Exhibition World Issue 1 — 2020 | Page 43

Asia Comment Back to basics in Asia’s Rat race 4. Björn Kempe asks whether the new cycle for the Chinese zodiac could mean a new cycle for the MICE industry? s our Chinese friends have been welcoming in the Year of Rat, let us remember that the rat was the first animal that followed the emperor’s task to reach the finish line, ahead of the ox and other animals. Continuing the sporting theme: 2020 is also an Olympic year, with the Summer Olympics to be celebrated in Tokyo. On the political and economic front, an initial trade agreement between the USA and China has been signed, but it remains to be seen whether it will bring relief to the ongoing trade and tariff tensions. Geopolitical tension is not likely to decrease this year, either in Asia or in the rest of the world, and that is not to take into account further exacerbation of travel to and from China as a result of the (fast) developing coronavirus. The other ‘crisis’ unfolding in many parts of Asia is connected to pollution, especially in India, Indonesia, Thailand and China, where pollution levels are reaching new highs. Without setting out to be too pessimistic, I think it’s important to take a realistic view on our industry and what may be in store. Much vaunted in Western Europe and the US, digitalisation is not really the priority in Asian MICE circles, as many companies struggle with declining visitor numbers, increasing prices and ever sharper international competition. I would instead highlight market pressures and a back to basics approach and suggest the focus will be this year on what is, in fact, w w w.exhibitionworld.co.uk measurable in our region: We have never seen as many family companies selling their businesses. Currently, I believe at least 80% of Thai, Malaysian, Vietnamese and Indian business owners are either actively selling their exhibition businesses or are intending to do so. With a new government coming to power in Indonesia, I expect the selling cycle to hit there only by end of this year. India saw a raft of M&A transactions in 2019, with Messe Frankfurt and Reed acquiring stationery, gift, packaging and textile shows. Indian business owners have also realised that there is much more potential in the country and the new venues in Delhi are getting ready for international organisers. ASEAN has become a new growth market. With top notch venues such ICE, MITEC, BITEC, IMPACT, etc, the exhibition industry in the region is well prepared for growth. Newly opened offices in 5. 1 . 2. 3. Singapore by Deutsche Messe, Messe Munich, and other Messe operators likely to follow suit soon, is all evidence that international players are realising the opportunities. International consolidation will continue and private equity owned companies or stock listed exhibition companies should continue a strong expansion path. Informa Markets has gathered a very strong team in Asia to drive aggressive M&A in India, ASEAN and China. Tarsus has recently acquired the Tyre series in Singapore - proof that they have the appetite for market expansion in the ASEAN region and China. I also foresee Comexposium, Reed and Blackstone-owned Clarion will announce bigger acquisitions in Asia within the first two quarters. In the second row, I see companies like VNU, Montgomery Asia, Messe Berlin, Fiera Milano, IEG Italy, Fiera Barcelona and also Questex continuing to get a good foothold in the Asian region by launching several projects. Hong Kong seems to have calmed down and hopefully the big exhibition organisers can return to their business as usual. However, some organisers like Terrapinn and Messe Berlin have moved shows away, so it will take some work for Hong Kong to fully regain its position for MICE in Asia. Singapore could see some consolidation of local organisers after Singexpo begins to divest some shows. Singapore should see a shift from mega expos to more highly focussed and niche events, as well as the confex style of business. I believe that all organisers in Asia will have a fruitful Year of the Rat, but that those that will succeed best of all will be the ones going back to basics and rethinking their marketing strategies to achieve a mix of good organic growth and aggressive M&A. Björn Kempe, CEO ExposAsia Issue 1 2020 43