Alexander Shtalenkov: “We are ready to share experience”
Alexander Shtalenkov, ITE Russia CEO, told Expotory newsdesk about the structure of the largest in Russia exhibition company, strategy for the next years, employment issue and market regulations, digitalization and content for exhibitions.
— What is your assessment of ITE position on the exhibition market in Russia?
— As of today, ITE group of companies is # 1 on the Russian market. Our share, based upon square meters and revenue, equals to about 20 %. Our nearest competitors are Expocentre, Crocus Expo and Messe Dusseldorf. In the world ranking we take the eighth position, and at the previous exchange rate of rouble we were even higher — at the fifth position. Major portion of income is drawn from Russia and countries nearest to it, but with that, we are an English mid-sized business. ITE is a private British publicly-held entity established in Russia in the early 1990-s.
— What is your company development strategy based on?
— We were growing at an intensive rate during the 2000s as the Russian market fostered that: economy was booming, and a lot of industrial exhibitions were booming respectively. For example transport, grocery and tourist topics related. The driving force of our portfolio has always been construction exhibitions — MosBuild remains a largest exhibition in Russia today as well. Many exhibitions have been held for about 25 years, that is why we understand market needs so well. In practice, unlike many other organizers, we are Russian market experts of international level. A lot of foreign exhibition companies choose us as a local partner. We have common projects with Messe Frankfurt (ITE MF company, conducting exhibitions related to automobile industry), Reed Exhibitions, Deutsche Messe, etc.
— How did you build up the company structure in Russia?
— A crucial moment of our development was the decision to expand to regions. Krasnodar, Novosibirsk, St. Petersburg, Yekaterinburg are the key cities of our operation, their local infrastructure improved up to our requirements eventually. Specifically, new exhibition centers appeared in Krasnodar and Novosibirsk. The Russian exhibition industry was strongly fragmented and needed consolidation, that is why we rapidly developed business in regions.
Solving the problem of market consolidation we expanded our share from 9 % in 2007 up to 22 % in 2015. As a result, we can hold exhibitions in all cities of operation at a higher level, increasing participation efficiency for exponents and visitors. All our investments in regions proved its value, we are pleased with the results.
— How did the current economic situation influence the company plans and what do you consider to be of higher priority in 2017?
— It is tough times now, and not only in Russia. If the world exhibition business was growing at a speed of 4–5 % a year till 2014, then by the crisis beginning the speed came down to 3 %, and in 2015 — to 1,7 %. The world market started to shift into low gear. In Russia the trend also comes with GDP contraction. Exhibition business suffered heavily, the drop on some projects reached up to 30–40 %. We were losing clients, reducing areas. A considerable number of foreign companies ceased taking part in exhibitions. Last year the drop slowed down and a trend to levelling-off emerged. A lot of companies from Russia came to us, as well as from CIS and those countries which do not support the sanctions regime. Under new conditions one should think about changing customary business models. We shall definitely pay attention to regions. We hold particular events even without arranging representations, for example, in Vladivostok, Kazan and the Crimea. The main thing is to have a well-equipped floor to hold an event.
— You mentioned Kazan. KAZAN EXPO is to be put into operation soon, it is promised to be a modern advanced exhibition center. However, along with that two operators are already competing at the regional market.
— Competition is always destructive for exhibition business; there is nothing worse for a local market than feuding organizers. This not only immediately hits in operators business profitability, but also backfires on exponents and visitors who are “tugged” in different ways. It would be nice if everybody in Kazan agreed with each other. Exhibitions being held in Kazan now are good high-demand projects. We already had experience of work with “Kazan Fair”. KAZAN EXPO should offer comprehensible rules of the game, and the sooner they become clear the better. Tatarstan capital is a serious hub and a new exhibition center to appear there is basically appropriate.
Up-to-date infrastructure is a key element in exhibition business, but at the local market it is organizers’ arrangements and correct choice of projects the efficiency of show-floors depends on.
— Even the most up-to-date infrastructure hinges upon skilled personnel. If in Moscow you have options, then in regions the situation is more complicated. How do you work with the staff? Is there a system of guidance, control? How do you maintain the quality standards ITE brand is responsible for?
— Employment issue is crucial in this business, everything depends on people here. That is why it is highly important to have a strong, loyal and experienced team. Quite a number of employees work for us for 10, 15, 20 years, we even introduced corporate marks of distinction: for 10 years of work we bestow a golden badge, for 15 and 20 years — badges with small diamonds. And the more five years they work, the more diamonds they get. Our experts are ready to employ a person with or without experience but with a strong potential and train him or her. We have a coherent training system and develop aids on our own, for instance, we created “Salesman ABC Book”. We actively work with students, offer collaboration at exhibitions, lecture at colleges. Our company trains activity-specific personnel, regularly conduct conferences for exhibition executives, marketing experts. What concerns regions, here we apply the executives rotation system: there are instances of top-managers transition from Krasnodar to Novosibirsk, from there to Moscow and so on.
— If you have such a developed corporate training institute, why not make your developments open for the industry? RUEF regularly raises the issue of uniform professional standards.
— We are ready to share experience.
— How good are centrally-controlled measures for the Russian exhibition industry? Do trade unions and the government manage to regulate industry processes?
— To answer this question we should take a look at the Russian market design. There are several types of players: show floors, organizers or operators, participants and visitors. Centrally managed support and state support shall be present beyond all doubt. But only for particular categories of market participants and separate directions. First of all, you cannot develop the infrastructure and build exhibition centers without state aid. All exhibition centers that I know received public funding in one form or another. As exhibition centers are not such profitable real estate as business centers or malls, they have a long payback period. Exponents also need subsidies, export promotion. There are institutes for that, such as the Russian Export Center, for example. As to organizers, there should be free market conditions for them, government intervention is not needed here.
— So the market requires industrial self-regulation?
— Absolutely, and associations like RUEF should dynamically solve the industry issues: lobby and protect interests of their members, dampen down controversies. The task of the association is to help players come to an agreement between each other. It is impossible to dictate stiff requirements to companies in free-market conditions. However, moderation of reasonable market relations is a direct responsibility of the community. I always instance the approach of executives of Expoforum in Saint Petersburg: “You don’t need to hold several exhibitions on 200–300 square meters each, let’s get together and hold a big one”. It works.
We should solve problems inside the industry without waiting for some smart guy to come from the ministry and clear the air. There is no such thing in free economy conditions.
— One of the most hot-button topics at business conventions is digital technology introduction. How does ITE feel amid global digitalization?
— Information technologies and advanced solutions in exhibition business helped us to overcome the crisis of 2008. And they are helpful now. Crises are an integral part of life under capitalism. For us it is always an impetus to approaches changing. 2008 crisis helped us to reconsider the marketing approach. In 2009 we transferred all our communication with exhibition visitors into the online mode. Today 92 % of our visitors in average register on exhibitions websites. When we started only 10–20% used that opportunity for some exhibitions. However quite soon, during two-three years, everything went online. The consequence was more serious: the need for expensive offline advertising ceased to exist.
— Efficiency and availability of online channels were proved long ago. However, this segment is now abounding in business solutions — from automation of business processes to application of neural networks. What technologies do you use?
— The most efficient ones: mailout and website promotion. Social media work for b2b-events only in a very limited number of exhibition directions — where some kind of professional community is present in the Network: pharma technologies, oil and gas, tourism. That is why it is mailout we are focused on.
— Mailout is just the first stage in the consecutive system of work with the audience. Its efficiency depends on database segmentation, content personalization, correct settings.
— Actually, it was the second crisis that made us think about categories of our visitors. We try to personalize client work. Today we understand the reason every visitor comes to our exhibition for, what products he/she wants to see, choose and buy.
— What specialists in the company are engaged in these processes and what services are used here?
— We learnt to work with visitors, register them online, study their demands and targets of their work at the exhibition. After events we take various online polls, calculate Net Promoter Score — when you find out in a special way if visitors and exponents would recommend their friends or colleagues to take part in an exhibition. Having learnt to do all of that in Russia, we started to train colleagues in other countries. Our company has a Centre of Operational Excellence, which is engaged in technologies and business apps, and is designed to work with visitors online. Currently the Centre renders services to the whole ITE group of companies, promoting these services and technologies in Asia, Azerbaijan, Ukraine, and in all countries of operation.
— Do you develop technical solutions inside the company or use the ready-made ones?
— Standard automation for business, for example, bookkeeping is of course a ready-made solution. The rest we do on our own. As, in practice, we beat a path and then cover it with asphalt. We see an opportunity, work out the idea and after that automate the process. Automation, to my mind, is the simplest stage.
— Introduction of IT tools is in process in Germany and the US now. Do you monitor the developments being realized there? Which of them do you consider successful?
— Of course, we keep a close watch on what appears in the world’s practice, and try to adopt the rewarding experience. We did not invent the print-at-home badge, but we were the first in Russia to use it at Pharmech-2013 exhibition. And immediately almost 5 000 people used the service. Today there are almost no queues to register for exhibitions: you do not have to fill in forms by hand — everybody registers online, prints out the badge, holds it to barcode reader and enters.
— What about deeper processes? How targeted is your work with the audience?
— The procedure of preparing for any exhibition and working with the audience is almost the same at any company. We have an online catalog, personal accounts of participants and visitors, online floor plans — it simplifies participation in exhibitions, helps to arrange the route of a visit. These technologies are realized practically by all organizers, and it does not matter what programming language they are coded in.
— Exhibition is a large number of newsbreaks. Is this content efficiently used now?
— There are two essential tasks an organizer has to cope with. The first one is connected with the exhibition business platform: at the appropriate place and at the appropriate time an appropriate visitor is to meet an appropriate exponent, and vice versa. Some people come to sell a product, others — to buy it. First of all an organizer has to provide efficient communication at this level. During the recent years we have been successfully handling the task, as we learnt to understand needs of exponents and visitors and to connect them. The second task actually concerns the content. Any exhibition is more than just selling. In large measure, it is determined by sector profile of events, as exhibitions service a long chain of purchase and sale between manufacturers, large distributors, dealers and so on. On many topics exhibitions have a transactional character, in such cases the content is not so important. However, general demand in the content is growing, and this trend is characteristic of the whole global exhibition business.
The best global exhibition companies fill exhibitions with the content. People want to understand what is happening in their industry, to know interests of the professional community, to share opinion. The most successful global-scale events have a mixed character: strong content plus proper business platform.
— How do you create the content-related part of exhibitions?
— Beyond all doubt, we pay attention to the content. Most of our exhibitions are held simultaneously with conference events. The most successful one takes place in parallel with the oil and gas exhibition — it is the Russian Oil and Gas Congress, at which important geopolitical topics and engineering issues are discussed. We have TransRussia exhibition, focusing on transport services. Simultaneously with it a conference is conducted, where high-ranking speakers, representatives of RR and all other leading transport companies discuss industry problems. Along with World Food a number of highly important events take place— an agrifood congress, procurement tables. Everything is held in different formats. Generally speaking, none of our exhibitions is left without the conference, content-related part.
— In summary, you constantly generate the content, as an exhibition together with the conference part is a huge array of information. How does this content find its way to people? How does it meet needs of a particular user, exhibition visitor?
— We are actively working with reporters, arrange press tours — gather representatives of industrial titles and show them stands in an orderly way, providing the opportunity to communicate with exponents. We direct them while acting compliant to a certain scenario and it has a meaningful effect. It can never happen that a reporter comes to an exhibition without knowing what to start and what to end with. Moreover, we have established relations with industrial associations, with the assistance of which many conferences are held — information is spread via them as well. People change but still we know almost every visitor. We store huge databases. And our visitors always know where and when this or that exhibition is to take place. Using modern tools we can always understand what avenue of promotion worked and where our visitors came from. The main thing is to attract them to an exhibition and offer a deserving service.
Photo by: Anna Prytkova