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        Current location:Home > News> Industry Dynamics

        Canton Fair in the Eyes of “Old Fair-goers": From Turnover to a Platform for Image Display
        Source of the article:Economic Observer Online Publication time:2018-04-24

                 

        For some exhibitors, the value of Canton Fair can no longer be judged from the angle of turnover. More accurately, the value lies Canton Fair in displaying corporate image and exploring new client sources with its fame and popularity.


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        (Picture source: VeeR)

        conomic Observer Online  Reporter Li Huaqing   It was past 8 o’clock in the morning of April 19, on the way from exits of Pazhou Metro Station of Guangzhou to the exhibition hall of Canton Fair, a group of young girls keep asking passers-by “Need translator? Need translator?” while waving a piece of paper in hand. Their English proficiency is usually indicated on the paper, sometimes even Cantonese and Teochew and other related experience too. Most of these girls with language advantages come from universities and colleges in Guangzhou, and are attracted here by the numerous overseas purchasers converging on Canton Fair


        Outside the exhibition hall of Canton Fair, pedestrians and vehicles proceed in a steady stream, security personnel standing guard give directions to foreigners in English, people entering the hall from multiple entrances go through security one after another, and a team of patrolling armed police passes the open space in front of exhibition hall. And this is not even the peak time of human traffic of the Canton Fair exhibition hall. Usually, human traffic peaks two days in advance before each exhibition starts.


        April 19 is the last day of phase one of the 123rd Canton Fair. Some overseas purchasers are already roaming about the fair with suitcases within the exhibition hall. In front of the booth of Chigo Air Conditioning, after finding out the nationality of the potential purchaser, a young salesperson dexterously picks out a card from over 30 stacks of cards on the table, staples it to a booklet for the purchaser to take away, and marks the purchaser’s card before putting it way.


        “Very few clients would sign a contract right away at the Fair. We could always keep in touch with potential clients.” Li Feng, a marketing representative of the third America department of Chigo Air Conditioning told the reporter of Economic Observer Online. This is the fourth time he went to the Canton Fair. Those dispatched by Chigo Air Conditioning to its Canton Fair booth are all overseas sales personnel, some of which have already been heading back. If the potential purchaser is received by a returning salesperson, the salesperson will give his colleague’s card to the purchase for follow-up.


        The reporter of Economic Observer Online learned from many exhibitors’ personnel that, it is rare to have contract signed right away at the Canton Fair. For some exhibitors, the value of Canton Fair is not longer about turnover, but rather displaying corporate image and exploring new client sources with the fame and popularity of the Canton Fair.


        Fading of the Role of Trade

        “Bringing money to place orders and returning after the money is spent—this should be the way of doing things a decade again.” Hu Yueyong, Brand Management Director of the Overseas Business Division of VATTI told the reporter of Economic Observer Online. He is a so-called “old Fair-goer”, who has attended basically all Canton Fairs from 2003 until now. Judging from Hu Yueyong’s experience, some foreign trade orders are even concluded two years later. Unless it’s an old client or a really famous brand, orders won’t be placed after only 10 minutes of talk at the Fair.


        “Middle Eastern clients prefer to place orders at the Fair, but the market percentage of Middle East has declined.” According to Hu Yueyong, in the early years, VATTI’s products are relatively low-end, and the first overseas market it opened is the more price-sensitive Middle Eastern market. “Now take a look at our booth, the gas stoves and water heaters most loved by Middle Eastern clients are now placed in the corner.” At VATTI’s booth, the product in the most conspicuous place is kitchen ventilator. 


        Despite the rareness of orders placed at the Fair, VATTI has its own plan about the exhibition. According to the staff of VATTI on site, even though the company has already had income from oversea sales, actually the brand VATTI still lacks fame abroad, its overseas business being mostly OEM. As for the purchasers coming for consultation, VATTI will introduce to them its famous OEM brands. “If he knows what brands you manufacture for, he will know you are reliable, and have more confidence in having you manufacture for his brands.” Personnel of VATTI introduced. So far VATTI has manufactured for hundreds of OEM brands.


        VATTI is not the only one to contact licensees of other brands at the Canton Fair. Mr. Li, Brand Manager of Galanz, told the reporter of Economic Observer Online that Galanz also take OEM orders at the Canton Fair. According to his introduction, Galanz is the contract manufacturer for SUMSUNG, LG, and SIEMENS.


        As foreign trade channels increase and foreign trade becomes more convenient, the importance of Canton Fair inevitably diminishes in trade. Established in 1957, by now the Canton Fair has had a history of 61 years. There is one Canton Fair each in spring and fall every year, and now each Canton Fair is divided into three phases. Phase one is for electronics, household appliances, vehicles & spare parts, hardware & tools, chemical products, machinery, building materials, and energy. Phase two is for consumer goods, gifts, and home decorations. And phase three is for office supplies, luggage & leisure goods, food, textile & apparel, shoes, medicine, and health care products.


        The full name of Canton Fair is “China Import and Export Fair.” Actually, the Canton Fair is more focused on export trade. Before the 101th, the full name of Canton Fair used to be “The China Import and Export Fair.” At the 101th, an import exhibition area was set up and its name was changed to “Canton fair.” At the Canton Fair of this year, an import exhibition area has been set up in phase one and phase three.


        The exhibits of Canton Fair are not highly sophisticated manufactures, but categories of the largest export volume of Chinese enterprises in the early days. Therefore, the Canton Fair is also known as the “incubator of small and medium enterprises for exploring international market.” From the sixties to the seventies of the last century, the export sales of Canton Fair accounts for above 40% of the annual foreign trade, a bright moment in its history.


        The star enterprises at the Canton Fair now have more marketing platforms. “GREE attends over 20 exhibitions of varied sizes per year.” Ms. Liang, the responsible person of GREE’s booth at the Canton Fair told the reporter of Economic Observer Online. The booths of Gree Electric Appliances at Home Expo and Smart Home Exhibition are even larger in scale. Since each exhibition is targeted at different groups and regions, there is no comparability when it comes to the result of contract signing. Nevertheless, when compared to the its scale at certain exhibitions, the booth of Gree Electric Appliances at Canton Fair, in Ms. Liang’s words, “pales into insignificance by comparison.”


        According to the introduction by the Brand Manager of Galanz, Galanz just attended an exhibition in Chicago this March, and it will attend more exhibitions in Germany and Brazil this year. 


               

        Based on the data published by the official website of Canton Fair, in recent years, the turnover at Canton Fair has experienced year-over-year declines. Judging from the annual total business turnover, from 2012 to 2015, there has been a year-over-year decline for four years in a row. In 2014 it went down about 10.44% from a year earlier, while the year 2016 witnessed a year-on-year growth of 1.65%, only a slight improvement. The turnover of 2017 Fall Canton Fair is not yet updated. Judging from 2016, the spring, fall, or annual total business turnover all fall behind the data of 2011.


        Nevertheless, as an exhibition with over half a century of history, the attractiveness of Canton Fair still cannot be underestimated. According to the statistical data of Canton Fair, 191,950 purchasers reported to the 122nd (2017 Fall) Canton Fair, a growth of 3.36% compared with the 120th (2016 Fall). 196,490 purchasers reported to the 121st (2017 Spring) Canton Fair, a year-on-year growth of 5.87% compared with the 119th (2016 Spring).


        Upgrading

        For some enterprises, the Canton Fair is an exhibition that cannot be missed. Hu Yueyong told the reporter of Economic Observer Online that among all exhibitions facing overseas market, VATTI only attends the Canton Fair. “The cost is still high even if we only attend one exhibition. It costs us about 200,000-300,000 yuan just to set up the booth.” A worker at the booth of Foshan Ouyad Electronic also told the reporter that the Canton Fair is the only exhibition they attend that faces overseas market.


        From the perspective of Li Feng of Chigo Air Conditioning, his daily work is visiting clients offline and keeping in touch with clients through phone, email, and social networking software, while exhibition is where he can come into contact with new clients most easily. From the perspective of the Brand Manager of Galanz, one of the outstanding advantages of the Canton Fair is its coverage of a vast geographical range; it should be the exhibition where Chinese enterprises can come into contact with purchasers of the largest number of nationalities. 


        In the impression of Li Jianfeng, Marketing Director of Foreign Trade Department of BNN Group, the company has attended the Canton Fair for a dozen of times, but the opportunities of meeting high-quality clients at the Canton Fair are few. Li Jianfeng told the reporter of Economic Observer Online: a model of exhaust fan sold by a competitor of the same industry to the purchasers is only 2 dollars each, and this price is unbelievable. “Clients only ask about price and nobody would discuss quality with you. The lowest price is the best price.” According to his introduction, if it’s sold at the Canton Fair, the price of the same product would be reduced by about 30% compared with its retail price at store. “In your industry, how do you define the Canton Fair?” “We know it’s a place where the cheapest wins.” 


        Li Jianfeng told Economic Observer Online: adding in labor and travel costs, for BNN Group to attend the Canton Fair, the cost per minute is 37.5 yuan. However, he doesn’t think the company will stop attending the Canton Fair. “If you don’t come while the others do, clients will think less of you.” Li Jianfeng said.


        In the impression of old Fair-goers, product or enterprise’s infringement of intellectual property sometimes occur at the Fair. In the early years, when the competitors saw your products, there had been a lot of disputes. 


        Emphasis on the protection of intellectual property is one of the greatest features of the Canton Fair. Starting form 1999, a “Reception Station for Intellectual Property, Product Quality & Safety, and Trade Disputes” has been set up at the Canton Fair. At the last Canton Fair, 554 of IPR complaints were accepted, 730 exhibitors were accused, and 330 enterprises were eventually were suspected of being involved in infringement, According to its Press Center, the Canton Fair will “warn and remind” exhibitors with a record of suspected of being involved in infringement, and trade missions will also supervise and urge enterprises to conduct self-examination and correction. 


               

        In terms of encouraging Chinese enterprises to innovate, starting from 2013, the Canton Fair has established the “Canton Fair Design Awards.” The “Canton Fair Product Design and Trade Promotion Center” that has been running for 14 Canton Fairs is also aimed at broadening the international design vision of domestic export enterprises, and helping design companies at home and abroad to explore market. Appreciation has been shown of brand enterprises, which have about 12,000 booths at the 123rd Canton Fair, accounting for about 20% of the total booths.


        The role played by the Canton Fair in integrating resources is being enhanced. Starting from the 111th Canton Fair, the “Canton Fair International Market Forum” has been held on a regular basis. 50 theme forums were organized at the last Canton Fair. In addition to international forum and design innovation, topics also involve industry summit, fashion trend, technology R&D, brand marketing, regional industry recommendation, and new product release. According to its plan, this Canton Fair will continue the previous topics. Along the aisle in front of Canton Fair Exhibition Hall No.4 and No.5, service counters for overseas airline ticket, boat ticket and hotel reservation and self-service banks lined up. On the last day of phase one exhibition, long lines were formed here. Strengthening cooperation with airline and shipping companies and hotels for the convenience of overseas purchasers is one of the main work focuses of this Canton Fair.

          

        At four o’clock in the afternoon, workers gradually arrived to remove the booths, trucks shuttled back and forth at the open space in front of exhibition hall to transport cargo, and personnel of exhibitors left together after packing the exhibits. Order-related negotiations changed places. On April 23, the Canton Fair Exhibition Hall that used to be the largest exhibition hall in Asia with 1,185,000 square meters of exhibition area, will liven up again as phase-two exhibitors settle down after the withdrawal of phase-one exhibitors. 




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