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- Specialised Committee of CCI of Russia Discussed Investment Opportunities of Exhibitions
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In the Chamber of Commerce and Industry of the Russian Federation, the CCI of Russia’s Committee for Exhibitions, Fairs and Congress Activities (EFC Committee) held the meeting “New Approaches to Organisation of Exhibitions and Congresses. Capabilities of Strengthening the Investment Component of Business Events” chaired by Alexey Vyalkin, the Committee Chairman and Director General of EXPOCENTRE AO.
The Committee experts and invited speakers discussed new industry technologies, and improvement of services and products provided by organisers to event participants.
Speakers pointed out that COVID-19 restrictions have led to changes in business strategies of many companies and transformation of communications, including the appearance of new formats of exhibitions, fairs, and congress events. At the same time, experts have no doubt that digital communications cannot fully replace live communication, especially when it is about establishing business contacts and searching for partners and investors.
A potential development vector is working with participants and target groups of investors for more efficient presentation of goods, services, and business models at exhibitions or forums.
The meeting participants were greeted by Maxim Fateev, Vice-President of the CCI of Russia, who noted that in the current year the Committee’s work was very active. Despite the corrective amendments made due to COVID-19, more than 100 regional CCIs took part in exhibitions and congresses. It is indicative that CCI of Russia received many requests for presentations of their regions, he added.
Vladimir Kononov, Deputy of the State Duma of the Federal Assembly of the Russian Federation and Member of the Education and Science Committee, pointed out that five years ago, the CCI of Russia in collaboration with the Duma’s Education and Science Committee and EXPOCENTRE AO initiated the NTI Expo (Research, Technologies, Innovations EXPO) project intended to facilitate the promotion of high-technology products of home producers domestically and in foreign markets through active participation in exhibitions. For this year, 5 events have been planned under the NTI Expo project, of them three events had already been held.
In his speech, Alexey Vyalkin emphasised that, recently, the situation in the industry generally had been gradually improving. He said that the congress and exhibitions industry was expected to restore by 2023, largely due to offline exhibitions and supporting events.
Alexey Vyalkin cited the UFI Global Exhibition Barometer survey data that showed that the COVID-19 pandemic effects had seriously affected the exhibition industry. The respondents included more than 470 companies from 64 countries. Generally, based on the results of the last year, 51% of respondents sustained losses; in Russia, losses were reported by 63% of companies. Last year, the world average revenues of exhibition companies were 28% as against 2019, in Russia – 37%. In 2021, the situation has slightly improved: 48% and 53%, respectively, as against 2019.
“The figures show that the industry is looking for ways out of the crisis and uses new standards and formats, including non-exhibition mechanisms”, Mr. Vyalkin emphasised. Accordingly, the investment component of business events becomes an urgent question for us, he added.
Mr. Vyalkin mentioned the National Rating of Investment Climate in constituent territories of the Russian Federation developed by the Agency for Strategic Initiatives and CCI. “The congress and exhibition industry also has its benchmarks”, he stressed, “first of all, the rating of event potential of the Russian regions prepared by R&C Exhibition Research Centre. The question that interested us was whether the two ratings overlapped. We compared the leaders of the two ratings and found that the top 30 regions in the investment rating included 17 regions from the first thirty regions in the event potential rating”.
In Mr. Vyalkin’s opinion, the overlapping of the ratings is determined by, but not limited to, the degree of development of regional economies. However, in both cases one of the key factors is the infrastructure development.
According to Mr. Vyalkin, the development of specialised congress and exhibition facilities in Russian regions will open new scope for investment. Also, to develop investments through the congress and exhibition tools, the quality of services provided to participants by event organisers are of prime importance.
“Evidently, our industry faces specific challenges”, said Alexey Vyalkin. “Organisers have to bear in mind the current restrictions on holding events. Nevertheless, their task is to demonstrate consumers and all stakeholders that we have a solution and are prepared to give exhibitors much more ample opportunities to present their products and services”.
The numbers and qualitative composition of visitors are the key factors that affect the profitability of investment in participation in B2B exhibitions, Alexey Vyalkin believes. He cited official statistics on EXPOCENTRE’s events to demonstrate the exhibition environment efficiency for investing. For instance, in the first six months of 2021, EXPOCENTRE Fairgrounds hosted 14 own B2B exhibitions attended by 4,025 exhibitor companies from 58 countries and more than 156,000 visitors. The total net exhibition space was 98,660 m2. The qualitative composition of visitors is of special interest: 51.8% are company executives and top managers. More than 80% of visitors directly choose vendors or take part in decision making. More than one-third of visitors are a new audience and visited such exhibitions for the first time.
“To strengthen the exhibition segment by investment and economic components is of prime importance, because, today, exhibitions are no longer segmented into to b2b or b2c formats; it is a conceptually new approach – b2i (Investment)”, Alexey Vyalkin emphasised, “meaning that the participation in exhibitions would help raise real money for the development of own business”.
In his opinion, exhibitors should be recommended to present their investment and innovative projects, so that, in addition to their products or services, they would present their vision and the future development models.
Such an approach will make it possible to invite to cross-sectional events the target audience of investors who are willing to invest in such sectors.
Surely, organisers of major international sectoral exhibitions should understand and bring to participants’ notice the economic effect of participation in events for exhibitors.
Using the Metalloobrabotka 2021 exhibition as an example, Alexey Vyalkin demonstrated that the four-day exhibition may result in exhibitor’s approximate sales reaching about RUB 5,500,000 (the figure was obtained by Exhibition organisers based on official exhibition statistics by counting the average number of contacts established by a stand-assistant depending on the number of exhibitors and visitors).
A major exhibition project is always a platform for interregional and international cooperation. Considering the difficulties in cross-border movement, the role of economic relations between Russian regions will increase.
Sectoral exhibitions are points of attraction for entrepreneurs from all parts of Russia, believes the Chairman of the CCI of Russia’s EFC Committee. They are an efficient instrument to demonstrate regional investment projects and capabilities and plans of companies.
Therefore, the Committee members lay emphasis on the importance of continued efforts aimed at positioning exhibitions as platforms for promoting innovations and technologies and attracting investments in company development, Alexey Vyalkin pointed out.
Sergey Voronkov, President of the Russian Union of Exhibitions and Fairs (RUEF) and General Director of ExpoForum International, described new opportunities and threats for exhibition and congress industry. Thus, he called the trend for virtual communication a long-term trend. “The developments in our industry are nothing else but the struggle for live human communication”, Sergey Voronkov emphasised. “The major task of our sector in the current context is to preserve such live communication. The second trend is new event formats – omnichannel communications. Unlike online and hybrid events, omnichannel communications imply simultaneous communication on multiple platforms, moreover, communication on a regular basis, not only during the events.
Gennady Drozhzhin, Chairman of the Management Board of the Centre of Arts and Crafts Association and Member of the CCI of Russia’s EFC Committee, said that arts and crafts sector is in a difficult financial situation. In his opinion, an efficient way out of the crisis is the participation in exhibitions.
Darya Ostrovskaya, General Director of R&C Exhibition Research Centre and Member of the EFC Committee, described the principles for forming the event potential rating prepared by the Centre. In the top lines of the Event Potential Rating 2020 are St. Petersburg and Leningrad region, Sverdlovsk region and Republic of Tatarstan, Krasnodar Territory and Republic of Bashkortostan.
The principal users of the rating are regional authorities, regional CCIs, trade associations, regional congress bureaus, and event organisers. Darya Ostrovskaya brought to notice the correlation of general economic ratings of constituent territories of the Russian Federation with the event potential rating of regions.
Artem Kudrin, ABN-GROUP Partner, told the audience about the benefits regions gain from the development of the congress and exhibition activities, and companies’ benefits from participation in exhibitions. He believes that in the context of uncertainty and continuous changes in the terms of business, prices, logistics, etc., businesses may greatly benefit from participation in exhibition and congress events giving them the opportunity to communicate in a short period with a wide range of potential customers and promptly take decisions. In this connection, the possibility to present corporate investment projects during events such as conferences or exhibitions becomes ever more important.
Historically, exhibitions and fairs have always had a powerful commercial potential – up to 80 percent of sales were made at exhibitions and fairs, said Grigory Bunatyan, General Director of the Moscow Securities Agency and Member of the CCI of Russia’s Council for Financial, Industrial and Investment Policy. In the current context, exhibition and congress events become more informative, with priorities shifted to transfer of technologies, import substitution, and new investment opportunities.
Mr. Bunatyan believes that given different specificity of territories, capacities and level of development of regions, they all should have their own approaches to principles of investment through exhibition and congress projects.
He also turned attention to the importance of consolidation of investment packages from regional development institutions in the context of proposals for continuous participation in exhibitions.
Evgenia Manukovskaya, CEO Expomap and Event2Online, discussed the threats and opportunities for exhibition sector in the omnichannel context. According to her, threats include dilution of audience due to multitude of projects in different formats. Opportunities include improvement of market communication, digital transformation that leads to automation and simplification of many business processes, and reaching out to new audiences, in particular, due to new communication environment and online formats. “COVID-19 restrictions made us see habitual things in a new perspective”, she said. “For instance, we may observe space standardisation and, as a consequence, the narrowing of the gap between the ‘rich’ and ‘poor’ stands. Also, ever more exhibition companies offer special conditions for start-ups and innovations”.
Ivan Nikolsky, General Director of Exponic LLC and Member of the EFC Committee, focused on the necessity of uniform rules of the game for all exhibition activity actors, in order to avoid the situations where some events are disallowed practically before the opening, whereas other events are actually held without any restrictions. He also called the exhibition community to unite their efforts to solve the problem of holding events on the same theme on different sites at the same time.
Polina Shashkova, Director of the CCI of Russia’s Project and Investment Department, emphasised the important significance of promotion of investment projects of exhibition participants in collaboration with the chambers system.
In turn, Sergey Selivanov, First Deputy Director General of EXPOCENTRE AO and Deputy Chairman of the EFC Committee, proposed to continue discussion of vital sectoral issues at the 5pEXPO Forum of Exhibition Industry to be held on 18-20 October 2021at EXPOCENTRE Fairgrounds.Press Service, EXPOCENTRE AO