Asia Comment
Asian Black Swan clouds
our horizons
Björn Kempe offers a view from Southeast Asia
on the curse of coronavirus
hrough my office in
Shanghai and activities
in Asia, I was alerted as
early as January that
something immense and disruptive
was brewing. The extension of the
Chinese New Year holidays confirmed
my fear that this was only the
beginning of a global outbreak of a
new virus.
Tradeshow organisers were quickly
forced to cancel or postpone shows
in China. Subsequent travel bans,
quarantine measures and many other
government-related policies made it
impossible to continue business as
usual.
Writing now in the last third of
March, the virus has affected most of
the world.
Thanks to strict quarantine
measures the virus appears to
be peaking in China, at least with
the numbers of those recovered
outnumbering the newly infected.
However Europe, the Middle East,
Africa and the Americas are being
severely affected and the virus is
surely far from peaking globally.
I wonder whether most Western
nations should question whether their
governments did the right thing at the
right time?
While European nations were
looking at Asia and thinking ‘thank
God it’s in the East’, nobody much
thought in January or February to
prepare properly for what has come
in March.
Beside unprepared populations
and governments, can we as the MICE
industry say we’ve been prepared? I
don’t think we can.
In Europe the first big show to be
cancelled was Mobile World Congress
in Barcelona, despite there not being
w w w.exhibitionworld.co.uk
any confirmed cases of Covid-19 there
at that time.
That was quickly
followed by the
Frankfurt Lighting Fair,
ITB in Berlin, the
Leipzig Bookfair,
several famous
shows in Duesseldorf
(Prowine, Beauty etc)
and many others
across a swathe
of countries.
Shows were
cancelled days before opening.
Reasonable? Not in my eyes. Again,
it was the politicians deciding what
MICE industry players had to do
and not the industry itself.
A ‘Black Swan’ is a phenomenon
on stock markets that describes
unforeseen events that impact
heavily on bull markets. We had ten
wonderful years but, yes, Covid-19 is
the Black Swan with stock markets
crashing significantly in recent weeks.
Emerald Exhibitions’ stock price is
one example, losing around 65% of its
value in the month to 14 March and
many other public listed exhibition
companies’ stock prices tumbling.
M&A activities
Many family companies and small
organisers have realised how
quick their annual results can be
affected. I foresee a very active Q3/4
for M&A globally - USA and Asia
ahead of Europe and I expect a few
consolidation deals among the Top 20
organisers.
The Covid-19 crisis has meant many
Chinese companies have suddenly
found themselves alone in the
market and no longer looking out for
international partners.
Björn Kempe,
CEO ExposAsia
M&A activities within Q2/3
from the likes of Reed, Tarsus and
Comexposium can not be excluded.
Informa seems to have slowed down
on M&A in the region, but is still
consolidating its businesses in China
and around Asia.
The German Messe companies
had been looking more keenly at the
ASEAN market - taking a lead
with Thailand, Vietnam and
Indonesia.
Recently Deutsche Messe
opened a regional office in
Singapore and Messe
Munich, Nuremberg Messe
and Frankfurt had all been
actively expanding their
brands in the ASEAN
market.
However, because
the coronavirus hit Asia first,
these Messes will also need
to look after their Chinese and
Indian businesses before getting
back on track for M&A.
We can also observe an increased
interest in the Indian market and
many of the Indian companies are
open to offers. Overall, we see roughly
US$50m EBITA assets in the ASEAN,
Indian and Chinese market up for sale
this year and we believe that Vietnam,
India, China and Indonesia will see
some good deals in Q3/2020.
Covid-19 will not be the last virus
that threatens humanity and our
MICE industry. We could have been
prepared for this, and must learn
what we can do for the future in these
times.
I congratulate all exhibition
organisers who pushed through their
shows in difficult times and there are
many examples in Thailand, Australia,
Singapore and Europe.
Business will go on and Covid-19
shows how important the health of
our exhibitors and visitors is and how
quickly our industry can be turned
upside down. Therefore, we need to go
back to basics and engage more with
our exhibitors and visitors in good and
in bad times.
I wish you all well.
Issue 2 2020
35