Green shoots in Asia?

UFI Info, the e-newsletter of UFI, the global association of the exhibition industry, has just published an opinion piece by BSG founder Paul Woodward talking about early signs of recovery in Asia's trade fair industry:

I will be really interested to see the results of round
two of UFI’s barometer research. If I were a betting
man (which I am not), I’d place a decent wager on the
general mood being better than when UFI first carried
out this research early in the year.

Yes, the economic news is still quite mixed and au-
gust organisations such as the IMF are warning us
that things may be even worse than they feared.
Worthy journals like the Economist are cautioning us
against being too excited by the 'green shoots' which
people are reporting.

I am not an economist. But every business person I'm
talking to right now is seeing those green shoots.
They accept that 2009 won’t be a great year, but it is
now looking, in Asia at least, as though it just might
not be as bad as they had feared.

There are some encouraging signs emerging. After a
series of very disturbing reports about motor shows
around the world, for example, Auto Shanghai (an
UFI Approved Event) reported numbers up on all
measures and attracted huge international attention.
This is partly because China's car market is now big-
ger than that of the US. Porsche used the event to
launch a car for the first time outside Germany or the
US. The CEOs of many of the world's car companies
were there. For those of us in the trade fair business,
we were not surprised to see that the car industry
chose an exhibition as it tried to restart its economic
engines.

In Hong Kong, the large Spring sourcing shows
have been better than expected. The January
fairs were relatively quiet, but the early April
events, to the surprise of some, were bigger
and, for at least some of the events, visitor num-
bers were up by 10%. Although some of the
other big sourcing fairs in the region were still
struggling to attract visitors in the usual num-
bers, factory owners in South China are report-
ing that orders are beginning to pick back up.
The buyers clearly need good quality trade fairs
to locate next season’s products.

In Asia at least, the general economic news is
looking up. Just last week, two respected banks
(there are still a few) upgraded their forecasts
for China. They are now expecting 7.5 to 8%
GDP growth this year. Korea just reported first
quarter growth, albeit very slim growth, when all
had expected recession. Taiwan’s March ex-
ports were down, but much less than the pundits
had been expecting.

The good news for UFI members is that the fairs
supporting these mini revivals which are doing
best are those which lead their field. There is a
clear flight to quality and events which are new
or number 3 or 4 in their field continue to strug-
gle. UFI Approved Events by definition are well-
established and are usually the leaders in their
field. Now, more than ever, the UFI Approved
Events are proving their worth in this difficult, but
not impossible market.

BSG manages the Asia/Pacific office of UFI.

BSG issues report on crisis and B2B in Asia

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

ABM quotes BSG on Asia

ABM, the Global Association of Business Information Companies (née American Business Media) has published some thoughts on Asia and the crisis from BSG's Paul Woodward in its Global Industry Insights e-newsletter. We say:

Given the number of resumés arriving in Hong Kong from the US, it would appear that there is some optimism that Asia can provide some reprieve from the worst of the downturn. The truth is more mixed. Research Business Strategies Group (BSG) has been preparing suggests that, while the region has certainly not escaped the downturn, there are some bright spots.

In the same edition, Neal Vitale of 1105 Media talks about China. he says:

In the January edition of ABM's Global Industry Insights, Tom Gorman of Fortune China noted that China will offer "solid, if slower, growth for well-managed media businesses with strong brands." At 1105 Media, we couldn't agree more.

ABM is gearing up for what it is calling its first Global B2B Day during its spring meeting at Amelia Island in Florida in early May.

The impact of recession

BSG Principal Paul Woodward is quoted today in Telecom Asia piece about the impact of the economic slowdown on conferences and other business events:

Paul Woodward, Asia-Pacific manager of exhibitions industry group UFI, said economic downturns usually hit smaller and niche events the hardest.

“What we normally see during a crisis is that big, major events hold up reasonably well. That applies across most sectors,” he said.

“People tend to pull their marketing and travel budgets from smaller events that are a bit more marginal.”

He said events in Asian consumer businesses, such as toys and consumer electronics, looked to be feeling the biggest impact of the recession.

Projecting resilience

BSG CEO Paul Woodward is quoted in this article on the impact of the economic crisis on the MICE industry. The basic theme is that "conventions and exhibitions in the region will weather the global financial storm, despite a drop in delegate attendance". Corporate meetings and incentive travel are expected to be hit harder.

Woodward is quoted as saying "We can safely assume that the third and fourth quarters of this year will be pretty weak compared to previous years, as companies cut back on international travel in the face of future uncertainty. There are mixed reports coming from the major trade fairs under way now. Some are reporting flat visitor figures while others are conceding a 15-20 per cent reduction in international participation. The expectation is certainly that participation in Asian events from North America and Europe will be lower.”