Trade events are making a gradual shift from a national scale to regional
level. Greater PC penetration and user tech-savviness has propelled buying in
towns and cities and buyers here want to get a first-hand feel of products.
The Manufacturers Association of Information Technology (MAIT) used to
organize an annual event in collaboration with Confederation of Indian
Industries (CII) and National Association of Software and Services Companies (NASSCOM),
till 2000. Now, the association is taking all its events to smaller cities,
where it has its offices, simply because the response from these places is
significant.
Vinnie Mehta, Executive Director, MAIT, feels that the shift of various expos
from national to local scale is a sign that the domestic market is maturing.
"With the increased growth IT sales in B- and C-class cities, all
peripheral activities are gaining ground and an entire new eco-system is
flourishing," says he.
At the same time, one can’t write off national events as history because
Bangalore IT.Com was a major success in recent times. At the same time, one does
not hear any more of these grand NASSCOM and MAIT events.
The trend definitely is getting ‘Regional’. Some 10 cities in the Western
region of the country are planning to have trade shows beginning from December
up to February. Computer Association of Nashik used to hold its annual
exhibition once every two years, but now holds it yearly. It is expecting to
house over 100 stalls at an expenditure of Rs 5 to 7 lakh and hopes to make a
profit of 20 to 25%.
Pankaj Nath, Associate VP, CyberMedia Events, points out, "Most national
events are B2B and are aimed at showcasing products and dissemination of
technical information. Local events, on the other hand, are more B2C based,
where sales is the prerogative."
LOCAL EVENTS WHERE THE ACTION IS
There is a growing demand from end-users to have local expositions because
these expose them to latest products in the market. Footfalls recorded in such
localized events are estimated to be around 5,000 visitors per day. And this
number is increasing steadily.
Dhyanesh Thakkar of Mumbai-based Brainwave Systems agrees with this and adds
that the vendor participation and visitor walk-ins for national expositions have
reduced drastically. As a participant himself, he would rather put his money in
a local event, since he operates within a particular city or to its outskirts.
Dhyanesh prefers dealing with visitors belonging to the
region where he is operating, rather than targeting users all over the country,
through a national event.
This is a common feeling among most resellers, who do not have the money
power to spend on big expos. Given that most partners operate within a city or a
state, showcasing their products in an event that draws local crowd becomes
economical.
Vendors too are in favor of regionalized events, either through their own
branch offices or distributors. They find this strategy very useful to establish
their brand in small cities.
Says P G Kamath, General Manager, Lexmark India, "My money’s on the
localized, or what I would rather call as B2C events. These could even be
consumer fairs where IT products are exhibited. This is because the RoI is much
higher here, as one interacts directly with the end-user."
WHY ‘REGIONAL’ SHOWS MAKE SENSE
Regional events make good business sense for local players like SIs,
resellers and dealers as investment in such events has steadily spiraled down.
Participants can get stall space for as low as Rs 10,000.
The biggest advantage of a local event is that resellers have direct access
to the end-user. Sales conversion is higher, especially if the participant
offers good discounts and schemes. At the same time, one gets a good database of
prospective buyers. Also, there is standardized pricing in a local event, as
various local taxes are taken into consideration.
Vendors can view local expos as a second launch of their products, which
might be well-established in other markets. They can come up with schemes and
incentives best suited for the region, to give it a local flavor. Though some
may view this as a stock-clearing option, no one seems to be complaining.
Resellers/systems integrators (SIs) feel that national events do not help
them boost their business. "This is all the more so because vendors and
distributors can offer corporate buyers better bargains than a small
reseller," says Dhyanesh.
PG Kamath seconds this line of thought, having participated in national and
regional expos. He feels that national events are a good place to network and
impart knowledge, but at local events, one can convert walk-ins into sales,
especially fast-moving products like printers.
NATIONAL EXPOS ON THE WANE
NASSCOM, which used to hold one of the most prominent national events, an
exhibition combined with a convention, dropped the exhibition in 2003 and held
only the latter. And while it saw the participation of over 143 companies in
2001, only 73 participated in the exhibition in 2002.
Kiran Karnik, President, Nasscom had some time ago stated, "Currently
what we are witnessing in the context of the IT exhibitions scenario is the
dwindling of enthusiasm among Indian IT companies... companies are evaluating
the cost and benefits accrued by participating in exhibitions and then making
informed decisions."
Vinnie admits that vendor presence in national events is declining but
reiterates that a vendor will participate in either a regional or national
event, as long as it is in line with what the company wants to convey to the
visitor.
Bangalore IT.com is the only national event, which is
currently taking place successfully. The number of participants in BIT.com 2003
increased from 260 last year to 285, out of which 70 are overseas participants.
And one reason for its success is the strong backing of the state government.
For visitors, events like BIT.com is an ideal place to strike
a bargain, as products can be booked and bought at dollar prices from
international participants. Such deals are usually for high value products and
the unit sales might not be high, but the value of the transactions are usually
impressive with each deal running into lakhs of rupees.
National events also attract many serious buyers, who are
interested in learning more about a particular technology. This is the reason
why technical seminars and symposiums form an integral part of such events.
COST CONSIDERATIONS
National events are a playground for the big and bountiful. This is where
MNCs flex their muscles to attract more visitors with showy stalls and fancier
products on display. Participation in these events can cost anywhere from Rs
70,000 to Rs 1 lakh. And this just includes the cost of a basic stall, according
to Cyber Expo India Ltd, which organizes some of the leading trade events like
BIT.com and Kerala IT.
If a participant wants to stand apart in a place crowded with look-alike
stalls, then it will have to get a event co-ordination company for ad banners,
create a display shelf, get a few hostesses to man the counter. And all this
will cost an additional Rs 50,000 informs Mani Krishnan of Consumer Links, an
event managment company. "It also depends on the nature of designs the
participant wants," he adds.
Most big-time vendors budget their expenses for marketing and promotion. But
for regional partners, who operate on very thin margins, this is an unthinkable
and avoidable expense. Especially, when they can get a stall in an event
organized by a local association or event manager for around Rs 10,000.
Of course, one thing that a regional participant should do to get his money’s
worth is is to locally advertise on his own. This is in addition to the
promotion the event organizers undertake.
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And the reason for this is that a local event will get all kinds of people
walking in, most of whom might not be the partner’s target audience. It is
best to invite a few existing clients, as well as prospective buyers, by sending
them e-mail invitations or calling them up personally. This will ensure good
sales, as these select buyers will be able to view the entire portfolio of
products and services at one go. Says Dhyanesh, "Local publicity makes all
the difference. If I don’t have my set of customers, whom I have invited
walking into the event, then the sales conversion ratio will be much
lower."
TRADE BODIES IN THE GAME
Local trade bodies are going to have busy quarter ahead as several events
are scheduled to be held during JFM 2004. Event organizer Mani points out that
local associations have the advantage of knowing the local flavor.
Baroda Information Technology Association’s IT Expo held early this year
attracted nearly one lakh visitors with over 100 stalls displaying their wares.
Paritosh Mehta, President BITA says, "Traditionally, SOHO buyers in the
past postponed their purchases until the IT Expo in order to get their hands on
latest products at attractive prices," underlining the popularity of local
events.
Another success event was Bangalore-based Association of IT’s PC Expo in
July 2003. The 30-stall exhibition attracted 50,000 visitors from home, SME and
corporate segment.
Earlier, some local expos focused more on the exhibition part of the event,
missing out on technical discourses, which is the USP of national events. But
now, these events are becoming more well-rounded with technical seminars and
discussions on emerging business opportunities.