China's growth curve

There's no question China is the dominant nation as far as the CEI industry is concerned. However, size rather than sophistication has been the main reason, so far. While the country has been making huge strides in everything from space flight to global economic clout, the fact remains that China is still a maturing market. It's precisely this reason that has everyone in the industry desperate to get a slice of the market. Its outbound potential is huge. The Amway China mega-incentives, often more than 10,000-strong, that have visited Australia recently and that will be in Singapore this month are only the tip of the iceberg. With the country's economy opening up and adopting Western-style motivational programmes and reward schemes, the incentives business worldwide is clamouring for these massive waves of Chinese corporate groups. Overseas travel is a huge aspirational target — only four per cent of Chinese citizens have ever gone abroad. The World Bank estimates that by 2010 there will be 70 million outbound trips by mainland citizens and by 2020, there will be 100 million outbound trips. Travel growth According to American Express, business travel will grow five-fold by 2020. Conference and incentive travel will undoubtedly account for a lucrative slice of that market. As more Chinese managers rise in seniority through the ranks of multinational firms and as mainland-based firms extend their operations overseas, a new market for meetings and conferences is being established. Trade fairs and exhibitions are also seeing growth in the number of Chinese participants both as buyers and exhibitors. The Canton Fair, a biannual export commodities fair, is already one of the largest events of its kind in the world. Recent immigration changes approved in Taipei have been designed to ease the paths of mainland Chinese visiting trade shows in Taiwan, despite the ups and downs of crossstrait politics. Yet, for the CEI sector, as in so many other ways, China is still a developing country. This is a fact sometimes easily forgotten when concentrating simply on the speed of transformation of this giant and the corporate events sector is no different. The role of business events to raise brand profile will become more important. Which Chinese-owned brand has the international profile of Sony or Samsung? That will surely change and it will be corporate events of all kinds that will help develop that recognition among traders and consumers. International groups International hotel groups are eyeing up expansion opportunities to cater for the burgeoning domestic market, growing inbound demand and, in the longer term, to build their brand recognition among Chinese for the expected outbound explosion in the next few years. Accor's hotel network, for example, is set to double in size from the current 24 hotels to 50 hotels by the end of 2007, including more than 20 Sofitel hotels and resorts. During 2005 Accor opened Sofitel hotels in Xian and Xiamen, and the Sofitel Zhongshan Golf Resort Nanjing. Accor CEO of Greater China, Brian Deeson, says the CEI sector is a crucial market segment for the new hotels. Large events Preparations for the Beijing Olympic Games in 2008 and for the Shanghai Expo 2010 will ensure the world focuses on China. As our figures show, so far these two cities still account for the lion's share of buyer interest. Shanghai (54 per cent) was slightly ahead of Beijing (47 per cent) when buyers were asked if they were considering Chinese destinations for any kind of CEI event in the next three-year period. The cluster of southern cities in Guangdong province — Guangzhou, Shenzhen, Zhuhai and Dongguan — was named by 13.37 per cent of respondents. Yunnan's capital Kunming (10.16 per cent) and Sichuan's chief city Chengdu (8.56 per cent) polled surprisingly well, higher even than the tropical resort island of Hainan (6.95 per cent) among buyers. The most exciting aspect of China as a CEI destination is that there still remains any number of lesser-known cities and provinces that are still relatively untouched by the events sector. Monitoring the progress of China's events industry as it grows both in size and maturity will be one of our crucial tasks here at CEI Asia Pacific for years to come.