The inaugural edition of Manch Communications’ Expo Summit Africa (ESA) set out to highlight regional growth opportunities. A well-known global cast, including many familiar faces for EW readers, enlightened attendees on the best routes to market as well as potential pitfalls of organising events in Africa.
The event ran on 27 and 28 January 2011 in Cape Town, South Africa. It was organised by New Delhi-based Manch, who also runs Expo Summit India, and the Exhibition and Events Association of Southern Africa. Around 120 delegates attended from 13 countries.
Focusing on ‘overcoming challenges and exploring new opportunities to build profitable exhibition business’, ESA aimed to be the catalyst for the rise of the African exhibition industry.
Debbie Stanford-Kristiansen, CEO of expo@Bahrain, set the table for the rest of the conference with a presentation summing up the impact of the recession on the global economy and the MICE industry in particular, against the potential economic impact of the exhibition industry on its native country.
“Governments need to recognise and understand how much the MICE industry can bring to an economy. Singapore is an excellent model of proven success,” she said, adding that Singapore recognised the industry as potentially contributing 35 per cent of all tourism receipts, and expects MICE revenues to grow to $10.5bn in 2015. To this end, the government of Singapore allotted $2bn in funding to develop the tourism and MICE industries.
UFI’s Paul Woodward took the association angle, highlighting industry associations that organise the exhibitions for their respective sectors as well as associations for exhibition organisers nationally and internationally.
According to Woodward, associations enable the sharing of knowledge and resources. UFI’s Global Barometer is an example of this, giving industry members the world over an astronaut’s-eye-view of the market’s progression.
For example, data shows Africa and the Middle East companies claim higher increased turnover year-on-year than any other region. This is the first time the Middle East/Africa region has been ahead since the second half of 2009.
Although the international market is waking up to the potential of Africa, there are still substantial reasons for organisers to be reluctant. According to Montgomery Worldwide chairman Sandy Angus, these include fluctuating currencies, corruption, visa difficulties, lack of local capital, lack of infrastructure, high crime, existing monopolies and unsuitable demographics – high unemployment, overpopulation and low average age.
However, there are routes to market and once you’re there you may as well do it properly. Outlining tactics for maximising visitor numbers at South African consumer shows, Angus recommended using outdoor advertising to appeal to the country’s high level of pedestrian traffic and putting more into your social media platform, an easy-access, low-cost form of advertising. This is especially effective in South Africa because, with a steep rise in Internet use, people are sharing a lot of information about themselves and their lives. Also, radio is still a major method of communication in South Africa, not least because people spend so much time in their cars, stuck in traffic.
Strategy for trade exhibitions does not differ from convention as much as consumer shows, but Angus did point out 27 per cent of attendees had received an invitation from the organiser and 31 per cent received one from an exhibitor, suggesting targeted marketing is an effective tool. Along with this, word of mouth accounted for around a quarter of visitors.
However, former UFI president and founder of consultancy JWC, Jochen Witt, warned that by identifying factors that encourage “the cultivation of a robust exhibition industry, it quickly becomes apparent that the prospect of industry growth varies wildly from one African nation to another”.
Conditions for a healthy exhibition industry include political stability, low corruption, high safety, good infrastructure and transportation, medium to high GDP growth and medium to high GDP per capita, to name a few.
One route to market afforded by big companies but worth considering even by smaller organisers looking to expand, is merger or acquisition. M&A specialist Steve Monnington, MD of Mayfield Media Strategies – and a regular face in EW – touted partnerships and mergers as the fastest and most effective route to growth.
Monnington placed the development of Africa on the horizon alongside Latin America, but behind the BRIC countries (Brazil, Russia, India and China) and new hot markets Turkey, Indonesia and Mexico. All of these are targets for major international organisers who feel like their major markets are levelling off.
According to Monnington, joint ventures share the risk and increase engagement with the local partner, but tend to be limited to a single show. However, these disadvantages can be avoided with a partial sale which will also encourage growth, see immediate capital value, give a competitive advantage and form a good platform to expand with other brands.
Simon Parker, group director of UBM Live, spoke about the elements to be considered when designing partnership models in the exhibition sector, as well as exit strategies. He pointed out that while UBM Live is a global company, it does less than one per cent of its business in Africa.
Almost 70 per cent, meanwhile, is split between the UK and the rest of Europe, which many believe are mature markets with limited room for growth.
Parker also warned listeners that, while it is not impossible to break into an exhibition industry in another country, it is a lot easier with the help of a local office or partnership.
A good local partner can provide in-roads that might not be otherwise available, not to mention practical knowledge of how the local market works. They will have local contacts, know-how for dealing with bureaucracy, as well as general cultural knowledge.
However, Parker pointed out a few red flags that tend to turn up all too often when doing business in this region. Ugly surprises when acquiring a business include unclear ownership structures, off-book payments to government, press and venues, issues of non-compliance with tax law, and lack of merger and acquisition experience.
“It’s one view of how to develop your business. It worked for us, but not without a great deal of hard work and some pain,” said Parker, leaving spectators wondering if the next few years could see a growth in UBM’s African presence.
Africa is not yet a big player on the international exhibition scene. But as major international organisers race to establish footholds in emerging markets and out-guess each other as to the next big economy, the continent remains a tantalising prospect for large and small alike.
