Asia Comment
China -
trap or
trail?
Björn Kempe,
CEO ExposAsia
n previous months we
have focused a lot on
South East Asia. With the
recent announcement of
Interwine by GL events, I thought it’s
a good time to focus on China in this
column.
GL events spent more than
US$150m on acquisitions in the last
12 months - a rather small stock listed
company has entered the premier
league in China and has combined
revenues of no more than more
than $20m in China. Could this be a
trap? I hope not... however, pushing
acquisitions of this size and forming
a new big player in China is definitely
not an easy endeavour.
At the time of writing, Informa
Markets had not fully integrated UBM
Sinoexpo for various reasons. We
can observe that many international
exhibition organisers are having
difficulties with their joint ventures
in China, mostly for management
reasons.
Beside GL events, other organisers
such as Deutsche Messe, Tarsus and
Blackstone Clarion have been in
the news with new joint ventures,
equity deals or joint collaborations.
Blackstone Clarion enters China with
w w w.exhibitionworld.co.uk
Design Shanghai - a Show previously
launched by Media 10.
I can see also that Comexposium,
dmg events, Messe Munich, Messe
Duesseldorf, Reed and of course
Informa Markets have big appetites in
China. Again, a trap or trail? I think it’s
a trail for the following reasons:
The Chinese government has layed
down plans for the next 10 years. If
you are reading the plans carefully
you will see which cities will develop
for which sectors.
China is moving from
manufacturing to hi-tech and the
One Road Belt policy opens many
opportunities.
We can see many small and
medium-sized exhibitions (below
40,000sqm gross) slowly disappearing
in China. Growing venue and price
competition but also consolidation
among the big organisers are the
reasons for the quick disappearance
of these shows. Many Chinese
organisers that grow their shows for
10 years and longer have realised that
one life cycle is over and the next has
come and it’s better to join hands with
an international partner than remain
alone.
With all these developments in
China there will be many winners:
the government because bigger and
better shows emerge and the ones
that didn’t perform disappear; the
international exhibition organisers
because they can extend their
portfolios into a sizeable market and
achieve good volume of profits; the
local owners who sell out at their peak
at excellent two digit multiples, and
venues, especially in South China, that
welcome migrated shows from the
North and East.
No matter how good the trail will be
leading to a bright future of Chinese
exhibition industry I must also caution
international friends that the PRC tax
system is undergoing big changes and
that some factors affecting buying
businesses are not
carefully checked.
So, it’s with all of you
to make your China
business a bright trail
and not a trap.
Issue 4 2019
33