PRESS RELEASE
Impact of global economic crisis on Asia’s B2B media industry: Online revenues holding up well, exhibitions and publishing weakening
Hong Kong, 30th March: Business Strategies Group (BSG), the only consultancy in Asia specialising in B2B media and events, has released a new report analysing the impact of the global economic crisis on the Asian B2B media industry.
Key players including Alibaba.com, Global Sources and CMP Asia have all weathered the economic crisis quite well so far. Alibaba.com’s 2008 revenues increased 39% year-on-year. Global Sources’ revenues came within guidance increasing by 14% and CMP Asia’s revenues jumped by 19% in 2008.
The leading companies have reacted to the economic crisis with a variety of initiatives and strategies, but there are some common themes.
There is an emphasis on new markets to generate alternative sources of growth. Both Global Sources and Alibaba.com allocated additional resources to India in 2008. Alibaba.com is also making a concerted effort to diversify its paid supplier base outside of China – including more markets in Europe.
Both Alibaba.com and Global Sources have restructured their core online offerings to create lower cost products. Global Sources has discontinued a non-core business and has focused more resources on big buyers services (i.e. Private Sourcing Events).
In a show of confidence, both Global Sources and Alibaba.com have repurchased shares. Alibaba.com has board approval to repurchase up to US$258 million worth of shares on the open market. Global Sources bought back US$50 million worth of shares through a tender offer.
Business events, primarily sourcing exhibitions, have held up well until now, but most organisers are expecting 2009 to result in a significant drop in business. Consequently, governments around the region have launched a number of initiatives and schemes to boost the sector.
The Hong Kong government earmarked HK$150 million (US$19.4 million) to promote Hong Kong’s conventions and exhibitions business overseas and is also considering significantly expanding the Hong Kong Convention and Exhibition Centre in Wan Chai. The Hong Kong Tourism Board set up a new team, “Meetings & Exhibitions Hong Kong” (MEHK), to support the industry.
Singapore has established a US$60 million fund to boost tourism including the MICE and business travel sectors. The Singapore Expo venue is undergoing a facility upgrade. The Media Development Authority in Singapore has committed US$60 million to support its media sector.
Taiwan, Korea, Thailand and Malaysia have launched comparable efforts to support their MICE industry through subsidies, promotional activities and venues expansion projects.
BSG Principal, Paul Woodward, commented, “We are anticipating a challenging, but eventful year in Asia’s B2B media industry. 2009 will undoubtedly be a down year for the exhibition business, but the impact on the B2B online sector is still an unknown. Global Sources’ 2008 online revenues increased by 24% and Alibaba.com’s by 39%, but the key question is: how will their revamped online products will hold up this year.”
This BSG report was distributed on 26th March to BSG subscribers of its Asian Business Media Tracker service. The report features over 30 pages of information and analysis covering the impact of the economic crisis on key B2B media companies including Global Sources, CMP Asia (now UBM Asia), Alibaba.com and the HKTDC as well as a detailed review of the activities of governments across Asia. The report is also available for purchase on a stand-alone basis.
For information, please contact:
Paul Woodward, Principal, Business Strategies Group Ltd.
Tel: +852 2525 6163
e-mail: paul at bsgasia.com
Distributed through Edelman on behalf of Business Strategies Group Ltd.
Marsha Ho
Edelman
Telephone: 852 2837 4705
Fax: 852 2804 1303
Email: marsha.ho at edelman.com
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3 comments:
So how did Kenfair and HKTDC perform?
Gloria: it's a bit early to say. On HKTDC, we report:
"The HKTDC anticipates that overall buyer attendance at key trade fairs will drop by between 5% and 10% in 2009, but the HKTDC expects that its HK$80 million (US$10.3 million) buyer subsidy programme will bring 10,000 buyers to its major Hong Kong trade fairs in 2009".
For Kenfair, we won't really know until the end of the year. Last year's shows were OK and their problems in Macau weren't really anything to do with the recession. But 2nd half of this year may be the toughest time, so the Mega Fair may be affected in October.
Buyer attendance of Kenfair's Mega Show Part 1 in last October dropped by around 8,000 (I don't remember the exact figure) while the number of Mega Show Part 2 jumped by 29%. I may be wrong but the big jump might be partly because the show dates filled the gap between Canton Fair part 2 and new part 3.
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