Market in numbers
The number of players is 254, of which 141 are Moscow companies. The second largest city in Russia is St. Petersburg (21 companies). In most major cities, there are no more than two to four operators.
The annual turnover of the commercial exhibitions market is $ 700 million. The accompanying economic effect is an increase in the turnover of enterprises whose activities are directly or indirectly associated with servicing exhibitors and exhibition visitors (hotels, transport companies, the food industry, etc.) by 3-4 billion dollars a year.
In total, about 45% of Russian exhibitions are held at specialized exhibition venues, the rest - in sports palaces, houses of culture, hotels, cinemas, etc.
The average annual congestion of exhibition venues is 60–70% for Moscow and St. Petersburg, 40–50% for regional exhibition centers. Summer and several winter months are considered non-season for the industry.
The market is highly fragmented, the vast majority of events - small, niche or highly specialized. Even in the Moscow region, only 36% of exhibitions are held with the participation of more than 200 exhibitors.
Sources: data from the agency "Informexpo", NNIU "Exhibition Research Center", estimates of professional market participants.
250 operators of the Russian market of commercial exhibitions account for about 700 million dollars in annual turnover.
At first glance, this business looks easy and beautiful: you buy wholesale exhibition space at 220-350 rubles per square meter per day (such, for example, is the "selling" price from high-quality exhibition centers in the capital), and then sell retail at 6– 12 thousand rubles apiece for three to four days of the event. 12-13 months of preparation, a few shock days for holding - and margin in your pocket.
Speaking about the profitability of an established exhibition event, operators usually call the level of 30–70%. Checking this data due to the closed nature of the players is difficult, so real numbers can be much more attractive.
The main struggle is for winning topics. Market participants are frantically looking for growing sectors and segments ripe for the exhibition. There is a clear link to the growth of industries, for example, construction has recently grown by 25% per year. It is only natural that the MosBuild construction exhibition has become the largest in the country.
On every such promising topic, sometimes a whole crowd of operators of different calibers rushes. An eloquent example: on all the same construction topics, only in the Moscow region last year 85 exhibitions were held - 15% of the total!
The multiplicity of similar exhibitions is a consequence of the multiplicity of small sites. Due to the underdeveloped infrastructure in Russia, it is customary to use non-specialized objects for exhibitions: sports palaces, stadiums, houses of culture, etc. In developed countries, where a large city usually has one, but a very large exhibition center, and people are not used to exhibits in the lobby of the cinema, such polyphony is simply impossible.
In the last two years, a tense dynamic balance has arisen in Russia in terms of the number of exhibitions: the “assortment” is updated annually by 10 percent. Moreover, less than half of the “new ones” survive to the second year. And this is a direct financial loss for the organizers. Because many players formulate the exhibition promotion cycle something like this: the first is minus, the second is zero, the third is profitable.
The happiness of small and beginner operators is to grab on to some just-hacked segment, which was not noticed by other players, or to find a new perspective on the existing topic, interesting for potential exhibitors and visitors. And here you need to be a little market analyst and visionary. At a minimum - understand the structure of the market, the relationships of players and own the terminology.
Doing an event at the origin of any market trend is profitable. On the one hand, it is difficult at the initial stage, on the other, there is a chance to grow an exhibition along with the growth of the industry.
Take, for example, the Buy Brand franchise exhibition, which the newly created exhibition operator held for the first time in 2003 .. The base for it was created as follows: managers walked the streets and looked for brands on the signs, and then checked, not a franchise whether it is. About twenty exhibitors were able to gather at the first exhibition: seven to eight franchisors who paid a mere penny for participation, the rest were friends and acquaintances and barter. All this was "spread" over an exposition of 700 square meters. m, and for the first time it looked good.
Today, after six years, the Buy Brand occupies 12 thousand square meters. m of total area with two hundred exhibitors, which made it the sixth most important franchising exhibition in the world.
The problem of the exhibition market is the interception of topics by competitors. The most painful thing is for small operators, whose well-being is sometimes based on one or two events per year. The main "offenders" here are the owners of their own exhibition space. The dictatorship of the site is especially strong in regions where there are just a few high-quality centers and operators that have been put out there. There are examples where interception simply leads to the destruction of the company’s business. The exhibition center simply does not confirm the booking of space for the next year to the operator, but announces an exhibition of similar subjects at about the same time.
The logic of the actions of the owner of the site is quite understandable. With the usual average annual occupancy of 60–70% in Moscow and 40–50% in the regions, the exhibition center brings less income than office or retail real estate. But if you also provide services for organizing exhibitions, the profitability per square meter grows three to four times. For owners of new venues, exhibition operators are the only way to expedite the return on investment, which, according to development companies, is usually 11–12 years (versus 8–9 years for office and retail real estate).
Not surprisingly, the owners of exhibition centers have a steady desire to build up their own exhibitions portfolio, primarily due to small operators. Some key regional sites have such a portfolio of 50–70%.
Although exhibitions are a product of intellectual labor, it is not possible to protect them from the attacks of competitors. The fact of registering the name of the exhibition as a service mark, of course, does not guarantee protection against interception of topics. You will not receive a certificate on the subject and concept of the exhibition.
It turns out that small operators with their exhibitions are potential victims and candidates for departure from the market? Not at all. They have a wonderful way of self-defense - it is growing into the industry or choosing a “labor-intensive” topic.
“In our market, luck smiles at specialists who are thoroughly familiar with industry issues, ” says Lyudmila Smorodova from RUEF, and immediately lists half a dozen small operators who cannot be pulled out of their favorite topics. They thoroughly settle in the niche, at the same time starting to issue industry catalogs, newsletters and even magazines, as well as organizing industry conferences.
It is noteworthy that in the long run, small operators are not afraid of consolidation in the industry. Even in the well-established western exhibition markets, “babies” have a decent use: they operate in the “laboratory” mode, which grows events for three to four years, and then sells them to large players with profit.
What exactly is included in the package when selling such intellectual property as an exhibition? The brand, the base of exhibitors, established contacts with industry players, agreements with the site - in short, the substances are quite ephemeral, which you can’t feel with your hands. The parties usually do not disclose the size of the transaction, but, according to market participants, the exhibition usually goes away for three to five annual profits. As a rule, it is a sum from several hundred thousand dollars to several million - depending on the scale of the event.
Based on an article by Dmitry Denisov
published in the journal " Business Journal " No. 23-24 of December 09, 2008.
* The article is more than 8 years old. May contain outdated data