Global exhibition organizers put on a show of confidence

The economy may be slowing, but the events business is holding up as the service sector develops, reports Shi Jing in Shanghai.

The economic outlook for this year may be muted, but for the Chinese exhibition industry, it is likely to be yet another period of steady growth.

Figures are not yet in for last year, but the China Exhibition Industry Development Report 2014, released in October 2014 by the department of trade in services and commercial services at the Ministry of Commerce, and China Convention and Exhibition Society, shows that the sector's value was 387 billion yuan ($62 billion) in 2013, up 10.6 percent year-on-year. The industry accounted for 1.5 percent of the value of the tertiary sector.

A total of 7,319 shows were held in 2013, up 1.8 percent, and the exhibit area grew 4.5 percent to 93.9 million square meters.

And according to the 13th Global Exhibition Barometer released by The Global Association of the Exhibition Industry last July, 60 percent of the polled Chinese exhibitors said they expect turnover to increase in 2015.

In addition, 72 percent of those exhibitors said that the impact of the global economic downturn that began in 2009 is over or will be by the end of 2015.

And to meet growing demand for staff, many higher education institutions, including vocational schools, offer specialized courses and majors. According to the China Convention Exhibition Event Society, 229 higher educational institutions offered exhibition majors as of 2014.

Lyu Jijian, deputy director of the department of trade in services and commercial services at the Ministry of Commerce, said that the exhibition industry is an important component of the modern service industry and serves as a bridge between production and consumption. It helps boost regional economies and ancillary services.

"The exhibition industry has become a new driving force of economic growth. Human resources, materials, funds, technology and information are all collected at various exhibitions. Catering, accommodation, transportation, retailing, tourism and a number of other service industries have gained vitality. The exhibition industry also plays an important role to help transform economic growth pattern, optimize industrial structure and upgrade the country's economy," he said.

The large scale of the nation's exhibition industry has attracted many world-leading companies in the sector.

Klaus Dittrich, chairman and CEO of Messe Munchen GmbH, which is one of the world's largest exhibition companies, long ago brought the construction sector's flagship show to China.

When Bauma China, modeled on an event in Germany held for some six decades, held its first show in the nation back in 2002, it had fewer than 500 exhibitors and covered only 40,000 sq m. In 2014, it had more than 3,000 exhibitors and the area exceeded 300,000 sq m.

Bauma China is also drawing rising interest from companies around the globe. Israel sent a delegation of 50 people to Bauma China 2014 to scout for new equipment.

Bauma China 2014 also had delegations from South America, Africa and Russia.

"We have growth rates here that you will never see in another country. Even though ... China's economic growth has decreased from 10 percent annually during the previous decade to about 7 percent now, the market size is still huge and the country's economy very dynamic," Dittrich said.

All of the company's shows in China are profitable. Even though Messe Munchen dropped less-profitable shows elsewhere, it has yet to do so in China.

The target for sales growth outside Germany last year was 50 percent, and China was a major force in realizing this goal despite its economic slowdown.

What are the secrets of the success of the German exhibition giant?

Patience, for one thing. Investment in the first two or three sessions of any show is crucial. In the third session, the company should break even. It usually needs five to six years to make a show profitable.

Bauma China was an exception, having made a profit during its second session. It has less competition in the market than, say, electronics shows.

"We are not interested in short-term profit. There are some organizers who only hold shows. Some listed companies move in very quickly, invest a lot, and they move out as quickly as they moved in if the show is not profitable. Our company is developing long-term partnerships in a sustainable way," he said.

Another contributor to Messe Munchen's success was seeking domestic partners. "There is not any country where we went to organize shows without national partners," said Dittrich.

But the crucial thing, Dittrich said, is being innovative. Since China is at the leading edge in terms of online communication－far ahead of Germany, for example－the company introduced an online "match-making" system for Bauma China 2014 so that exhibitors and visitors could easily find the information or partners they needed.

The company is also looking for new topics that are not yet in its portfolio, such as music, etc.

And it is looking for new sites for its shows. It would like to be more active in western China. Chongqing, for example, has 28 million habitants and also modern venues. For Germans, the city is offers good prospects.

"Our goal is to be very innovative, which means we need to adjust the concept constantly, to pick up new trends and to create new services for customers, which gives us a lot of faith in the market," he said.