Insights From Suppliers

Will Offline Exhibitions be Replaced by Digital Ones

Will Offline Exhibitions be Replaced by Digital Ones
Since the outbreak of novel corona virus in 2020, it has spread quickly to over 200 countries and regions around the world. Up till now, the global confirmed case has reached up to over 50,000,000, and death toll has been more than 1,250,000. Influenced by the pandemic and "social distancing" policy in nations worldwide, almost every exhibition, a typical example with intensive labor, has come to a standstill.

In "the impact of new age exhibition industry on export trade", as a service industry in commodities circulation, exhibition industry has been a vital driving force in boosting the economy and it has a profound impact on world trade. So far the suspension of exhibition has brought serious damage to world trade because of the outbreak, and some exhibition companies are facing problems of downsizing, close-down, etc.

Some renowned exhibition enterprises like Reed Exhibitions, Informa around the world are having a stab at holding digital exhibitions since March. So far, hundreds of shows have been held online, and some governments are responding actively to cooperate with companies in exploring new modes of arranging shows online. Among all shows is the most typical one "China Import and Export Commodities Fair", which started in 1957, and has been held online Since June 2020. Reed Exhibitions and Informa Markets have launched tens of digital exhibitions. By the end of October, over 20 online shows have been held by Alibaba.

There is no doubt that all kind of internet innovations over the past decade have largely been promoting the economic growth, and it contributes to the success of many world- renowned enterprises, such as Alibaba, Byte Dance, Tencent, which was definitely an unexpected result for the tradition companies in the past decades. Thanks to the revolution, China has become a fertile environment for internet innovations, where new internet technologies and firms have emerged in an endless stream. Facing the pandemic, emerging technologies such as internet, artificial intelligence (AI), and big date have played an essential role in containing the virus. However, it can’t be ignored that internet innovation has been hyped up to a giant bubble. According some statistics, the average life span of internet companies is around 3-5 years, and it has been shrinking. As an innovative mode, will online exhibitions overturn the traditional trade pattern lasting thousands of years? Or will it end up transient like any other internet innovations? I’d like to have an discussion from the following aspects.

Historically speaking, exhibitions, the traditional trade pattern have lasted thousands of years, and it is bound to proceed. Chinese temple fairs and European fairs are directly related to it. It is said that the trade form can be traced back to China’s primitive society and the ancient Roman period. In modern times , the “great geographical discoveries” and the industrial revolution literally gave birth to modern exhibition industry, and exhibitions broke the original regional and national restrictions. A number of large-scale international exhibitions and exhibition cities have emerged, such as Frankfurt, Paris, London, Leipzig and so on. Especially in modern times, as international trade becomes more and more active, each country takes the exhibition industry as a specialized industry for development, a large number of pavilions built by many developed countries and regions. It is generally believed that the exhibition, an emerging service industry, is one of the world's three "smokeless industries", and can be seen as a barometer of regional economic development. It has created a large number of jobs, promoted the development of regional economy, and boosted the prosperity of trade.

Because of natural social attribute human beings possess, the exhibition is a social place designed for commercial trade. Fair trade is different from simple consumer goods business, and often goods traded at the exhibition are with qualities of non-standardization, long period of delivery, large quantity and so on. Buyers usually inspect suppliers systematically from all aspects, including the supplier's design level, production capacity, delivery capacity, etc. More importantly, it is the trust between two parties that matters, so the cost is high in this process. These characteristics determine that buyers and sellers often need to get to know each other by meeting face-to face and build trust, which is also the main purpose of attending an exhibition. If online exhibitions rely too much on internet technology and neglect the relationship between people, focusing on trade matching but ignoring the establishment of trust system between buyers and sellers, they will fail to achieve their purpose eventually.

Another unique nature human beings have is to understand through listening, to observe through watching, to feel through touching. The information is woven together in human's brain to form cognition of things. So far, there is no artificial intelligence technology or other technologies being able to replace the complicated process. Because of its time and geographical restrictions, displaying online merely, I believe, is not enough at all to make purchasing decisions for lack of specific perception of product performance in the real scene.

When we look back, it has been nearly twenty years since the internet trade developed. The rise of internet platforms such as Alibaba, to some extent, has offered a brand new communication channel for producers and buyers, which improves communication efficiency. The business model has made great contributions to export of Chinese goods. But even so, so far, there has been no sign indicating that there is no need for the existence of exhibitions offline despite the development of Alibaba. And according to some relevant data, as the total world trade is increasing, exhibition area is also increasing constantly. With the continuous rise of e-commerce, the exhibition area of each country is also mounting. The main reason is self-evident, and we are able to find the answer from above.

In addition, when we promote an emerging technology, we often have to take the development state and supporting facilities of the region where the technology is used into consideration. Due to cultural differences, regional economic development differences, and the uneven development of network level between regions, the development of online exhibitions will be restricted. According to the "World Internet Development Report" released by the World Internet Conference, the top five countries in internet development are the United States, South Korea, China, Japan and the United Kingdom. To test the development level of the Internet, we often have to consider multiple factors, including the Internet infrastructure, the level of regional economic development, the level of percapita income and people's education level. When we apply the latest artificial intelligence, big data to the online exhibition platform, we need to think about some questions. Where are the buyers sitting at the computer from? Does the Internet speed meet the requirements? Are the hardware and software compatible? Are they able to use them?

However, the recent online exhibitions in the world seem to have confirmed my doubts. Take the online Canton Fair held in June as an example, problems mainly exist in the following aspects.

First, unstable network, poor equipment, low traffic, and only peers peeping what you are doing have become common problems exhibitors participating in the online exhibition complain. Problems that are caused by hasty structure of platforms are probably understandable, and can be solved with efforts. But the major reason why buyers don't come online, I'm afraid, should be found from above. Because of cultural differences, we should place a question mark on whether Americans and Europeans can accept live streaming. What's more, even in China, the main audience of live streaming is young people in the 1990s, while in international trade, it is the home of the 60s, 70s and 80s generations.

Second, even if there are buyers online, there is no incremental inventory. For existing customers, as a result of full understanding in the past transaction, the communication with suppliers in the studio will be restricted by all kinds of factor, such as to register, and be online at a specific time, etc. So it is better to use other online social tools to implement dialogues. Because incremental customers belong to new customer groups, it is better for them to find suitable suppliers on BTOB platform simply rather than browsing pictures and introduction of products, since more abundant information are available on those specialized platforms. More importantly, professional buyers cannot make purchasing decisions based solely on product images.

Third, we might as well try to analyze from the perspective of economics when we make any investment. One important point is the return on investment. When any country, society and enterprise have invested a large amount of capital, manpower and material resources into the Internet exhibition, it is understandable that there is no short-term return. But in the long term, the outbreak will end eventually, and offline events will be restored. Then we may need to consider two questions; the first one is the problem of repeated investment. Over the past decade, countries have built a large number of the pavilions, and online exhibition platform essentially belongs to the fixed investment, so does it belong to repeat investment? The answer is yes. Once the exhibition is resumed, how to solve this problem is likely to need production capacity. Secondly, the experience of last few decades tells us that the exhibition not only can drive the prosperity of trade, but also can drive the regional catering, tourism, hotel, and the development of the aviation industry. In fact, due to the nature of the Internet, it has no correlation with the industries mentioned above, not to mention to promote the development of these industries.

Based on the above analysis, can online exhibitions replace offline ones? The answer is obviously no. And we can have a bold speculation that so many Internet exhibition platforms set up hurriedly in 2020 may face two endings in the near future. First, they will end in total failure, no traffic, no active users. We may still have chances to find these platforms on the Internet, but they will have literally been abandoned. Second, those platforms might be a supplement to online exhibitions, continuing to provide offline exhibition services for buyers and exhibitors, and become an extension of offline exhibitions on the Internet. In my opinion, this may be the best outcome.
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