Home to 700 companies posting turnover of more than US $1bn, Latin America now claims to have the highest growth in foreign direct investment in the world at 40 per cent. Last year the region showed an overall GDP growth rate of four per cent. Six countries in the region grew more than five per cent and this figure is expected to increase by 2013.
Latin American expertise and connections is also being increasingly exported through the global business event industry’s leading associations. Currently the presidents of ICCA, SITE, and IAPCO are Latino, and the end of next year sees UFI appoint its first Latin American president.
But what should the region look like to global investors? Some parts we know. For example it’s frequently said that if you’re not already active in Brazil, then entering the market will feel like swimming against the tide. Earlier this year the country overtook the UK to become the world’s sixth largest economy, growing 2.7 per cent last year, according to National Institute of Economic and Social Research (NIESR), considerably more than the UK’s 0.8 per cent.
But not all organisers are bound for Brazil. And for those not brave enough to throw their hat into that ring, the region presents plenty of opportunity elsewhere. The dynamism of the economy means there is a strong likelihood of getting a return on your investment elsewhere, provided you understand the local market’s ability to deliver. There is great space for acquisitions or mergers, and improvements in the professionalism in some markets enables global organiser to gain local traction with sophisticated local counterparts.
Of course there is a need for improved training, a core objective of the region’s industry associations (see the WMF profile on page 42], and while some governments are working to provide better environments for global organisers, others need to do more to attract international events.
Exhibition market division
Ana Maria Arango, executive director of AFIDA, claims the exhibition marketplace varies greatly across the Latin American region, posing different levels of exhibition industry development and resulting in a very heterogeneous profile. There is something for every organiser and at various levels of development.
While AFIDA hopes to generate a greater understanding of the market, it’s aware that there remains a lack of clarity about information in some sources. An absence of audited figures in many Latin American markets, coupled with what it calls ’regional culture’ can lead to data being disorganised and to lack the transparency most organisers require.
The association claims there is a clear division between one group of countries where there is a more developed exhibition market, and another where the exhibition market, at least in international terms, is still emerging.
Markets with a developing exhibition market include Ecuador, Chile and Peru, while the emerging exhibition markets are Uruguay, Paraguay, Bolivia, Venezuela and Central America.
“It is important to note that the market for fairs and events in the region is booming and developing considerably,” claims Arango. “This generates constant movement, allowing gaps to be closed and improving environmental conditions. It is also important to note that you can not generalise about the quality, entrepreneurship and professionalism of the different market players within each country and think that all the players in the first group of most developed countries have developed the same level of professional maturity, on the same grounds of performance.
The same applies to the different players in the industry, although they belong to a group of developing and emerging markets, they are each different in the way they position within their markets, and they are all active.
Brazil-based Reed Exhibitions Alcantara Machado leads the global insurgence with 40 events in 2012. It is followed by Grupo Cipa – Fiera Milano on 39, again based in Brazil, and Colombia’s Corferias on 35. Mexico’s Expo Convenciones ran 12 events, as did UBM Brazil.
Markets with a more developed exhibition industry
Argentina, Brazil, Mexico and Colombia.
Key Features
- Infrastructure in line with international standards
- Presence of more international fair organisers
- Exhibition industry developed and recognised, by government, by guilds and economic leaders
- Exhibition organisers recognised and strong Government policies create incentives for the industry and promote the competitiveness of cities
- National exhibition association existence strong and decisive.
Developing and emerging markets
Chile, Ecuador and Peru, Uruguay, Paraguay, Bolivia, Venezuela, Central America.
Key Features
- Infrastructure inadequate or venues obsolete
- Exhibition industry requires business models to support its growth and development
- Local fair organisers usually compete within the same industry and fragment the market
- Specialised fairs fewer than in other markets
- Increased presence of consumer fairs
- Low or moderate relevant support from governments and industry sector leaders
- Absence or low number of strong fair sssociations.
Getting the infrastructure in place
For these numbers to increase, more investment needs to be made in new infrastructure, says Arango. “Some cases are more critical than others in terms of infrastructure constraints imposed on the industry’s market growth.” Giving a few examples, Arango says that Sao Paulo’s 400,000sqm Anhembi Park stages international fairs for a big country, but is without adequate air conditioning, which would improve its ability to provide optimal conditions. In general she claims the city is falling short in modernising its premises and providing infrastructure, limiting the potential for market growth.
“In Lima, while the fair market’s growth is developing with the national economy and presence of fair organisers with varying degrees of professionalism, there is no fairground that is optimal in terms of infrastructure or size,” she adds. “Fairs are often performed in tents adapted for the open spaces, exposing people to extreme or changeable weather conditions.”
Other cities such as Asunción, Montevideo and Panama, have not traditionally had the need for larger spaces as trade and market size has not developed markedly. But today market conditions have created interest in developing their fair business, yet there is no space for this new development.
“In Mexico there is often the opposite situation,” says Arango. “Since there are a lot of venues and convention centers throughout the country, they can have problems with occupation due to the competition and space.” However, there is a strong interest from fair organisers and local events businesses to bring foreign events to their cities in ways that help to improve occupancy rates.
Reed Exhibitions, for example recently extended its event portfolio in the Mexican market with the acquisition of Expo Nacional Ferretera, in Guadalajara. The organiser claims the acquisition brings with it more than 1,300 exhibiting companies occupying 50,000sqm and 80,000 buyers from 30 countries.
“Mexico is an attractive, long-term market for Reed Exhibitions,” said president of Reed America, Chet Burchett after the acquisition. “We are in a position to build the infrastructure necessary for developing a business platform to serve the Mexican market and help Mexican companies to expand their businesses internationally. This was the critical step to propel our plans.”
When Mexican Association of Trade Shows and Events (AMPROFEC) was created in 1988, its driving need was to deliver a major international quality exhibition centre in the capital, México City. There were great exhibition venues in Guadalajara and León, but not in the capital of the country.
“Imagine the conditions in which we were doing events,” says current AMPROFEC president Hugo Rosas. “Now we have near to 70 venues around the country with capacity, technology and service for exhibitions and meetings, most of them world class.
“During 25 years AMPROFEC has worked for promote the value, benefits, economic and social impact of exhibitions and meetings, we are happy that now our sector is recognised by the government and the private sector in our country and overseas, and we will continue working on that.”
Bringing government support and new technology to bear
Arango claims that in most of Latin America’s developed countries, with the exception of Colombia, there is strong support for the activity center and events from the central government, developing a unified policy and instituting it through the bodies appointed with encouraging the industry. Similarly, throughout the region there is evidence of local governments implementing tax policies and economic incentives to encourage the activity.
But she concedes there are cases where the opposite is true. Where internal conflicts and issues between the public and private sectors has discouraged the development of this activity. Arango draws attention to the recent case of attempted expropriation at the largest exhibition in Buenos Aires, La Rural.
“It is quite obvious that most industry players in the region are still a long way from implementing the latest technological tools in the market, those technologies easily applied and more strongly adopted in Europe, North America and Asia,” says Arango. And while there is plenty of time for mobile applications, electronic devices, RFID, virtual reality and intelligent virtual designs in Latin America’s developing markets, content management systems, CRMs, electronic management plans and even financial management and specialist software marketing solutions would all help boost the value of the region’s exhibitions.
“In Latin America it is important to understand today’s business is not selling square meters in the way it used to be a few decades ago, but rather a much richer concept where the potential invigoration of trade comes through truly efficient relationships between visitors and exhibitors, not only during the show but through permanent interaction platforms, offering business opportunities throughout the year.
Latin America is a promising region for the industry, a product of its economic development and the cautious handling of economic policies in recent years. These conditions mean the market now demands the involvement of interested multinationals and subsequently requires the strong influence of cultural factors, public institutions and business for the development of the exhibition industry is taken into account.
However the market requires partnership between local actors and model that work in what Arango calls Latin America’s “tropicalised” business environment. While there is a marked difference between the well developed and emerging countries, all are growing at a higher rate than they did a decade ago and we shall surely see continued growth in the number of events, companies, venues and ultimately incentives for the involvement of the both trade and consumer exhibition organisers.
This was first published in Issue 3/2013 of EW. Any comments? Email exhibitionworld@mashmedia.net
