Friday, November 30, 2007

The next IPO?

I have been very grown-up this week and manfully resisted the temptation to post on the house that Jack bought.

Instead, we'll speculate that the next B2B IPO, riding on Alibaba's coat tails may well be opposed to which is different and run by HC International). Blogger David Lau Wei has written a long post (in Chinese) on the company in which, amongst other things he says:

  • Made-in-china will have revenues of Rmb200 million in 2007 (US$26.5 million) and profits of around Rmb80 million (US$10.5 million).
  • In March 2007, the company which was founded in 1998 received a strategic investment of $5 million.
  • They have considered IPO in 2006 and spring of 2007. They are now looking at an IPO in September 2008.
Our highly unreliable (there, I'll get that in before the phone rings) Alexa-based rankings place as #2 in the Asian B2B league behind with around 950,000 regular users.

Update: Hmmm. It appears that Mr. Lau may have 'borrowed' that content from the China Finance Online site as it pops up here too and it looks as though it's one of their reporters who covered it.

Wednesday, November 28, 2007

Paying in China

It's a joy to be back in Beijing where you can cut the air with a knife and post to the blog but not read it. Not to mention traffic being stopped for 20 minutes on the Airport Expressway to allow a departing dignitary a misleading view of Beijing traffic.

Seeking Alpha carries a Chinese Tech Stock Weekly Summary which is always worth a browse. To pieces got clipped into my Google Notebook today and both refer to online payment systems.

Firstly, Paypal in China:

PayPal disclosed that it is cooperating with China International Travel Service [CITS] to offer a new payment service on CITS' web site.

Monday, November 26, 2007

Alibaba to distribute Thinkpads?

This is an odd story. Alibaba can comment here if they want to on whether or not it's likely. The piece comes through Sinocast and I picked it up on Trading Markets. The basic thrust is:

Now, Alibaba has no physical infrastructure which would allow it actually to distribute. So, it would be more of a sales channel than real distributor....unless there are plans afoot over in Hangzhou of which we're not yet aware.

Watch this space.

Sunday, November 25, 2007

Righteous indignation against the Economist

We've written about Ken Carroll's Chinesepod business before (and here). It's very interesting, well done and, as far as we can see, represents a novel take on technology and language teaching. Thanks to Fons Tuinstra, we see that Ken has started a blog and this post is a blast.

Like most of us, he holds the Economist in high esteem but takes them to task with great gusto over what he sees as a case of very sloppy reporting about Chinese teaching:

...this is probably the worst article I’ve ever read in the Economist. The writer seems to have put this together so quickly and superficially you have to wonder if he did it purely to fill a column space on a bad morning. As I said, I read and love the Economist, but this is appalling. Tell me this was written by an intern with a bad hangover, please!
The Economist article addresses what I think is an important topic: the value of the current "fad" (their word) for the teaching and learning of Mandarin/Putonghua. Read Ken's piece to find out what he thinks is the matter with the piece.

My concern focuses on the bad teaching of Chinese to unwilling kids by teachers whose main qualification is being Chinese. It's a reversal of the old problem with English-speaking
youngsters paying for their backpacking trips around the world by 'tutoring' English. Never has so much damage been done by so few...etc. If it's going to be done, it needs to be done much better and with much more careful thought.

It probably also needs to be done either much earlier or much later. Trying to drill 13 year old boys who are not interested in tones, China or Chinese must make for misery all round.

Saturday, November 24, 2007

All Hail Diller-xiansheng, China expert

When I first travelled to China in 1985, I was given sage advice and a good warning by an American who is still there and running what is now a listed company. Stay for a week she said, and you'll feel prepared to write a book on the place. Stay for a month and you'll be up for an article. Stay a year and you'll be so thoroughly confused that you won't want to write anything.

So, I was intrigued to read this Seeking Alpha post of Barry Diller's plans to conquer China:

Diller commented that he was not especially worried about the complications of running a business China; he plans to spend a couple weeks traveling and meeting successful internet entrepreneurs.
That'll do it then; 2 weeks and a handful of bright boys with pony tails. Forget eBay and Yahoo!'s failures and the struggles that Google has had to establish itself in China.

Demonstrating his absolutely mastery of Chinese regulation, Diller reportedly said "online gambling, a booming market in China, would be on the top of his list". Hmmm. I think there will be quite a line of people waiting in Beijing to relieve him of his $100 million.

Friday, November 23, 2007

Listing the whole thing in China

Although there appear to be a number of Chinese media companies listed both in China and outside, a closer examination will generally reveal that what has been listed is not the whole business. The publications themselves and associated editorial operations have typically been excluded. What has been listed is the commercial arm of the business. A typical example of this is SEEC Media in Hong Kong, the ad sales division of the publishers of Caijing magazine. The magazine itself, though, is officially published and produced by a different, Beijing-based company.

That may be about to change. Zero2IPO picks up a China Daily story about the "State-owned Liaoning Publishing and Media Company Limited [which] was approved by the China Securities Regulatory Commission on Tuesday for an A-share initial public offering". This, the article says, will make it "China's first wholly listed publication company, which will include both its editorial and operational business in the listing entity".

Thursday, November 22, 2007

Censorship on our mind

We really ought to leave this topic to the real experts on the subject such as Hong Kong University's Rebecca MacKinnon. However, two pieces caught our eye today:

  • There's a good piece in today's FT by Mure Dickie in which he talks about the pervasive but often relatively undetectable heavy hand of censorship in the Chinese media and Internet. He is sceptical of those who suggest that, at a local level, the Internet and other local media are more open than we believe. He asks "How much does this matter? I will leave the last word to Zhou Xiaozheng, a Beijing professor..."If people do not have the right of expression, there can be no 'rise' to speak of," Prof Zhou said in one remark that, ironically perhaps, did make it to broadcast. "[And] even if you do 'rise', nothing good will come of it."
  • Meanwhile, over in Thailand, it seems the Wikipedia founder Jimmy Wales put the cat among the pigeons when he spoke frankly about censorship in front of those responsible for putting the screws on Thailand's freedom of speech. The FACT - Freedom Against Censorship Thailand blog reports that he was a keynote speaker at the government's ICT Expo. The Bangkok Post apparently reports '“Thailand should recognise that censorship is a barrier to progress,” [Wales] said. Later, when asked if he realised that his hosts at the Ministry were the ones responsible for censorship in Thailand, Wales said that he was glad he had been talking to the right people…'.
We're sadly not convinced that the powers that be around Asia will buy for the foreseeable future the argument that clamping down on free speech, online or elsewhere, is going to be a barrier to progress or the rise of their countries. But, we can live in hope.

Wednesday, November 21, 2007

P.S. Global Sources also up strongly

Interesting to note that Global Sources also had a cracking day on NASDAQ yesterday when the market overall wasn't doing anything too exciting (up less then 0.5%). GSOL posted an almost identical gain to Alibaba, up 9.63%.

They did make an announcement yesterday about linking up with Semicon to produce Taiwan's largest IC event. It's hard, though, to imagine that this alone could great US$112 million in increased market value.

Alimama, that's Ali that's going on

Thanks to the South China Morning Post for answering yesterday's question about what spooked the Alibaba share price up almost 10%. No thanks to the Kuoks for keeping it behind the paywall.

It seems that the market got itself all excited over the official launch of the Alimama ad network (we first wrote about that back in August). It is part of Alibaba Group, not the B2B division which is listed.

That, however, is not stopping the Hong Kong analyst community working itself up into a froth over the possibility that Alibaba might inject Alimama into the listed company, something which spokesman Porter Erisman outright denies. Denials clearly didn't cut any ice with the boys in the finance houses who see their year-end bonuses shriveling with the markets and are keen to pour something inflammable on the dying embers.

Now hear this for silliness: JP Morgan's Dick Wei suggests that "It's possible, especially when Alibaba's share price is weak...". Is WHAT? I hope he's referring to the theoretical possibility that it might be weak in the future. If he thinks its weak now, I simply despair.

Update: Free for all is the Standard's version of this story which explains the 'cute' Babas and Mamas play on words as well as suggesting that investors weren't really aware that this was outside the listed company.

Tuesday, November 20, 2007

Ali-oop. What's going on?

The Hang Seng index recovered a bit today, up 1.13% at 27,721. Alibaba, however, had a cracking day, up 9.89% at HK$35.55. That added HK$18 billion or US$2.3 billion to its market cap which now stands back up at HK$179 billion (US$22.9 billion). At one point, the price hit HK$38.10, approaching it's all time highs.

What's got the market all excited about them again? I have no idea.

Trusting the Internet

I was reminded of the famous 1993 New Yorker cartoon "On the Internet, nobody knows you're a dog" when I saw Thomas Crampton's post today. There is a dog's behind at the top of his blog page, but that wasn't the reason why. The post is headed "Chinese trust the Internet above all information sources".

Given the issues of authenticity on the Internet, this may be worrying. For those who celebrate the anarchic information flows, it's probably very good news.

Tom's piece is based on a study done by Harris Interactive for Edelman. To my mind, it has very interesting implications for publishers choosing how to enter the market: go with a Chinese partner or, as some have done, come in directly from over-seas and online? For general consumer media, there isn't too much choice. You have to go local. But, for non-controversial B2B and technology publishers, there are options.

I struggled with the jargon for a few minutes (the coffee not yet kicking in I assume). Being a PR amateur, it took me a while to work out the MSM must stand for mainstream media.

Monday, November 19, 2007

Technology vs. the human touch

Eddie Choi has posted some interesting thoughts over on his Marketing, Technology and Entrepreneurial Experience blog. The post is titled Private Label B2B and he's talking about the opportunities for competing in the B2B area with relatively simple and inexpensive technology tools.

I do like the concept of private label B2B he proposes for companies such as trade fair organisers. I don't agree with everything in the post and you can see comments on it at the bottom of Eddie's post. My concerns are focused on the capacity of technology alone to generate useful new B2B businesses.

I haven't yet come across a B2B business which can convert good technology into a great business without a number of other solid assets in place and without a substantial hands-on face-to-face sales effort. Even the most successful businesses out there are using pretty basic technology and I'm not sure they're any the worse for that. Mind you, some of the databases underpinning the big players are pretty good.

Great databases and strong sales teams. I suspect that's at the heart of good B2B media businesses in Asia just as much as elsewhere.

Friday, November 16, 2007

Taking a leaf out of the Ali-play book

I like to race sailing boats and one of the key competitive tactics is called 'covering'; you try to keep your most important competitor beneath you and in your shadow so that they can never get better wind than you.

There seems to be a bit of covering going on over at Global Sources. I read this transcript of yesterday's analysts call with some interest. A key point in CEO Merle Hinrich's discussion was the launch of the new China Global Sources service at the end of this month. A few comments caught my eye:

Firstly: "this is a substantial medium terms opportunity for us". For which read, "no immediate comparisons with Alibaba please".

Secondly: "The addressable market in terms of number of suppliers is much larger than our international site, and the Online opportunity will grow significantly over the next few years as more and more of the 30 million or so SME suppliers in China get Internet enabled, and as Broadband penetration increases". For which note: here comes the covering. That's directly out of the Alibaba IPO script; much of that huge valuation has been justified on the basis of battalions of currently unwired SMEs signing up for their web based services. Alibaba has been using a number of over 40 million SMEs.

Thirdly: "As a reminder we will be offering this marketing service free of charge for a period of time, while we build the content and buyer and supplier community and establish leadership traction". For which: please forget previous acid comments about "free is not a business model".

Heh, all's fair in love and war. Why not play them at their own game in China while sticking to the different 80:20/full-service B2B model on the international side (you'll have to read the transcript if you're not clear what I mean about that)?

There are also some interesting comments about the possible impact of a US slowdown on their business. In response to a question from Henry Ai at BNP Paribas, Hinrichs commented:

We have, as of yet, not seen a slow down in the buying. We have a larger; a higher number of attendees, at our trade shows, here in October than we had the previous year. That's number one.

And number two, though the U.S. market in particular remains extremely important, there are many other markets that have developed very rapidly, which are of course the Middle East, and Russia's become a very exiting market for a number of suppliers. And certainly Brazil and South America as well.

So, there's an increasing of alternative markets, which are taking up some of that slack. I think it's needless to say that if there was a huge slow down, of course, it would impact the demand and it would impact our suppliers.

If that does happen, I know for a fact, as we've seen this same phenomena in years past, that buyer respond by trying to locate products which more closely favor a community who are looking for products, but at possibly a lower price or maybe in many cases simply a lower value.

So, merchandising does not just simply cease in a poor or a reduced market or slower market, but it does change. So yes, if it got very serious I'm sure that it will have some form of impact, but we haven't seen that yet, Henry.

Hinrichs also quoted a BSG report, for which thanks.

Thursday, November 15, 2007

Global Sources reports strong quarter

Global Sources has just announced a strong 3rd quarter. Highlights in their press release are as follows (comparisons are with Q3 2006):

• Revenue was $33.8 million, up 15% from $29.3 million.
- Online revenue was $19.7 million, up 18% from $16.7 million.
- Print revenue was $12.6 million, up 6% from $11.9 million.
• Revenue from mainland China was $19.9 million, up 28% from $15.5 million.
• EPS was $0.12 per diluted share, up 20% from $0.10.
• Total deferred income and customer prepayments were $88.1 million as at Sept. 30,
2007, up 28% from $68.7 million as at Sept. 30, 2006.

The 30% growth in mainland income might provide a sensible benchmark for future growth over at Alibaba. By my reckoning, print media in China is growing at about 5 - 10% while exhibitions are likely to be up this year in the region of 25% and online 30%. So, these numbers are absolutely in line with my sense of the market.

This is one of Global Sources' 'quiet' quarters as they don't recognise any major exhibitions income in this period.

Flavour of the

I read with some interest yesterday Rex Hammock's post about the Wall Street Journal executive who appears to have contradicted to Dirty Digger's commitment to bring down the subscription walls around the site. I trust he has his c.v. well polished.

Well, even before the Murdoch deal is consummated, it seems that a chink in the armour has appeared with the addition of Digg links which allow people to get around the subscriber wall.

Then, this morning I read on that Business Today, one of the 'big three' business magazines in India has just relaunched its website and removed subscriber barriers. Nikhil Pahwa writes:

The new site incorporates social bookmarking features (, Newsvine, Technorati), RSS feeds, and displays content related to stories. B-T also has an emagazine, though I don’t quite see the point: epapers and emagazines require too many clicks to access content, have too many pages with ads (like magazines).
This approach certainly makes sense in India where subscription rates are anyway very low and collection complicated.

Tuesday, November 13, 2007

China makes it harder for publishers

There's a good post of the China Law Blog today in which they reveal details of the new Catalog for the Guidance of Foreign Invested Enterprises (Revised 2007) or 外商投资产业指导目录(2007 年修订) from the National Development and Reform Commission in China.

Of particular note to publishers (print and online) is this section:

Continued restriction and prohibition of participation in publishing, media, market research and social research. In recognition of the influence of the Internet as an alternative publishing source, various Internet based businesses have been added to the prohibited category. This denial of access for media and publishing is a hot button for the United States and the Chinese do not seem willing to budge a bit on this.

No surprise that they're not opening up. Nor, for that matter that they're trying to plug the loopholes in the regulation of the online side. I'll be digging deeper into that to try to work out what's going on.

Monday, November 12, 2007

You don't need a fancy venue

Fun post here on the blog (that's China plus India's population in case you wonder where the number comes from) on the "biggest trade fair of the greater Himalayas". The Lavi Trade Fair has, apparently, been going since the late 17th Century and is living proof that business will be done where there is business to be done whether or not we have the latest, greatest, state-of-the-art facilities.

This is important food for thought who become anxious about the new, bigger, and shinier halls being built down the road. If down the road is not where the business is, then those new, shiny halls won't make a d*****d bit of difference.

Conferences on my mind

As an organiser and consumer of conferences, they are often on my mind. I am aware that there is a degree of dissatisfaction with the "PowerPoint and talking heads" model and that most of the interesting interactions at most events take place outside the conference room itself (by the pool, at coffee breaks, on the bus to the dinner, etc.). This presents organisers with some interesting challenges.

I have been aware of a few interesting threads on this topic in the past week or so. Jupiter Research's Michael Gartenberg posted on "Why Most Conferences Suck", quoting another post from Dave Gilmor on the subject. Gilmor worries that attendees are not really involved enough while Gartenberg suggests that he also has concerns about the value of spending time at trade shows.

Then we get onto the alternatives:

  • Gilmor points to Paolo Valdermarin's post about "pod" conferences. This seems to be an extreme version of the trend which has been evolving in IT events over several years to get ever-more focused; just a small group of attendees with very narrowly-shared interests. It can be great for the attendees. It's very hard for organisers to make money with.
  • Then, I notice 852Signal talking about the launch of the BarCamp 'unconference' in Hong Kong. I realise this is not a new concept but the fact that it is evolving strongly in Asia as elsewhere makes it clear that the organisers are onto something.
  • Then, I notice that the lively Danwei China media blog is organising a "Plenary Session", "a lively, PowerPoint-free panel discussion" on careers in the media, technology and communications. The point here is presumably that once PowerPoint is introduced, it's hard to have a lively discussion.
  • Finally, there's a thoughtful post from Rebecca MacKinnon on the series of Web 2.0 conferences she has been attending in Beijing.
There's lots going on and a lot of experiments. Nobody though, as far as I can see, has really come up with quite the right solution to making these events marketable, truly valuable and profitable for the organisers.

Friday, November 09, 2007

Kenfair explained...sort of

There is a magnificently complicated document on Kenfair's website today. The legal masters of obfuscation have been burning the midnight oil.

Shares are trading again (and are up $0.15 at HK$1.30 as we speak) and a deal has been done which will see the shareholdings substantially restructured. I prepared the mindmap you can see here to try to work out what's going on (click on it to make it big enough to read). Subscribers to our Tracker service get it spelled out for them (hope I'm right!) in this week's newsletter.

Answers on a postcard please: why has Richael Hung's allocation of new shares gone up from 70 million in the announcement of 26th October to 277 million in today's new structure?

DH Gate puts prices up front

I met Celina Chen when she spoke on the same panel as me at ad:tech in Beijing a couple of weeks ago. She is COO of of which, I'm afraid to say, I wasn't previously aware.

This is a catch-up week and I've just looked. It's a very interesting twist on the B2B sourcing model as it focuses very clearly on the small scale transaction. Prices are up front on all pages and the basic product listing leads you straight through payment and shipping options. A couple of sample clicks showed that you can go down to lots as small as 5 electronic picture frames worth $150.

It's clearly shooting at a buyer/seller level much lower than the main target of Global Sources and is much more transaction-oriented than Alibaba. Global Sources has tried to target this segment with its Global Sources Direct service, but that doesn't seem to be a key focus for them.

Global Sources Direct scores 36,105 on's rankings. DHGate is at 6,153. Hmmm. Acquisition target for someone?

P.S. They have a very neat sourcing blog as part of the site on which DHGate executives post.

Thursday, November 08, 2007

Kenfair suspended again

Our favourite coal mining and trade fairs conglomerate, Kenfair, has just announced that it has suspended its shares again. Having missed the market's 30% rise when they did the same thing in late September, pending acquisition of the coal mine (!), they now seem set to miss the ride back down.

This time they say the suspension is "pending the release of an announcement in relation to placing of new shares which is price-sensitive in nature". You have to wonder whether there is anybody at home running the trade fair business don't you.

Wednesday, November 07, 2007

The right price?

Citibank has upped its price target for Global Sources to 40x 2008 projected earnings. That pushes the price target about $10 above its current position to $45.

A similar valuation would imply that, even 9% down as it is today, Alibaba is over-valued by about 3.5 times. And that's based on very optimistic projections for next year. So, look to buy only when the price drops below HK$10 if you think Citibank's advice on GSOL is of any value.

Sent via BlackBerry.

Update: There's a bit more in-depth comment on the Citi report here at Seeking Alpha.

Alibaba moves into events

They now, of course, have enough money to buy the whole Chinese coal-mining industry (see here if the reference isn't clear to you). So far, however, it seems that our friends at Alibaba are going to stick to their core business and focus on providing B2B media services.

As expected, and frequently denied, the company is already moving into organising events. These may not yet be fully-fledged public trade fairs, but that is surely the logical next step. Thanks to Eddie Choi for pointing me to this link on the Alibaba site regarding a Shenzhen private buyer event for Woolworths next week. It notes "More Big Buyer sourcing events will be announced in the near future".

Mind you, they'll need to get an awful lot of Woolworths buyers into Shenzhen meetings with 220 suppliers to justify a market cap of (as we write) of US$23 billion. Heck, they could probably buy Woolworths, take control of the whole Australian supply chain and still have change to spare.

Tuesday, November 06, 2007


I just looked. The Ali-money machine just hit $37.85. This is getting quite surreal and long ago parted company with any connection to reality. Fundamentals? Shmundamentals. Mental.
Sent via BlackBerry.

$10bn in trades by lunchtime

Midday saw Alibaba volume hit 336.88mn shares. That's suggests well over HK$10bn at the $30 - 32 range in which most of the morning's action has been taking place. That's US$1.3bn in old money.
Sent via BlackBerry.

Alibaba at HK$35!

My colleague Mark is keeping us up-to-date by SMS on this topsy-turvy news:

Aibaba at HK$35!! Market Cap US$23 billion
Sent via BlackBerry.

Buckley heading home

I had completely missed this news but, as it makes a refreshing change to magic carpet puns, I'd like to note it now. We'll update our thoughts on the Ali-IPO later in the day as the trading unfolds.

Warren Buckley has been CEO at Suntec Singapore for the past seven years but will be returning to Canada at the end of the year to resume his previous position as CEO of PavCo (BC Pavilion Corporation), the Crown corporation responsible for the Vancouver Convention & Exhibition Centre (VCEC) and BC Place Stadium. The VCEC is being substantially expanded in advance of the 2010 Winter Olympics and Buckley's marketing nous (Suntec has won several international marketing awards under his leadership) will be welcomed there.

Buckley is quoted as saying: "I've had the chance to travel and work around the world, but there really is no place like home. Vancouver is one of the world's most popular convention and meeting destinations, and the current expansion of the convention centre, which is scheduled to be completed in March, 2009, is certainly capturing the imagination of meeting planners at home and abroad. As a result, this is a great opportunity to come home and help take our local convention and meeting industry to the next level."

As far as I'm aware, there's no official word on Buckley's successor in Singapore. I'm not a gambling man but, if I were, a small flutter on his suave #2, COO Peter Idenburg, probably wouldn't go amiss.

Monday, November 05, 2007

HK$ 'peg' secure from Ali-IPO

Last week we asked whether the Alibaba IPO could break the Hong Kong $:US$ peg. At the time, we didn't think so and today Bloomberg confirms that the Ali-IPO was not the secret "open sesame" code that speculators have been seeking for so long (and with such spectacularly little success). The piece notes:

Investors needed Hong Kong dollars to order shares in the Chinese Internet company's $1.5 billion IPO, the biggest for an Internet company since Google Inc.'s 2004 offer.

And Alibaba was just one of the 33 companies that sought a total sum of HK$69 billion ($8.9 billion) last month from overeager investors. This demand for Hong Kong stock worsened a demand-supply mismatch in the city's currency.

I have to say, even in the grown-up world of big boys' financial markets, that $69 billion sounds like a lot of money to me.

Anyway, it seems that the worst we can now fear is columnists and analysts playing fast with Alibaba jokes for a few more days. So, this Bloomberg piece had the "open sesame" crack. Today's South China Morning Post had the old "and what I want to know is where are the 40 thieves" variation. I suppose we'll have to wait 'til Europe wakes up for some saucy puns about Scheherezade.

New BSG report released

There's a press release over on our Corporate Blog with details of a new report we've just published on Having, along with most of the rest of Hong Kong, received a zero allocation, I shall simply be an interested bystander with my fingers in my ears tomorrow morning to prevent hearing loss caused by the loud pop.

Mind you, with the Hang Seng down 4% so far today (-1,244 points to 29,225 at the moment), I wonder how long it will stay up there?

Friday, November 02, 2007

Asia highlighted in new Weitzner role at CMP

Folio magazine reports that Steven Weitzner is stepping down as CEO of CMP Technology in the USA to take on a new role as head of international M&A and business development. It's clearly a bit of a surprise as no replacement has been announced and the parent company's CEO, David Levin, will be taking on an interim chairman role while the search goes on.

What caught our eye was this paragraph:

In his new role for CMP Technology, Weitzner has a large playing field to work with. "As an organization, UBM's got over a quarter of its business in Asia. We've got substantial and fast-growing businesses in India and China," says Levin. "And in old Europe there are opportunities as well, so Steve has an open field to look at."
It's not quite clear how that all fits into the tri-partite CMP family (with CMPi in the UK and CMP Asia based in Hong Kong). We shall watch with interest.

Greens attack advertising too

If you thought I was exaggerating when I wrote yesterday about the impact of climate-change protests on business events, take a look at this piece from FIPP, the magazine publishers' association, on initiatives in Brussels to clamp down on car advertising. It notes:

By adopting the advertising and labelling part of this report, the [European] Parliament supports the idea that car ads should devote a fixed amount of space (20 per cent) to public policy messages.

This report contains six paragraphs on advertising and labelling requirements for car advertising that would infringe on the freedom of commercial communication, as they suggest how the car industry has to inform the consumer about environmental aspects of the advertised car.
It's not hard to see this extending to airline advertising and then to advertising promoting travel to international events. Happily, most of the world does not share Brussels' perverse enthusiasm for regulation and we probably won't be seeing anything like this in Asia for the foreseeable future. But many of the Asia B2B industry's clients are much closer to that unholy alliance of Eurocrats and climate change nutters and may well be affected by it.

Thursday, November 01, 2007

Is the events business taking the air travel threat seriously?

One key take-away from both the UFI and ICCA meetings from which I've just returned: the business events industry (exhibitions, conventions, conferences and other meetings) is only waking up to a huge threat very slowly. Reed Exhibitions' Nick Forster mentioned it at UFI and the Pacific Asia Travel Association's Peter de Jong at ICCA: it's not the threat of terror in the skies, miserable major airports or surly security personnel. It's the growing focus on the environmental lobby on air travel as a significant contributor to global warming.

This issue does not seem to have taken hold of the consciousness of anybody in the industry in Asia in a serious way. They are merrily marketing in the assumption that people will continue to get on 'planes in ever larger numbers and keep the business humming along. In the short term, and particularly for local and regional business in Asia (as budget airlines explode relatively late onto the scene here), this may be true. But longer term, I am concerned that most seriously under-estimate the challenge.

PATA's de Jong noted that the mainstream travel industry is fighting a serious rearguard action against knee-jerk legislation on this issue, especially in Europe. But it seems clear that we can expect higher 'carbon' taxes on air travel and, perhaps, demonstrators outside major events like the ones who camped outside Heathrow this summer.

Be aware and beware. The level of environmental awareness in the meetings and events industry is pretty pitiful. That will have to change.