The Next Big Thing?: India: a 'New Frontier' in Waiting

By Michael Hart -- Tradeshow Week, 4/4/2005

Like a movie star who becomes an overnight sensation after decades of playing bit parts, India is on a path that began in 1992 to what one American show organizer describes as "the new frontier" in the developing global market.

Still, with a limited (and aging) inventory of exhibition space, a growing (but not quite grown-up) middle class and a national infrastructure that limits easy international travel to just a handful of cities, the Indian tradeshow industry is a few years away from what could be its glory days.

Nevertheless, there are preliminary indications that the tradeshow world's attention is turning to the nation of 1.1 billion people that a Goldman Sachs study predicts will by 2050 be the world's third-largest economy, behind China and the United States.

"Certainly, there is a movement to explore the market," said Michael Duck, senior vice president of CMP Asia, "much as people did with Russia six or seven years ago and China 10 years ago."

Indeed, there is evidence of Duck's assertion. Indian business opportunities for show organizers and venue operators will be the subject of a session during the UFI Summer Seminar this June in Lake Como, Italy. IDG World Expo President David Korse expects India to be the site of the next installment of LinuxWorld. And new exhibition centers are either under construction or under consideration in a number of Indian cities, including New Delhi and Bangalore.

But the Indian tradeshow industry has a long way to go before it reaches the current overheated state of China's industry.

Prem Behl, founder and managing director of Exhibitions India, said things started to change in 1991, when a new government in New Delhi began to systematically shed its socialist underpinnings by reducing regulatory control and dismantling tariff and export restrictions.

"Before that, India's economy was closed," Behl said.

A government-controlled trade fair authority previously organized shows itself and compelled would-be competitors to apply to it for operating licenses.

"More often than not, they did not give you a license," Behl said.

It was the forerunner of today's India Trade Promotion Organisation, which is still the largest organizer of trade fairs in the country, but certainly no longer has a monopoly. It still owns and operates India's largest exhibition venue, the Pragati Maidan Exhibition Centre in New Delhi, which sprawls over 149 acres with 668,000 square feet of exhibit space spread through 16 different halls. Most of the buildings were built by the former Soviet Union more than 40 years ago.

As government restrictions loosened in the early 1990s, Indian officials took note of what was going on in China.

"People began to realize that the old economic principles were not really conducive to growth," Behl said.

As a result, the scene was set for India to become the economic powerhouse it is now becoming. Its economy has grown at a 7.4-percent annual rate since 1994 and its "middle class" contains about 300 million people. Of course, the term is relative, since an outsourced software programmer in Bangalore makes $10,000 a year, compared to his or her counterpart's $62,000 salary in the United States; an Indian call-center worker earns $3,000 a year, compared to $27,000 in the United States.

Perhaps more significantly, what market analysis firm Datamonitor calls the affluent wealthy class is growing by a rapid 17.6 percent each year. While there were only 618,000 Indians in that category (individuals with at least $50,000 in investible assets) when Datamonitor last counted at the end of 1993, it will be well over 1 million by 2008.

"These are the people growing the economy," Behl said. "There is a huge amount of disposable income there."

Behl started his company in 1987. Over the years, he has worked with a number of foreign companies interested in investigating the market, including Reed Exhibitions, Montgomery Exhibitions and Messe Frankfurt. Behl has also launched a number of shows himself, both at Pragati Maidan and hotel exhibition halls in New Delhi and Mumbai. He put on six shows in 1994, primarily in the telecom, IT and finance sectors, and will mount five this year.

Likely to be of interest to IDG World Expo is the Manufacturers' Assn. for Information Technology's prediction that annual personal computer sales in India could reach 22 million units by 2010, perhaps eight or nine times the number sold today. Intl. Data Corp. projects spending on computer peripherals will grow 14.7 percent a year to $1.3 billion in 2008 — twice today's level.

"It's an extraordinarily IT-literate country," Korse said, "so the LinuxWorld brand is very promising." In fact, he expects to soon announce the launch of the first conference and show in India for 2006.

But there are problems.

"There is a lack of reasonably modern venues," Korse said.

Pragati Maidan is definitely not modern. Only about 235,000 sq. ft. of the total 668,000 sq. ft. of exhibit space is air-conditioned.

"New Delhi can be 40 degrees C. (104 degrees F.) in the summer," he said. "It's hard to work."

Mumbai's largest venue (the second-largest in the country), NSIC Goregoan, is an old textile factory with 645,000 sq. ft. of exhibit space, none of which is air-conditioned.

There are new halls in Hyderabad and Chennai, and more are planned in other cities. But India's eighth-largest venue is a sports stadium that occasionally doubles as exhibition space, and numbers 9 and 10 are hotels.

Besides the lack of space of the type Western show organizers are accustomed to, there are other significant infrastructure limitations and ways of doing business that one must catch on to quickly.

"Caveat emptor (buyer beware)," said Duck. "You need to use much the same phrasing when you go into the Indian market."

But, as Duck pointed out about his own company, which has focused primarily on mainland China and Hong Kong in recent years, "We certainly see it on our radar screen. The very nature of our business is to take people into new markets so, yes, it is of interest."

Montgomery Chairman Sandy Angus agreed that the underdeveloped nature of India's exhibition industry is exactly why it is important. "It is certainly on the verge of a quantum leap as organizers from all over the world turn their focus on this enormous developing subcontinent," he said.

Angus, the 2006 chairman-elect of the Intl. Assn. for Exhibition Management, added that he would encourage the establishment of the group's Certified in Exhibition Management program, if it hasn't already been started before he takes office.