Hong Kong’s position as a leading destination for international exhibitions has been threatened for some time now by China’s emerging stature in the marketplace.
Today, major development in the Pearl River Delta (PRD) means the area immediately surrounding Hong Kong will soon be transformed in terms of infrastructure, connectivity and opportunity for organisers looking to break into the Chinese and Asian marketplace.
While Hong Kong has been growing at around 2.3 per cent in the past few years, it makes little sense to speak it in isolation. Its position at the heart of the PRD has always been its raison d’etre and the region as a whole, which includes Macau, has been growing by around six and a half per cent.
The region is evolving from a production base to a market. People on the Chinese mainland are now flocking to the area to spend their money, which brings benefit to the region and presents a new exhibition proposition to organisers not previously dependent on local visitors.
This of course also means there are associated problems with exploding numbers as people travel from the mainland looking to capitalise on this boom, but it is hoped the region’s economic performance will dictate political policy and carefully manage the flow of an expanding population, already estimated to be around 65 million.
Hong Kong is a true heavyweight among exhibition destinations not just in Asia but the world, fed by the large number of passengers and freight that pass through its various transport terminals.
For example, even before the upcoming runway expansion in Hong Kong, the level of passengers and cargo it handles is 50 per cent more than the second largest in the world by some estimates. Around 145 million passengers and 6.5 million tons of cargo enter the airport each year, while its shipping container port is the fourth busiest in the world.
Consider the region as a while, including these container facilities in Hong Kong, Shenzen and Guangzhou, and this grows to twice the size of Shanghai or Singapore, according to Hong Kong’s Trade Development Council (HKTDC).
The infrastructure being built between Hong Kong, Macau and the rest of the Delta includes a high-speed railway, a new bridge between Macau and Hong Kong to open in 2017, and this will be accompanied by connectivity of a different kind, high-speed telecoms and other supporting infrastructure developments.
Director of research at HKTDC, Nicholas Kwan, speaking at the recent UFI Asia Open Seminar, said the PRD must be considered as a whole. “Historically and politically we have a boundary between the places, but in terms of trade and commerce, people are working very close to each other,” he comments.
In terms of the threat to Hong Kong’s exhibitions, Kwan says the region will transform from a sourcing centre to destination with a reputation for marketing exhibitions.
“People don’t just come here to buy. You see more and more companies come here to try to sell, as we have a market here. In terms of growth it’s more interesting,” he says.
“It’s not just B2B, but B2C because of the connections. It’s no longer a local market, or even a regional market. Its international. An economy of this size, both in terms of output as well as demand, will have an impact on the rest of the world.”
Underlining this is the fact that of all the HKTDC’s 35 annual tradeshows, more than half its exhibitors, as well as our buyers, are international. Good news for venues and hotels in Hong Kong.
“The Bohemia Foundation estimates that by 2038 the GDP [of the PRD] will exceed New York, Tokyo and London, at US$5.5 trillion,” says Allen Ha, CEO of Hong Kong venue AsiaWorld-Expo. “What we’re looking at is no longer a number of standalone regions.
The government’s five-year plan is to look at the industries and the people and ask how does it take this metropolis and turn this into one of the top economies in the world.”
“Don’t look at the venue or the destination itself, you look at the whole marketplace. If you look at the whole metropolis there are different pockets. We should look at collaborating but also at our different positioning. Hong Kong is still very strong at the high-end where prople converge for information exchange.”
Of course the more we are connected, the more threats there are as well as opportunities. Hong Kong is one of several choices in the area, and the choice between staging events here, in Macau or on the Chinese mainland will improve as connectivity and new venue choice does.
“You can’t stop competition but so long as the region is growing, the cake is growing as a whole and there is bound to be business around,” says Kwan. “It’s everyone’s own challenge to look at where you can differentiate from the others.”
Monica Lee-Müller, MD of Hong Kong Convention and Exhibition Centre (HKCEC), says that in her 20 years of experience on Hong Kong’s exhibition scene she’s seen a change from industrial exhibitions to sourcing fairs, and now into branding events.
“I think we’re in very fortunate position in recent years, and we are becoming more and more upmarket,” she comments. “We cannot just provide space, our tenancies are back-to-back and we’re not getting any new space. So we’re not competing on those terms.
“There’s an abundance of space within just a few hours reach in China, so I think the opportunity for us here is very much in creating an experience and finding innovative ways for people to meet; the total experience and quality. Otherwise we’ll lose our competitiveness,” she adds.
“At the moment Hong Kong still has an edge,” says Kwan. “Particularly in high-end business, thanks to our rules and regulations, as well as a supporting infrastructures. The economy has evolved. This place is changing from a factory to a market. Ask where are the consumers? Where can you connect them? The kind of demand from these services is different. Nowadays you can’t just run an exhibition by providing a space, you have to provide a lot of other services, pre- and post-event and all throughout.”
These are the areas everybody will be focusing on, as Hong Kong fights to stay ahead.
