Dragons and Stars
Björn Kempe says the Chinese Dragon is breathing out some heady fumes to ignite future exhibition business potential
n ancient mythology dragons and stars always had an important role in driving humans in the correct direction .
In the 21st century dragons and stars have a very different meaning : While the US and certain other world powers are aiming at stars like Mars , the People ’ s Congress in China recently reported a very strong GDP performance for the country on top of some of China ’ s strongest export growth rates for January and February in PRC history .
Beijing proclaims that this century will belong to the Chinese Dream . A dragon that has built its nest well and is ready to spread wings over the world is an analogy that springs to mind following the results of this year ’ s People ’ s Congress .
Some might perceive that in a negative light , but I see it as realism : China had one of the strictest sets of Covid-19 measures in the world and basically quarantined the entire country . That gave the country the opportunity to avoid on and off lockdowns like we have seen elsewhere in the world .
Now vaccines are being rolled out and China will soon not only overcome the virus crisis but accelerate its growth out of the pandemic .
Tradeshows have been running physically in China since June 2020 and few events were cancelled . Many international organisers are thankful to their PRC businesses because for many they have rescued their 2020 balance sheets .
The recent announcement of Nexus putting in € 280m to GL Events China is big news . It shows that private equity strongly believes in this market , but also that a public listed company in Europe can establish new powerhouses in new geographies .
Within a few years GL Events China has become a € 500m company . One might argue the business model has yet to be proven ; indeed there are risks , but the opportunities for GL are great . Currently China offers great deals for expansion and never before has M & A been easier . Multiples are reasonable and growth for 2022 and 2023 is almost certain . What better time to enter the market ?
Another big player is MEORIENT , a public listed company in China that was famous for its overseas shows in the Middle East and Africa . Now it has become of the most highly capitalised and valued exhibition companies on the Mainland .
Booking schedules for the huge new Shenzhen World facility seem healthy already and the rush to South China continues .
Companies like Reed , Informa , Tarsus , Comexposium and other US
Björn Kempe , CEO ExposAsia
and Italian companies are expanding operations in the Chinese market .
However , while the Dragon ’ s Nest may be pregnant with potential , the stars in Europe ’ s MICE firmament seem to be falling .
MCH Switzerland has turned from a multimillion-dollar business and successful tradeshow organiser , including Art Basel , into a private investment house where the future of these brands could be uncertain .
Many German organisers have still not been able to conduct their business again and could be set to lose over 60 % of their annual revenues for a second year .
UK organisers are getting ready to serve their markets again soon , not least because of the amazing speed of the government ’ s vaccination programme , which could lead to shows returning in June 2021 .
Overall , event business seems to be slowly moving eastwards with more opportunities in the Middle East , China and ASEAN countries , although European companies face strong competition there from Asian counterparts such as Temasek , GL China / Nexus and MEORIENT .
On top of the private equity companies , we will likely see more state-owned companies from China playing an increasingly important role internationally , including the likes of CCPIT , CMEC and Lensheng Group .
With all the fresh capital being injected into global exhibition companies , the Top 10 should be ready to play their board games again and China will likely be one of the first battlegrounds where we can expect more M & A and collaborations .
Once the skies clear completely , I expect the ASEAN region to grow again fast and more international companies to enter the region .
So , where to place your bets ? Will it be on the dragon blazing a fiery path forward , or the shooting stars from the West lighting up the exhibition sky ?
www . exhibitionworld . co . uk Issue 2 2021 35