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| Asia's trade fair capital powers into top gear ( 01/08/2005 ) | |||||||||
The city is set to reap the rewards after building an unchallenged niche as the ideal venue for Western buyers to meet Chinese manufacturers, say exhibition industry executives. "Hong Kong has benefited from its position, its international links, its ease of setting up companies, its laws and its low or no tax environment. And it's a fun and safe place to be," says Michael Duck, senior vice-president of trade fair organiser CMP Asia. "Over the past 10 years growth has been tremendous. I can remember when they held exhibitions here in car parks." These days, of course, there is the prestigious Hong Kong Convention and Exhibition Centre (HKCEC) in Wan Chai, where demand for space has been so great that the government recently gave its blessing to a HK$1.3 billion (US$167 million) extension. The extension should come on stream in 2009, adding 19,400 square metres to the city's signature building. Solid forward bookings
Industry insiders see the new capacity as vital to maintaining Hong Kong's position as the leading centre in Asia. "With Cepa (the Closer Economic Partnership Arrangement) and the opening up of the mainland market following China's accession to WTO, all sources point to a burgeoning demand for international trade exhibitions," says Allen Ha, deputy CEO of AsiaWorld-Expo. "Hong Kong will continue to play its key role as an international city and the most international city in China. People are using Hong Kong as a gateway to China and the world." The two exhibition centres in Hong Kong are expected to complement each other as the city maintains its competitive edge. AsiaWorld-Expo at the airport "will be great for attracting new shows, especially in heavy goods," says Peter Woo, chairman of the Trade Development Council (TDC) which organises shows at the HKCEC. "The TDC's megashows, on the other hand, are for light consumer products which are Hong Kong's core export business." More space, new opportunities The extra space will open up new opportunities in the industry, adds Paul Woodward, regional manager of UFI, the global association for the exhibition industry. "We will see the emergence of new types of consumer exhibitions as well as multi-dimensional 'high content' events for new technology industries," he said. "Hong Kong's core strength and speciality, however, will remain the very large merchandise sourcing shows and we expect to see continued growth in these as new venue space comes available." The number of visitors attending exhibitions is set to jump further after reaching 3.6 million in 2004, a 29 per cent rise over the 2.8 million two years earlier, according to the Hong Kong Exhibition and Convention Industry Association (HKECIA). Exhibitions stands in Hong Kong pulled in HK$1.4 billion (US$180 million) in rental revenues with 45 per cent of the money coming from outside Hong Kong. While China and Japan recorded higher trade fair revenues than Hong Kong last year through sheer volume, Hong Kong was the clear winner in terms of the amount of revenue it was able to achieve per show, according to UFI data. That indicates participants are prepared to pay a premium to attend the city's high quality events. All eyes on China Hong Kong is benefiting from China's rise as the manufacturing centre for the world built on the mainland's production efficiency and army of cheap labour. "Every volume buyer in the world these days has to look to China. That's where the best products are made for the best prices and that trend will only continue and accelerate," says Sarah Benecke, a director of Nasdaq-listed Global Sources, which facilitates trade through its web sites, magazines and by organising trade fairs. "We are just at the beginning and the industry is growing tremendously," adds Ms Benecke, whose company will be hosting shows for electronics and components, fashion accessions and gifts and home products at AsiaWorld-Expo next year. Hong Kong's critical mass as a trade fair centre means that manufacturers are happy to make the trip from elsewhere in China to showcase their wares. "A lot of Chinese companies are reaching out to the world by participating in the trade exhibitions in Hong Kong because they can meet the buyers from around the world," said AsiaWorld-Expo's Mr Ha. Mainland visitors soar The number of mainlanders coming to Hong Kong for trade fairs has jumped from 49,000 in 2000 to nearly 129,000 last year, according to the HKECIA. "They see a much more international audience at events in Hong Kong," said UFI's Mr Woodward. "They like the quality of the fairs and the quality of the audience. Buyers also like the fact that a mainland company which is able to organise itself to participate in a Hong Kong fair is, effectively, self-selected as being from the 'top tier'." The city's efforts to protect intellectual property rights are another important reason for its success in attracting trade shows, he adds. Beeline for Hong Kong Hong Kong has traditionally been positioned as a centre for regional exhibitions, while other venues in Asia have hosted country-specific fairs, said Mr Duck. But China's ability to suck up manufacturing contracts from other Asian countries as well as from the West has altered the dynamics of trade show industry, with manufacturers elsewhere in Asia increasingly making a beeline for the city. "They want to meet quality buyers and follow them to Hong Kong," says Ms Benecke, pointing out that Hong Kong gives visa free access to 170 countries. A second leg of additional demand is coming from China's growing internal market. "The common perception of Hong Kong as the place for Western buyers to meet up with manufacturers is now not a full reflection of what is going on," Mr Duck said. "China has become a significant market for imports, with Hong Kong again the common ground. "In some cases, the sellers may have agricultural products or chemicals from around the world and are selling them into China. Or they may be buyers sourcing apparel in China for export. Whether it is going in or coming out, Hong Kong is a traders' paradise." Related Links | |||||||||
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