February/March 2014 : To our readers
Conventions and exhibitions: Asia-Pacific rising
Asia-Pacific’s exhibitions sector is brewing with opportunities, and several trends are gaining momentum now. UFI’s Mark Cochrane shares his outlook for 2013 with Karen Yue
How did Asia-Pacific’s exhibitions industry do in 2012 as a destination?
It takes several months for us to complete the update of our database of more than 2,000 Asian B2B exhibitions. So while I do not have a definitive answer regarding growth in 2012, my sense is that it was another solid year for exhibitions in this region. (See chart on Asian exhibition space sold below.)
I expect South-east Asia will continue to perform well as international organisers are very interested in launches and acquisitions in this region.
China – despite concerns that the economy has slowed – is still expected to record GDP growth of 7.5 per cent in 2012. That should provide plenty of support for the growth of B2B exhibitions in China.
However, it is worth noting that the growth in China’s exhibitions industry is by no means evenly spread. The category-leading exhibitions and events organised by international organisers will generally outperform the weaker tier-two and tier-three events in most categories.
Which destinations fared best in 2012 according to UFI’s research?
Again, we do not have definitive 2012 figures yet, but I would expect that the South-east Asian trend, which began in 2011, will continue throughout 2012 and 2013. The fastest-growing markets, measured by space sold in 2011, included Singapore, Malaysia, the Philippines, Thailand and Indonesia. I would expect that 2012 would result in a similar configuration of these markets at the top of the growth chart.
Large markets such as China, India and South Korea will also likely post modest, but reasonable exhibition growth.
And unfortunately, once again, Japan can be expected to be one of the poorest performers in 2012, given the strength of the yen and the weakness in Japan’s underlying economic fundamentals. Of course, Japan’s ongoing political dispute with China over the Diaoyu/Senkaku islands will hit trade between the two countries and that will inevitably negatively impact B2B exhibitions in Japan.
How did Asia-Pacific’s exhibitions industry do in 2012 as a source market?
Trends in the exhibitions industry generally take several years to play out, so we are seeing quite a few interesting trends gaining momentum. There are three most interesting trends.
First, organisers are showing interest in exploring visitor services such as match-making, video conferencing for VIP visitors who can cannot attend the exhibition in person and “guided tours” of the floor of large exhibitions. These are just some of the innovative visitor services currently being evaluated by exhibition organisers.
Second, paid conferences are getting increased attention from exhibition organisers as a means to generate both incremental revenues and unique content that can be re-used on an online platform.
Third, mergers and acquisition activity is increasing, as exhibition organisers with international reach are looking at Asia as a growth opportunity – especially when compared with their home markets in the US and Europe where finding growth is much more challenging. There are plenty of such examples throughout 2012. For instance, Tarsus took a 50 per cent stake in the China International Automotive Aftermarket Industry and Tuning (Guangzhou) Trade Fair, and Global Sources acquired an 80 per cent stake in China (Shenzhen) International Brand Clothing & Accessories Fair.
This trend will drive growth within these individual shows as the international organiser will help the local (partner) to bring in a greater variety of visitors and exhibitors from overseas. It will also give the international organiser and the local partner a chance to work together to launch other new exhibitions in that particular market. Both sides of the deal will benefit with increased opportunities and incremental growth.
Which industries generated the highest frequency/scale of exhibitions in this region in 2012?
Actually, B2B exhibitions in Asia are very well diversified in terms of industry categories. We segment the Asian exhibitions market into 27 different industry categories. In 2011, no category held more than 10 per cent (in shares). The three largest categories, Furniture & Interior Design, Electronics & Components, and Engineering & Industrial Machinery, each held a 10 per cent share of the total Asian market.
All other categories accounted for six per cent or less of total space sold. In any given year, some categories may have an increased number of launches – energy, construction and automotive come to mind – but in terms of regional space sold, the industry will remain very well diversified.
Q: What sort of growth opportunities will Asia-Pacific see in 2013? Which destinations in this region will stand out?
A: China dominates the exhibitions industry in Asia, accounting for more than 55 per cent of all space sold in the region in 2011. So as long as the Chinese economy remains vibrant, one can expect the exhibitions industry in Asia to post a reasonably strong year.
I think that will be the case in 2013. China’s overall economic growth may modulate and the exhibitions industry in mainland China may begin to mature and consolidate, but I think you will see quite strong growth for the larger, higher-quality events across the industry in China.
As I had said earlier, all indications are that the growth recorded in South-east Asia in 2011 will continue in 2012 and 2013. There is a lot of excitement about the exhibition opportunities in markets such as Indonesia, Malaysia and even Myanmar.
This is one of the many reasons that the annual UFI Open Seminar in Asia will be held in Jakarta in February this year. Markets in South-east Asia – in particular Indonesia – are finally and deservedly gaining attention.
For example, Indonesia is one of the most under-served exhibitions markets in Asia with a population of 240 million and a GDP of US$845 billion. The economy there continues to grow and Jakarta is adding two new exhibition venues in the coming few years. Yet, measured by net square metres sold, Indonesia ranks 11th in Asia, behind Singapore.
The growth opportunity there and across South-east Asia is significant and should not be underestimated.