THE MICE INDUSTRY - CANTON FAIR – THEN AND NOW NIRANJAN GIDWANI.

 

I made my first visit to the famous Canton Fair in 1991. 

Since then, until the most recent one, it was my 32nd visit, including both the spring and the autumn versions. Incidentally, this was the 136th version of the Canton Fair. Which means that, if one were to take two versions each year, the Canton has been in existence for 68 years.

Interestingly, I have also made the same number of 32 visits/participations at our very own Gitex in Dubai. This was the 44th version of Gitex.

According to reports, this year’s Canton Fair attracted 250,000 foreign visitors. The fair runs in three phases, starting from October 15th till November 4th. Electronic and home appliances feature from Oct 15th until 19th. Over 30,000 companies are exhibiting this year. This year, the exhibition covers an area of 1.55 million square meters (almost 16 million square feet) with 55 different sections. 

However, one could feel a significant decline in buyers from Western countries, typically USA, Europe as well as Japan and Korea. One could clearly see more people from belt and road initiative countries such as Russia, Iran as well as the middle-east, africa and India. As per reports, 76 percent of potential buyers were from Belt and Road countries and 13 percent from the middle east. 

According to some of my long-time Chinese friends, big and quality buyers have been generally missing, giving way to more and more extremely price-conscious buyers who have limited buying capacity. The focus clearly seemed to be on price. A lot of exhibitors were talking about getting small and fragmented orders as opposed to large orders.

Earlier, one had to pay a one-time registration fee for the badge, which was valid for a certain number of years. Now, entry to foreign visitors is free. 

This year, there clearly seemed to be a heightened interest in drones. Another area which was attracting interest was energy storage. From last year to this year, prices of energy storage materials, including solar panels and batteries have dropped by 70-80 percent. With the possible uncertainty surrounding geo-political conflicts around the world, one got the feeling that people from developing nations wanted to stock up on energy storage F

It appears that for the “Factory of the world”, attracting the present profile of buyers may not meet their export goals. A personal perception is that, with such a large stimulus package and printing of more Chinese currency, it seems fair to say that at some stage the yuan to dollar rate may need to correct. Prudent large buyers would probably wait to see where the currency heads, along with the outcome of the upcoming US election.

The top tier Chinese electronics, mobiles and appliances brands are doing well, and one of the newer bright spots in China’s export sector has been electric vehicles. With the US, and now the EU increasing tariffs, this sector could see a different direction. Additionally, in order to avoid high tariffs, large Chinese brands and manufacturers have speeded up the process of putting up assembly plants in various parts of the world.

Now, in department stores across the world, one gets to see more goods of various kinds having tags which mention made in India, Vietnam, Indonesia or Malaysia. Even in apparel, there is a growing visibility of Indian style attire. 

Once a strong “De-China supply chain” is slowly but surely established, it may not be easy to dismantle. New supply chains take a couple of years to be put in place. It seems quite visible that this is happening.

Here are some major takeaways from the visit

-If Canton Fair has to be studied like a case study of a company by itself, it looks obvious that this company will need to re-invent itself.

-While Canton Fair of this year was in its 136th version, one has strong reason and conviction to believe that Dubai’s Gitex is clawing its way up the ladder in the events segment, and with its aim and ambition to become bigger and better, it could, at some stage start eating into the market share of other events of a similar kind.

-With the “Make in India” juggernaut starting to roll faster, India will definitely need to look at a true equivalent of the international status “Canton Fair” to attract premium global visitors in a similar type of setting, and with similar end-to-end amenities, facilities and experience. India could also tie up with its sister smart city Dubai and allow Dubai to present large Indian manufacturers in a specially created section, and re-look at the manufacturer/brand/trader mix in Dubai’s bigger and larger versions. 

-When the ratio of visitors from developing or less developed nations is higher, event organizers would need to look at their food and refreshment offerings across the days of the events, together with more affordable pricing. 

-Major events must necessarily tweak their calendars to ensure dates do not clash with other major events. 

Long back in time, Europe was the centre of a lot of key global events. This axis slowly shifted to the US and then to China. I personally feel it is a matter of time when a large chunk of this segment would shift to our region, with UAE, Saudi and India poised to play a key role.