Strength in numbers

German exhibition bosses have a common vision: A single platform in the Internet for all trade fairs, companies and products. All very well: But who is going to provide that platform?

German trade fair organisers are closing ranks - at least in the Internet. With the productpilot of Messe Frankfurt and the expodatabase of m+a Verlag, two organisations have launched portals that are intended to provide a combined platform for finding and presenting products and companies. The Frankfurt-based m+a Verlag has already successfully wooed Messe Berlin and the private trade fair organiser Hinte of Karlsruhe, and Messe Frankfurt is hoping to win over Koelnmesse and Messe Düsseldorf.
Back in the 1990s, Messe Frankfurt's then managing director, Raimund Hosch, experimented with a trade fair in the Internet. He set his aims high. "messe21" would be more than a communications portal, this was also to be where the company would buy and sell. Hosch's vision was a sort of eBay for traders. Perhaps just a little too ambitious, the project failed soon after in 1998. As we all know, Hosch has since realised his idea in slightly altered form as the boss of Messe Berlin and successfully incorporated it into the "Virtual Marketplace" (cf. m+a report 6/2004).
Klaus Reinke still thinks "messe21" was groundbreaking but, says the boss of Messe Frankfurt Medien und Service GmbH, "the time was not right". Frankfurt's concept today draws on those early ideas with the one difference: Transactions are not possible. "That is not where our competence lies", says Reinke. He is interested in providing a service which has the same basic function as a trade fair in the offline world: to bring together manufacturers and traders. Productpilot is primarily a product and exhibitor search facility: If a trader is looking for pots, cups or cutlery, he is automatically directed in the database to the profiles of the companies that manufacture these products.
Whereas in productpilot the searcher is directed to a stored profile, in expodatabase the user is taken via the server of the trade fair organiser. expodatabase is governed by the principle: to the product via the trade fair. A clear advantage, Dorit Vogel-Seib, editor-in-chief of databases at m+a Verlag, maintains. "Data protection and copyright are thus guaranteed."
An integrated trade fair search means that interested trade visitors can look for more than just products and companies. "Exhibitors can also research where their competitors are represented", says Vogel-Seib. "We provide an independent tool for targeted trade fair queries." After all, searching for a suitable trade show is no longer a trivial matter: "Nowadays companies search all over the world for new platforms for their products."
The trade show search function has also convinced Marcus Eibach, head of corporate development, new trade fairs and services at Deutsche Messe AG, Hanover. If a flatscreen manufacturer is looking for the right fair for its product, expodatabase will draw its attention to CeBIT. "It's a wonderful selection criterion", praises Eibach, but emphasises that the portal must be given more publicity.
Though full of good words for the trade show search function, he is critical of the product search as part of a mega portal. "The universal search machine is Google. All other activity happens in community forums. And here you always need a thematic restriction that members will find useful. Such a criterion could be trade fair brands like CeBIT or Hanover Fair, Eibach suggests." That is why he removed the product portal of the Hanover Fair called "Globis" in the late 90s and decentralised product search to the homepages of the individual fairs.
Others are convinced that big is beautiful. Their theory: The more products in the database, the larger the selection and the more attractive the marketplace is for the traders. The success of eBay, the marketplace that is aimed at consumers, also works on this principle. It is not a foregone conclusion that the benefactors of the largest B2B platform will be in Germany. That is why Messe Frankfurt boss Michael von Zitzewitz is chiefly aiming to take on the established virtual markets of Asia, for example, Globalsources.com and Alibaba.com, with his productpilot.
Only last August American Internet company Yahoo paid four billion dollars for a 40 % share in the Chinese B2B platform Alibaba. What clearer indication could there be of the importance of the new Internet marketplaces? In Frankfurt, they seem to have realised that only by joining forces can they hope to put up a challenge to this emerging giant.
Originally, Messe Frankfurt never intended to approach other trade fairs. "It was the response from the market that gave us the idea", says Reinke. Nothing has been signed yet, but the supervisory board meetings are not due until October and November of this year. That leaves us enough time before next January to forge a new company comprising several trade fairs for the pilot project.
But who knows, structural change might one day actually spoil business for the trade fairs. After all, the Internet platforms bring together buyers and purchasers - and that's what trade fairs do, too. Even von Zitzewitz is cautious: "Purchasers and procurement experts all around the world in all sectors are increasingly turning to the Internet in their day-to-day work." This is due to the shorter product cycles and faster purchasing processes in globalised markets.
But Alibaba sees itself not as a competitor but as a partner for established trade fairs. Porter Erisman, Vice President, International Marketing and Business Development at Alibaba.com in Hong Kong, is now doing business with Hong Kong based exhibitions organiser Kenfair International. The co-operation covers the consumer product fair Kenfair Mega Show that takes place every October. Erisman develops e-mail campaigns and integrates online advertising for the trade show on his homepage. "The co-operation is focused on targeting purchasers; but we also find exhibitors for other trade shows." Erisman has already concluded three more trade fair partnerships due to be announced shortly, he reveals to m+a-report.
Of course, Alibaba also benefits from this co-operation: The company is the chief media sponsor of the Mega Show where it appears with a central stand. But Alibaba is not only in evidence at the trade shows of its co-operation partner. Erisman also took Alibaba to consumer trade fair Tendence Lifestyle in Frankfurt this August with its own stand. That is how he publicises his online marketplace to those who do not yet conduct their business on the Internet. Erisman's strategy: to turn offliners into onliners.
So it's natural for Erismann to be thinking of deals with other trade fairs: "We are very much interested in collaborating with a German trade fair organiser both in Germany and in China." But he has no plans to organise his own trade fair. "We believe that trade fair organisers and Internet marketplaces develop best when they can concentrate on their core business." There may be several similarities between the business models but there are huge differences in actual business practice. Erisman explains that it is virtually impossible for an online marketplace to develop a successful trade fair. A company can successfully develop one area, but not both."
Merle A. Hinrichs, chairman of the board of management at Global Sources, will no doubt disagree. His company is firmly routed in a multi-channel strategy: Global Sources annually provides information on 1.4 million products and 130,000 suppliers in ten online marketplaces, monthly magazines, in over 90 sourcing reports and at 14 trade fairs. With this structure he can offer his customers a service as only few of his competitors can: communicating product information on all possible channels.
But not all platforms are equally well developed. A glance at the 2005 balance sheet shows that the company has grown large with Internet-based solutions. Last year Hinrichs generated 48 % of turnover with online media, 38 % with magazines and only 13 % with trade fairs. He generated no less than 90 % of turnover with Chinese companies.
Global Sources launched its trade fair business only a few years ago, first of all in Shanghai, this year saw the launch of its six "China Sourcing Fairs" in Hong Kong. In June of next year Hinrichs launches his "China Sourcing Fair: Gifts & Home Products" in Dubai. The "China Sourcing Fair: Gifts & Home Products" is the largest fair in China: According to the company, the first of the series this spring in Hong Kong attracted more than 30,000 purchasers from around 140 countries. And at the autumn fair, again 4000 exhibitors are expected to show on the 70,000-m2 floor space of the AsiaWorld-Expo Center. The time is well chosen: Visitors from abroad can visit "China Sourcing" (October 19 to 22), the "Hong Kong Gifts and Premium Fair" (October 20 to 23) and the "Canton Fair" (October 25 to 30) on a single trip.
All these trade fairs cover similar terrain: gifts, kitchen, tableware and household products and small electrical appliances. There are therefore big overlaps with the large consumer fairs staged by Messe Frankfurt who we all know also wants to firmly establish its brands abroad, particularly in Asia. So it comes as no surprise that Messe Frankfurt, in particular, is countering with its own Internet solution. Currently, Global Sources claims to have just over half a million active purchasers in its databases. m+a's Dorit Vogel-Seib is relaxed about the threat from the Far East: "None of us will succeed in becoming the portal in China. That's not a business the Chinese will ever part with." Markus Ridder

m+a report Nr.6 / 2006 vom 22.09.2006
m+a report vom 22. September 2006