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March 21, 2012

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SNIEC continues to attract global events

SHANGHAI has come a long way in the MICE industry in just two decades. And while Shanghai New International Expo Center helps attract international events, industry experts say much needs to be done to create a global MICE center, writes Lu Nengneng.

Shanghai's MICE (meetings, incentives, conferences and exhibitions) industry is growing and future growth is anticipated in the coming years. Shanghai New International Expo Center (SNIEC), which broke ground 13 years ago in the Pudong New Area, is a witness to how the industry has changed in a little more than a decade.

Back in the 1980s, the MICE industry was still at a nascent stage in Shanghai, where less than 20 fairs were hosted each year by a meager number of venues and companies.

It was not until the 1990s, when multinational companies came in droves to establish a presence in the city that the potential for MICE business was unlocked. The exhibition and conference market grew 20 percent annually at that time and eventually gave birth to SNIEC, which opened in 2001 and is now the city's landmark exhibition center.

"SNIEC has been considered as a window for China's international exchange in the MICE industry," said Dong Hanyou, general manager of SNIEC.

The venue attracts more than 4 million business people from home and abroad to over 80 exhibitions each year. It will have 200,000 square meters of indoor show space and 100,000 square meters outdoors after the newly finished pavilions are opened.

The completion of SNIEC's building is expected to push Shanghai further toward becoming an international MICE hub, Dong said.

It is good news not only for China's MICE community, but also for Shanghai's economy, which has been searching for new growth areas since its well-worn engines are slowing down.

The strategic importance of the MICE industry to the city has caught the eye of China's central government, which brought the China Exposition Project to the Hongqiao business area late last year. The project to build one of the largest exhibition venues in the world has a budget of 23 billion yuan (US$3.63 billion). It will be more of a friend than a rival to SNIEC.

The exhibition complex, which will have 400,000 square meters of indoor show space for domestic and international trade shows, is expected to replace Germany-based Hanover Exhibition Center as the world's largest venue.

Golden opportunity

Though SNIEC is losing its advantage in exhibition scale, it is facing a golden opportunity to cultivate its segmented market, industry observers said.

As the China Exposition Project is mainly designed for government-led exhibitions and conferences, SNIEC can stay focused on international and industrial trade fairs, from which it has gained a great deal of experience. The coordination between the two will definitely take Shanghai's MICE industry to the next stage, but the industry needs improvements in both infrastructure and services.

Zhou Yupeng, chairman of the Shanghai Services Federation, said China still lags behind developed countries in event-planning expertise.

Industry experts said the exposition pavilion is usually not big enough and the layout is scattered; different venues host similar exhibitions with overlapping angles; and the service fees they charge are sometimes non-standard and unregulated.

Besides, more supporting infrastructure is needed, such as hotels nearby. SNIEC has built two five-star hotels nearby to provide conference venues for exhibitors.

Though all the improvements cannot be achieved without professionals, the talent pool is still at a formative stage in Shanghai.

What MICE needs is all-around professionals, experienced in administration, fluent in foreign languages and specialized in services for certain industries while most of its current workers are from various backgrounds with inadequate training.

But this may just be one obstacle that needs to be removed before Shanghai's MICE industry evolves to the next level.

Zhang Zhigang, head of the China General Chamber of Commerce, said a city needs a highly advanced transportation network, and a services industry contributing more to its GDP than manufacturing to become an international MICE hub. He added that a heavy reliance on international trade and an extensive network of intermediary agents will also help a city boost its MICE prospects.

Judging from the standards above, Shanghai still has a lot to improve. And it is even facing new competition from the Internet, where booming e-commerce has changed the landscape of global trade.

Shanghai is not alone in dealing with these challenges as the whole MICE industry in China is trying to break through the bottleneck.

"The MICE economy in China is still smaller than in the US, Germany, Britain, France and Australia, and its contribution to China's GDP is less than 0.08 percent, which means China's MICE industry still has a long way to go in industrialization and marketization," said Luo Baihui, guest researcher at the China International Economic Development Research Center.

He pointed out that most exhibitions China hosts are small and medium-sized projects, and the revenues they generate are not enough to make the country an industrial capital of the world. Besides, the exhibition area in China, though among the biggest globally, has lower lease rates than in developed countries.


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