows will emerge rapidly, and the upsizing of exhibitions will inevitably cause the transformation of exhibition form and management mode. China is now becoming a great conference & exhibition power, so it is necessary for us to take a strategic height to investigate and borrow ideas from development experience of the advanced international exhibition industry countries in mega trade shows, which is conducive to foresee long-term development trend of large-scale exhibitions in China and then to specifically provide guidance from a macro policy level and develop strategic marketing management of industry and enterprise.

¡¡¡¡I. Present situation of mega trade shows at home and abroad

¡¡¡¡(I) Definition of the concept of large-scale and mega trade shows

¡¡¡¡Large-scale or mega trade shows are not specifically defined in the world at present. The work ¡°mega trade show¡± is not stated in official documents of internationally authoritative associations of conference & exhibition industry, but only in few media reports. The scale of ¡°large-scale show¡± is not clearly defined, too. However, this concept is not meaningless. Conference & exhibition industry of Europe, U.S. and other developed countries evolved naturally in the long-term market economy process and witnesses frustrating and exploring courses. Upon 20 years rapid development, China¡¯s conference & exhibition industry has had some characteristics of exhibitions in great conference & exhibition powers of Europe and U.S. and also features particular phenomenon induced by two different economic systems. It is significant for us to borrow ideas from mega trade shows of developed countries through exploring them and finding the basic formation rule and trend of them so as to make China a great conference & exhibition power.

¡¡¡¡The scale is one of success factors of exhibition. China has numerous exhibitions with uneven quality. To facilitate the study, the exhibitions with area over 50,000m2 (included) and those with area over 100,000m2 (included) among the exhibitions above designated scale are classified as large-scale show and mega trade show respectively in this article, thus providing standard for studying front-end development.

¡¡¡¡£¨¶þ£©(II) General situation

¡¡¡¡Professional exhibitions of Germany are the best upon a general survey of exhibition scale of developed countries of conference & exhibition industry, and international exhibitions of the country in the industry account for 2/3 all over the world. According to data provided by Association of the German Trade Fair Industry (AUMA), total 157 trade shows were held in Germany in 2008, including 30 shows with net area over 100,000m2 and 62 shows with neat area over 50,000m2. Net area of the largest show reaches 223,482m2. And based on conversion practice of total exhibition area, about 90 shows with area over 100,000m2 are held in Germany annually.

¡¡¡¡Some leading exhibition companies of China also establish solid market foundations during the short-term development for over two decades and accumulate certain strength for deeply getting involved in the fierce market competition, which is marked by the emergence of 256 brand exhibitions above designated scale in China. According to the latest data released by China Conference & exhibition Research Center (CCERC), three were 36 exhibitions with total area over 100,000m2 (included), 115 exhibitions with area over 50,000m2 (included) and 105 exhibitions with area over 30,000m2 (included) among China¡¯s exhibitions above designated scale in 2008.

¡¡¡¡Compared with Germany conference & exhibition industry, China has huge space for development of exhibition scale. Currently Germany has 23 large available exhibition halls with area of 2.7 million m2, and the exhibitions with area over 100,000m2 accounted for 60% of total exhibitions in 2008. At the present stage, the conference & exhibition cities listed in statistical range of above-scale exhibitions has amounted to 39 and about 80 exhibition halls are vigorous, but the exhibitions with area over 100,000m2 only accounts for a third of those in Germany. However, total coverage of above-scale exhibitions in China has accounted for approximate 50% of national exhibitions (held in conference & exhibition center), increased by about 6%, which shows that upsizing development speed of exhibition scale has been higher than the average industry development, upsizing has become an inevitable trend of development of China¡¯s conference & exhibition market, and the exhibitions are gradually approaching the advanced exhibition powers in the world in terms of scale characteristics.

¡¡¡¡II. Inherent law for formation of mega trade show

¡¡¡¡(I) Scale economy promotes the formation of large-scale show

¡¡¡¡As known to all, exhibition economy is a kind of scale economy. For exhibition organizers, the more exhibitors attracted by exhibitions and the larger exhibition area mean the higher direct economic returns, and correspondingly the ratio of unit benefit of exhibition scale and exhibition cost will be much higher. Meanwhile, the fierce competition in the market urges exhibition organizers to expand their exhibition scale to maintain their own market position and finally assume and stabilize the leadership and even monopoly of respective industries and markets.

¡¡¡¡Based on the investigation of Chinese and foreign exhibition history, the development of mega trade show started with the initially narrow exhibition area, small exhibition scale and concentrated exhibits and then the mega trade show develops into the one featuring gradually expanded channel of exhibitors, increasing exhibition area and diversified exhibits. Germany Hannover Messe is undoubtedly the typical case of mega trade show and its development history clearly shows the development track of internationally ultra-large exhibition. Hannover Messe originated from ¡°Hannover Export Fair¡± held by Hannover for rebuilding local economy aiming at exporting industrial products manufactured in Germany to gain foreign exchange. About 1,300 companies participate in the exhibition with area of 30,000m2, more than 730,000 visitors were attracted to purchase products on the spot and the contracts with amount more than US$ 31 million were concluded in the 21-day exhibition. With the success in the first exhibition, Hannover Export Fair was renamed ¡°Germany Industry Exhibition¡± in 1950 and U.S. companies were invited to participate in the exhibition. In 1951, the exhibition was officially renamed ¡°Hannover Messe¡± and developed into the world-class industrial fair with total exhibition area maintained at 370,000 m2 more or less.

¡¡¡¡The internationalization trend of conference & exhibition industry also provides space for further expansion of exhibition scale. And exhibition magnates are no longer content with attracting domestic and local exhibitors, but aim at international market and the influence of exhibitions in the world to widely improve international reputation and participation. According to the statistics of Germany AUMA, the proportion of international exhibitors in Germany¡¯s exhibitions is kept about 50% of the total in recent years and visitors around the world account for more than 30%.9

¡¡¡¡Enormous social benefit and economic returns from conference & exhibition industry also propel the governments in countries around the world to give full support in respect of policy and finance, and many cities invest in the construction and extension of large-scale exhibition halls and encourage the holding of large-scale international trade shows to improve city image, expand internal and external communication and promote growth of regional economy. These macro policies and external environment further promote the increase in exhibition scale. Local governments of some countries in Europe invest almost one hundred percent of funds in the construction of large-scale exhibition halls and infrastructure, and local governments of China also invest the construction of most of exhibition halls, which provides favorable external conditions for increase in exhibition scale.

¡¡¡¡(II) Integration of industry chains creates large exhibition effect

¡¡¡¡The study on internal factors for expansion of exhibition scale contributes to the clear grasp of threads and tendency of increasingly upsizing of industrial professional exhibitions, and has prospective significances for the study on future development of exhibition industry in China.

¡¡¡¡In preliminary stage, the core exhibition scope of professional exhibition is usually determined based on the field with relatively strong market potential of one industry. After the first attempt receiving active industry response, in order to acquire larger market influence, the exhibition organizer will add and expand products, technology and services relating to the original core exhibition scope by all means, so as to attract more involved companies of the industry chain to participate in the exhibition. As a result, this professional exhibition will cover longer and longer industry chain, develop into one meeting place for various industry suppliers and buyers, during which mega trade shows come into being gradually.

¡¡¡¡A well-known case can demonstrate the process of industry chain connection and continuation in mega trade shows. Before 1986, CeBIT in Hannover, Germany was only one special part of another show with office automation and equipment as the major exhibition scope. With positive industry responses and the rise of electronic technology in 1960s, PC became the major part of the show, and then digital processing technology, software development and communication technology, network computing, multimedia, and internet technology were added into the show one after another. In 1980s, information and communication technology became the focus of the show. Until 2009, exhibition scope of CeBIT had developed to such extent that brand new industry fields like network community, green IT, remote health care, IT safety, mobile internet, etc. were covered. The show scale has reached over 400,000 m2 currently from 70,000 m2 originally, and the show has become one of the mega professional shows internationally.

¡¡¡¡It is an inevitable phenomenon that, any brand exhibitions with sound market root will become large scale and mega scale one. From the perspective of industry development, coverage of gradually expanding exhibition scope is the whole process of continuation of this industry chain, and the expansion of show scale is exactly the integration effect of upstream and downstream industries. Some leading exhibition companies in China have realized that, the organizer of one professional show shall perceive requirement of upstream and downstream industries, and launch shows covering the whole industry chain. At present, professional shows of different fields in related industries above designated size in China can be found everywhere in show projects.

¡¡¡¡(III) Integration characteristics manifest mature stage of large-scale show

¡¡¡¡During the upsizing process, integration of exhibitions is an inevitable phenomenon. The newly added special shows for mega trade shows or shows that are held at the same time and same place will be more and more different from the original scope of source shows. The longer the industry chain is, the remoter the relationship between the upstream products and indirect products as well as technology is. The wider the exhibition scope is, the more integrate the types and applications of exhibits are. Taking BAUMA in Munich, Germany as an example, the exhibition scope mainly concentrated on building materials and equipment, engineering vehicles, etc. when it was established more than 50 years ago; however, it has been divided into four industrial categories and 23 field sub-categories, with mining machinery show being specially held, meanwhile it also expands the area of special show area such as building templates, scaffolds, construction equipment, tools, etc. its ¡°comprehensive exhibit scope provides products and services with clear and complete types to the market.¡±11. It is obvious that its exhibition span is increasing, the relevancy between some exhibits in quite a few fields are few. Its exhibition contents include related or indirect fields such as mining machinery, transmission engineering, fluid engineering, power supply units, test control systematic engineering, operation safety, etc.

¡¡¡¡Integration tendency of exhibitions in industry is natural phenomenon under market economy background, it is the market that urges the exhibition organizers to furthest expand exhibition scale, widen exhibition scope, and turn from relatively concentrated professional show into mega comprehensive industrial show. Its merits are evident, that is, strengthen the industry communication internationally, intensify communication between various links and fields in the industry chain, converge leading companies in the industry, intensively display the most advanced production technology in all industry fields, attract trading visitor from all over the world. Nevertheless, its demerits will also appear gradually as it grows and integrates.

¡¡From the above we can see that, any kind of market type has two sides, supply-demand relationship of the market directly influences existence and position of professional exhibition or comprehensive exhibition in the market. The comprehensive characteristic generated by the upsizing of exhibition reduces the original professional advantages, and inevitably has many inherent disadvantages of comprehensive exhibitions, as the exhibition covers too many industries and fields, target location is decentralized, and correspondence between exhibition organizers and visitors decreases, and leads to declining of exhibition effect.

¡¡¡¡Besides, industry professional exhibitions will encounter a series of changes and differences, such as physical facility supports, management of large projects, relocation of exhibition, strategic thinking, etc. in the process of developing into super-large scale one, all these will have an important effect on exhibition development.

¡¡¡¡How to keep the merits of professional exhibitions continuously and meanwhile avoid all kinds of demerits aroused by upsizing? This is a market challenge confronted by leading companies in exhibition industry at home and abroad. In recent years, international comprehensive shows are decreasing or going through reforms, and a lot of mega trade shows have embarked on the path of reform and change.

¡¡¡¡III. Development tendency of mega trade show

¡¡¡¡Exhibition scale is one of the important indexes symbolizing one country strides forward from a big one into a powerful one in terms of conference & exhibition industry, it manifests that the exhibition industry market has turned from the extensive pattern increasing in orders of magnitude into being dominated by large scale and high quality exhibitions, and leads the market to becoming normal and international. On the other hand, in current global conference & exhibition market, professional exhibition has already been the mainstream of conference & exhibition industry, representing the development tendency of conference & exhibition economy. By studying current changes and development tendency of mega trade shows at home and abroad, we can find that, mega trade shows have the significant tendency of returning to professional, which mainly include the following changes:

¡¡¡¡(I) Division of special show

¡¡¡¡One of the common ways to expand show scale is to continuously add special shows for related industry chain and emerging industry fields based on the source show. At the same time, the source show scope is re-divided, and the related industry fields with obvious show scale increase are set up as new special shows, as a result, the scope of mega trade show consists of a series of special shows. Evolution of Hannover Messe fully manifests this tendency. Based on ten professional shows such as automation show, logistics show, instrument and meter show, robot show, casting show, etc., it integrated the E-Motive special which had already gone through several reforms and renamed the E-Motive as ¡°MobilTec¡±, which intensively showed the latest technology including traditional power transmission, hybrid driving system, transmission power storage device, alternative fuels, etc.; this year ¡°Wind Energy Exhibition¡± appeared independently in Hannover Messe for the first time, which is the effective combination of two original flagship shows, namely, ¡°Energy show¡± and ¡°Power Plant Technology show¡± 12. At present, the exhibition scope of Hannover Messe has covered 13 special flagship shows.

¡¡¡¡Relatively concentrated special shows developed from large and complete exhibition scope has been surveyed and practiced in large industry and professional shows in China, some market reforms for large-scale shows led by the government may refer to this development pattern.

¡¡¡¡£¨¶þ£©(II) Division of exhibition period

¡¡This developing pattern is to divide the whole exhibition into different exhibition period according to general types of the exhibition scope, and the exhibition therefore can be held one by one. In this way, the conflicts in physical facilities such as exhibition halls, reception management, separation of customers from merchants, etc. can be relieved to a great degree. The Canton Fair in China has conducted a rewarding try. Since the 91st session in 2002, the Canton Fair had been divided into two periods, which made a breakthrough in a long-troubling exhibition area bottleneck. Since the 104th session in 2008, the Fair has been divided into three periods, with the exhibition period being reduced to five days, the special exhibition areas being subdivided from 34 areas to 50 areas, among which the areas of 27 exhibition areas were more than 20,000 m2. This measure not only maintained the comprehensive characteristics and advantages of Canton Fair, but also conformed to development tendency of international exhibition industry and improved the professional level of Canton Fair. Appropriate expansion of exhibition scale provides more companies with participation chance.

¡¡¡¡Although the exhibition period division pattern is one measure to solve the actual problems encountered, it undoubtedly provides worthy and significant solutions for the future development of mega trade shows in China, and is in favor of making prospective strategic plan.

¡¡¡¡(III) Holding special show independently

¡¡¡¡For large exhibitions, in the process of connection between upstream and downstream industries, the development scale and speed of some special shows are evidently higher than those of other exhibitions, and when the shows themselves reach considerable scales, they can form shows independently thus release more space for source shows, establish new shows, and integrate their related industry chain. The unique ¡°Frankfurt Principle¡± 14 of Messe Frankfurt Exhibition GmbH in Germany systematically represents how the special shows become independent from various mega trade shows and the establishment process of new special shows.

¡¡¡¡The ¡°Ambiente¡± and ¡°Tendence¡± established in 1150 are the ancestors of all the exhibition projects of Messe Frankfurt Exhibition GmbH. From 1959 to 2003, Interstoff, ISH, Heimtextil, Automechanika, Musikmess, and other exhibitions had been independent from the ¡°Ambiente¡± and ¡°Tendence¡±. In 2003, the Premiere was divided into ¡°PW¡± ¡°CW¡± and ¡°BW¡± which were held independently. In 2004, The ¡°BW¡± was renamed as ¡°Beauty Week¡±, and subdivided into four special exhibitions, namely, ¡°Beautyworld¡± ¡°Cosmetica¡± ¡°Lifetime¡± ¡°Passione¡±. All these exhibitions become the international brand professional exhibitions of Messe Frankfurt Exhibition GmbH.

¡¡¡¡The rapid development of certain type of special exhibitions is inseparable from the new increasing points of this industry field. China is one of the emerging industry regions with swift development of new technology globally, and companies possessing large industry exhibitions may closely notice the new tendencies in special fields, seize the opportunities, and create new exhibition projects.

¡¡¡¡£¨(IV) Procurement cooperation of international regional exhibition participation

¡¡¡¡Recently, a new international cooperation pattern called ¡°Partner Country¡± or ¡°Partner Region¡± has occured in Germany, that is, when each exhibition is held, one country or region in the world will be selected as a main cooperation partner, which will organize the delegations or trade negotiation groups in the name of the country or region, and develop economic and trade communication activities and high-level forums at government level. Taking BAUMA in Munich, Germany as an example, it has organized delegations from some important areas including Latin America, Commonwealth of independent states, and the Arabian Peninsula to participate in the exhibition for procurement, and carry out various channels of government and industry exchange activities since 2001. India was chosen as the partner country of the exhibition held in 2010. The cooperation pattern has led to the multiplied increase of exhibition visitors from the partner regions, quantity of exhibition visitors from the partner region, namely, the Arabian Peninsula, increased quickly and reached more than 2,000 (962 in 2004) in 2007.15

¡¡¡¡Deutsche Messe AG has commenced the attempt to take the large-scale brand exhibition as a platform for national level economic and trade cooperation as early as 1990s, and in recent years, this pioneering work is further strengthened. Since 2005, Hannover Messe has invited Russia, India, Turkey, Japan and South Korea respectively to participate in the exhibition as ¡°Partner Country¡±, which upgraded the commercial activities among industries to the economic and trade communication among governments. The partner countries for each exhibition not only show the latest technology and equipment, but also bring the rich cultural communication projects. Besides, senior government officials frequently attend activities in all occasions, which deepen the communication of economy, technology and culture between two countries. Italy, the partner country in 2010, will organize hundreds of companies to show the industrial equipment and technology with Italian characteristics 16.

¡¡¡¡This cooperation pattern extends functions of mega trade shows, promotes cooperation fields of economic, trade and technical communication among countries, meanwhile expands the participating scope for international exhibitors and professional exhibition visitors, and has strong reference for mega trade shows in China.

¡¡¡¡(V) Exhibition brand transplantation

¡¡¡¡¡°Exhibition Brand Exports¡± is the common way for international exhibition giants from European and American developed countries to develop business in emerging exhibition areas in the world. The advantages of oversea strategy lie in the established brand position, powerful capital strength, advanced management pattern, etc.. In China¡¯s conference & exhibition market, lots of brand exhibitions from Germany, UK, USA, France, etc. have occupied considerable market share by means of transplantation, acquisition, cooperation, etc. In addition, these exhibition giants are also involved in some countries with relatively rapid economic development. Taking German exhibition organizers as an example, more than 40 institutions have set up business institutions or launched exhibitions overseas. In 2007, 222 oversea exhibitions were held with Asia as main market where the total amount of exhibitions reached 108, accounting for 48.5%, 57 exhibitions were held in Europe with Eastern Europe as main market, accounting for 25.5%, and over 50 exhibitions were launched in North America, Latin America, Middle East, etc.

¡¡¡¡At this stage in China, some brand exhibitions begin to launch in abroad potential market, which illustrates that some exhibition organizations with prospective thinking have aimed at the broader international markets already. They attempt to take the first step by means of ¡°borrowing boat to sail¡± and independently organizing, some exhibition projects have been held at abroad, for example, in 2007, East China Fair was held in Japan, in 2008, CCC Exhibition participated in the launch of Germany (Hamburg) Household Consumer Goods Procurement Expo as one exhibitor group, in this June, it joined in Hongkong Global Resources and held China Yiwu International Commodities Fair in Dubai.

¡¡¡¡It shall be pointed out that the exports of German exhibition giants are not merely the exhibition projects. Association of the German Trade Fair Industry (AUMA) sets up ¡°German Overseas Exhibition Quality System¡± (GTO), which regulates that the exhibition organizer can use GTQ if only it owns self-owned brand, and takes charge of realizing exhibition concepts, preparing budget and controlling the international marketing, so as to maintain the leading domestic quality level of export exhibitions, and ensure that the exhibitor can receive satisfied exhibition effect. As a result, after making sufficient strategic arrangements for international macro market, German exhibition companies will enter into the targeted areas purposely and step by step, and advanced exhibition management pattern and brand image would be the first transplantation. The basic purposes of brand exhibition transplantation in Germany is: obtaining faster growth in areas outside Europe, manifesting their professional globalization level in related industry fields, and attracting new exhibitors and exhibition visitors for advanced exhibitions in Germany.

¡¡¡¡In China, based on going abroad and promoting export sales, the exhibition companies shall further improve brand exhibition export idea, and profoundly understand underlying meaning of international brand transplantation, show China¡¯s international service concept and principles while exhibiting the high-quality exporting products and technology, and keep the vitality of brand exhibition export.

¡¡¡¡The exploration and study for mega trade shows have just started, whereas the prospective study is conductive to China to learn advanced exhibition development concept and pattern abroad, summarize accumulated valuable experience in China, avoid and reduce the tortuous process which the foreign exhibition industry has experienced, so as to provide the future development of China with pioneering strategic thinking.

¡¡¡¡Source: China Convention & Exhibition Society