Liu Dake: Transformation, Upgrading, and Future Choices of Convention and Exhibition Industry

Liu Dake: Transformation, Upgrading, and Future Choices of Convention and Exhibition Industry

Convention and Exhibition Industry faces "Value Remodeling" under the impact of the epidemic and development of e-commerce. The exhibition was a "trade platform", and maybe in the future it should be an "industry show". In terms of the operation concept, it will pay more attention to the traffic and content and will pay more attention to the integration of market, creativity, communication, and resources.

The exhibition industry is at a critical moment of transformation and upgrading

Why is said that the exhibition industry has reached a critical moment of transformation and upgrading? On the one hand, the COVID-19 epidemic which has been lasting 2 years has led to the destruction of the exhibition industry chain, which has brought obvious "rigid losses" to the convention and exhibition industry. On the other hand, as a productive service industry, the basic function of exhibition activities is to build a trading platform between the supply and demand sides. Although the real economy has also been very difficult since the outbreak of the epidemic, the decline of the real economy is far less than that of the convention and exhibition industry. Here comes the "potential threat" because part of enterprises has been started leaving the convention and exhibition platform to find new trade routes. When the epidemic is over, whether these real economies need to rely on the platform of the exhibition industry to operate will be a very challenging topic.

In fact, from the perspective of our country's foreign trade development in the past two years, this logic has been verified to a certain extent. Relevant research data shows that since 2020, our country's overseas exhibitions have declined by at least about 80%, but foreign trade has experienced rapid growth for two consecutive years in 2020. This means that although outreach has suffered an unprecedented shock, the impact of this shock on foreign trade is not as big as imagined. In the era before the Internet, the importance of outreach to foreign trade is beyond doubt, but in today's increasingly mature Internet trade, the extent to which foreign trade will depend on outreach is also a topic worthy of discussion. 

In addition, our country's social and economic situation has undergone great changes. In the early days of reform and opening-up in the 1980s, the principal contradiction in our country was the contradiction between material shortages and backward social production, and the main problem we faced was poverty, so we put forward a development concept that focus on economic development. But today's situation has changed a lot. Our country has become the world's second-largest economy, and the size of the economy has undergone fundamental changes. In this context, the social contradictions in our country have also evolved from the "contradiction between the people's growing material and cultural needs and backward social production" to "a conflict between unbalanced and inadequate development on the one side and the people’s ever-growing desire for a better life on the other." So, what is the good life? Although different people have different understandings of this, I think the connotation of the good life is very rich, and wealth is only one of the elements. In the process of pursuing a better life, people will definitely evolve from general material consumption to high-class mental consumption. What impact will this change have on the convention and exhibition industry? This is also a topic that requires in-depth study.

It is because of the influence of these factors that I think China's convention and exhibition industry has reached a critical moment of transformation and upgrading. So, what is the direction of the transformation and upgrading of the convention and exhibition industry? In my opinion, one is to keep up with the development pace of information technology and reshape the value of exhibitions; the other is to break through the economic and trade functions of the convention and exhibition industry and seek new development space.

The Value Remodeling of Exhibitions under the Internet Background

Why do exhibitions exist? From the perspective of traditional theory, I think it is mainly because exhibitions have two irreplaceable advantages: one is that exhibitions help to gather a large amount of supply and demand information, thus solving the problem of "information asymmetry" in transactions. And the second advantage is it effectively reduces transaction costs. Popularly speaking, companies that produce goods are all over the world, and they want to find buyers, while those who purchase products want to find their favorite products. In the era before the Internet, both parties hoped to have an efficient matching platform, so the exhibition appeared. However, you will find that the business logic of the Internet era has changed a lot. For example, e-commerce platforms, which also gather a large number of commodities and manufacturing enterprises, also attract a large number of buyers. Their business logic is almost the same as that of traditional exhibitions, and the amount and breadth of information gathered by e-commerce platforms are better than exhibitions, and they are no less than exhibitions in solving trade efficiency problems.

Under this background, we must reflect on a question, will electronic trade have an impact on the traditional exhibition industry? Does the value of exhibitions need to be reshaped? The answer is obvious. Under the circumstance that the value of the exhibition is challenged by Internet trade, the exhibition can only have a better development space in the future if it seeks a new value fulcrum through value remodeling. So, how to reshape the value of exhibitions?

First of all, in the past we said that the exhibition is a "trade platform", maybe in the future the exhibition should be an "industry show". In this "industry show", every exhibitor and enterprise has their own demands. Some companies show off their brand, strength, and technology, while others learn technology, design, and market. Of course, many people follow the traditional path to find customers and orders. In addition, many people will come here for nothing more than eye-opening, learning knowledge, and having fun. Secondly, if the exhibition develops from the traditional trade platform function to such an "industry show", it will lead to great changes in the organization and operation concept of the entire exhibition. For example, in the past, when we matched deals, we focused on recruiting exhibitors, inviting visitors, and connecting supply and demand. However, if we use the exhibition as an "industry show", we need to attract more traffic and need to pay more attention to the content of the exhibition and focus on marketing promotion, so as to attract more people to pay attention to and participate in the exhibition. Correspondingly, the profit way of the exhibition will also undergo great changes. In the past, when we held exhibitions, we were more concerned with the relationship between exhibitors and buyers and sorted out profitable projects, including booth fees, advertising fees, sponsorship fees, etc., but once we consider the elements of content and traffic, at this time, we must consider the game between content and traffic and monetization. At this time, we should not only pay attention to booth fees, advertising fees, and sponsorship fees but also fees for tickets, business travel, membership, consultation, etc. which should be important revenue projects in the future. Finally, the core competitiveness and expansion path of the exhibition will also undergo corresponding changes. In the past, when we talked about the core competitiveness of exhibitions, we would put more emphasis on resources, connections, communication skills, etc., but in the future, when we pay more attention to traffic and the concept of "industry show", we will pay more attention to the market, creativity, communication, and integration of resources. In the past, most exhibitions adopted the method of "off-site copying and plane expansion". In the future, the exhibition may adopt a method of multi-integration and three-dimensional expansion. This multi-dimensional integration and three-dimensional expansion are manifested in the integration of online and offline, the expansion of exhibitions to the industrial end, the integration between organizers and service providers, and so on. In other words, it is to realize the business flow of people flow and the capitalization of data.

Breaking through economic and trade functions to seek new space for the convention and exhibition industry

In addition to reshaping the value of exhibitions, what are the breakthrough directions for the transformation and upgrading of the convention and exhibition industry? In my opinion, breaking through the economic and trade functions of the convention and exhibition industry may also open up many new ideas and spaces. The reason why China's convention and exhibition industry has formed an exhibition-led development pattern in the past is largely related to China's macro social and economic background. In the early days of reform and opening-up, our country insisted on making economic development the central task. As a very efficient economic and trade promotion platform, exhibitions were closely linked with the destiny of the country and played an important role in promoting economic development, and exhibitions also developed well. Today, while we pay attention to the speed of economic construction, we also pay great attention to the quality of economic development and the coordinated development of the economy and culture. Under such a new pattern, those of us who are engaged in the convention and exhibition industry also need to keep pace with the times. If it is still limited to the traditional value positioning of service economy and trade, it may become a conceptual obstacle in future development. In fact, in recent years, the reason why many exhibition activities have been greatly developed is that they have broken through the economic and trade functions to seek some new development space. For example, when General Secretary Xi Jinping summed up the value of the SCO Summit in Qingdao in 2018, he put forward a very famous saying - "run a meeting well and invigorate a city". People in the industry are very familiar with this sentence, but one thing that needs to be emphasized is that President Xi used the word "invigorate" instead of saying "run a meeting well and build a ‘rich’ city". Why? According to my understanding, the value of the exhibition industry has far exceeded the scope of economics and trade. Through the summit, the city's popularity can be improved, the city's governance level can be improved, and the city's cohesion and influence can be improved, thus laying a solid foundation for the city's healthy and sustainable development.

In recent years, our country has also systematically deployed a large number of exhibition activities with strategic value. For example, in the economic and trade field, there are China International Import Expo, China Import and Export Fair, China International Fair for Trade in Services, etc. In terms of countries and regions, China has organized the China-ASEAN Expo, China-Eurasia Expo, China-Arab States Expo, and a series of expositions aimed at promoting regional cooperation. Besides, our country has also hosted a large number of international high-end forums, such as the G20 Hangzhou Summit. Obviously, these exhibition activities organized by countries have gone far beyond the general economic and trade functions, and have played a very important role in making China's voice, proposing China's plans, and enhancing national influence.

Author: Liu Dake

Dean of School of Economics, Beijing International Studies University

Dake Liu, Ph.D. in Economics from Nankai University, post-doctoral fellow at Peking University, visiting scholar and professor at the University of Queensland, Australia. He is currently the dean of the School of Economics of Beijing International Studies University, the director of the Convention and Exhibition Research Center, a member of the school's academic committee, a young and middle-aged backbone teacher in Beijing-administered colleges and universities, and a Beijing-level candidate for the New Century Hundred Thousand Talents Project. He is one of the early pioneers of exhibition education and exhibition research in my country.