German fairs abroad: Not without my daughter

When German fair companies go out into the big wide world, they often do so via daughter companies or joint ventures. The constellations are manifold.

Not every event that is assertively described as a “fair abroad” on the agenda of some German fair companies, really is just that. German group presences are frequently also described as a kind of trade show – mostly marked by an asterisk. In the small print further below you then find out what it really is. For this year the Association of the German Trade Fair Industry AUMA lists 315 “true” German fairs abroad with German organisers as major stakeholders. However, the size of their stake may vary considerably. Two-thirds of all events take place in China, Russia, India, Turkey and the USA. In total, AUMA and FAMA members are planning foreign trade shows in over 35 countries.

How the companies implement trade show projects depends on the situation of the industry and the respective market. Messe Berlin, which is rather reticent when it comes to organising fairs abroad, founded a joint venture in the middle of the last decade for the Asian spin-off of Fruit Logistica: Global Produce Events. The Berliners hold a stake of 70 per cent. The remaining shares are held by UK-based Fruitnet, a competent partner for event organisation, media and Asia. In contrast, Messe Berlin organises the travel show ITB Asia in Singapore via a wholly owned, eponymous subsidiary (www.messe-berlin.de).

In the past German fair companies often founded such daughter companies themselves. In part, this was a shy response to the sceptical stance of municipal owners towards foreign activities in the past. They believed that trade shows in the Far East would hardly help win votes in the German elections. But this careful approach to venturing abroad has long turned into a more pro-active strategy. And nowadays public German fair companies often take a chequebook on their travels. At the start of the millennium Messe Frankfurt purchased the fair company Epoc in Dubai as a subsidiary. In doing so, the Frankfurters entered new terrain with the acquisition of safety & security trade fair Intersec. This added a new facet to their so-called “brand name strategy”. This was the first time Messe Frankfurt ventured into foreign markets with a topic for which there was no domestic event. Now, the Frankfurters stage an entire range of security fairs world-wide – and they have ramped up their event agenda with further acquisitions (www.messefrankfurt.com).

NürnbergMesse also gained access to a new market by purchasing a daughter company. This was back in 2009, when NürnbergMesse bought what is now its Brazilian subsidiary, whose events are compatible with the fair’s domestic agenda. Nielsen Business Media was renamed NürnbergMesse Brasil. The fair organiser followed a different approach in India, where a subsidiary was founded in 2013. The trade fairs and exhibitions manager at the German Foreign Chamber of Commerce was appointed as its managing director. The Nurembergers had already been cooperating with her on the Indian market (www.nuernbergmesse.de).

The “Trade Fairs Abroad” programme of the German economics ministry especially helps small and medium-sized enterprises take part in group stands at fairs abroad on favourable terms. These participations under the “Trade Fairs Abroad” scheme of the German economics ministry are an important pillar of promoting German exports. This was the outcome of a recent survey by the market research institute TNS Emnid, published by AUMA. Exhibitors of the “Trade Fairs Abroad” programme were interviewed in 2012 and 2013. Approx. 87 per cent of the participating companies were able to boost or secure exports thanks to the scheme. Small and medium-sized enterprises generated total export sales of 5.4 billion euros in 2013 thanks to their participation in foreign fairs with support from the German government. The study also shows that exports account for 56 per cent of total sales of the participating companies – a much larger share than that achieved by German exhibitors who are not supported by the programme. According to a survey, exports account for 31 per cent of sales on average of German exhibitors. The export markets of the interviewed exhibitors are more or less identical to the regional focus areas of the “Trade Fairs Abroad” scheme. Most of the new markets targeted by the participants are in the BRIC countries. To access these markets 81 per cent want to use trade fairs as a marketing tool. And 83 per cent of all interviewed firms are small or medium-sized enterprises with less than 500 employees. On average, an exhibitor takes part in 2.25 group participations a year (www.auma.de).