Shanghai Expo seen as giant business opportunity for companies, countries

By Elaine Kurtenbach, AP
Sunday, May 2, 2010

Shanghai Expo giant opportunity for big business

SHANGHAI — China’s commercial capital of Shanghai has always been all about business. Nowhere is that more evident than at its World Expo, a giant bazaar of ideas, technologies and outright PR offensives focused on the world’s fastest-growing major market.

In a cash-strapped 21st century of market meltdowns and big bailouts, the Expo, which opened to the public this weekend, is a multibillion dollar business opportunity that has yielded massive contracts for design, equipment and engineering firms.

Since they started out displaying new industrial technologies alongside new design and cultural offerings in the mid-19th century, world’s fairs have always been something of a global marketplace in miniature.

With China’s economy growing faster than most and poised to soon overtake Japan’s as the second-biggest after the United States, the Expo’s role as a venue for networking and marketing is bigger than ever before.

“It gives everyone an excuse to come to China. It’s going to be parties and receptions and networking and mingling and looking around,” said James McGregor, a senior counselor for consulting firm APCO Worldwide Inc. and author of the book, “One Billion Customers: Lessons from the Front Lines of Doing Business in China.”

Given China’s growing status and power, even crisis-stricken Greece and Iceland went ahead with plans to stage pavilions, wary of the costs of lost opportunities in this huge and growing market.

“We’re getting the word out that we stand for so much more than just maybe the headlines about the financial crisis and ash closing down the airports in Europe, we have other things to offer,” said Hreinn Palsson, Iceland’s consul general in Shanghai and its Expo commissioner general.

“We’re using this event and these facilities to establish connections, establish a point that companies can come to and work out of here in China,” he said.

Corporations both Chinese and foreign are also here in force. Cisco Systems Inc., Coca Cola Co. and General Motors Co. have pavilions built on a scale to match some of the biggest countries. Chinese shipbuilders, appliance makers, telecoms companies and food providers — practically everyone with a stake in China’s huge market is here.

While organizers and participants have rarely disclosed contract terms, the event is proving a windfall in hard times for many, with its official budget of roughly $28.6 billion and many billions more spent on new subways, roads, airport terminals and other trappings of affluence, not to mention the huge sums spent by participating countries.

Spending just by tourists during the six month event is forecast to reach 45 billion yuan ($6.6 billion), according to Chinese state media.

“It was clear from our first meeting with the Expo organizers that this expo would be very different to the ones in the past. China was going to give it a special recognition and it would become a big global event,” Coca Cola’s CEO Muhtar Kent said in an interview.

“Our brands benefited substantially by being part of Chinese priorities and aspirations,” Kent said of his company’s involvement, as a longtime Olympics sponsor, in the 2008 Beijing Olympics. With the company’s “Happiness Factory” Expo pavilion, “We thought this would be a wonderful way for us to showcase what we are doing in China,” he said.

The construction of more than 200 pavilions on the Expo site brought in scores of foreign design, architecture, engineering and equipment companies, hired both by China and by participating countries.

“The whole Expo is our pavilion,” quipped Richard Hausmann, president and CEO of Siemens China. The German company is a sponsor and contractor for lighting systems and building technology and equipment in 40 projects at the Expo and also a key supplier for Shanghai’s subway and railway projects, among many others.

Many of the 189 countries with pavilions at the Expo are likewise showcasing their own manufacturers and giving corporate sponsors an opportunity to reach the expected 70 million visitors to the six-month event.

Behind the public viewing areas, most pavilions have luxurious VIP lounges for sponsors keen to use the chance to polish their “guanxi” or connections, with potential clients.

“It’s a fabulous opportunity for business-to-business, business-to-government and government-to-government networking,” said Bob Rogers, chairman of BRC Imagination Arts, whose company is handling the U.S. pavilion’s design and programming.

The USA Pavilion, which struggled to raise its $61 million budget from recession-strapped companies since it is not government-funded, allotted an entire hall to its corporate sponsors, who include such big names as General Electric, 3M and Wal-Mart.

Canada threw 45 million Canadian dollars ($44 million) into its “C” shaped, timber-slatted pavilion, which was designed and programmed by the Cirque du Soleil. And they recruited Mark Roswell, a.k.a. “Dashan” — a Canadian television personality famed for his fluency in Chinese — as its host.

“This is not a tourism promotion but a branding kind of thing,” Roswell said recently while meeting visitors in the pavilion’s elegant VIP lounge, equipped with a special kitchen manned by a prominent Canadian chef, Wayne Murphy.

Cirque du Soleil put together an interactive program focused on the Expo’s “Better City, Better Life” theme of urban sustainability for the pavilion.

With its focus on futuristic lifestyles and technologies, the Expo has been a gold mine for service-oriented companies like Cirque du Soleil and other purveyors of creative programming.

David Atkins Enterprises of Collaroy, New South Wales in Australia, produced the extravagant outdoor fireworks, lasers and fountains performance for Shanghai’s Friday evening celebration of the Expo’s opening.

“Having done this has been incredibly beneficial in terms of having a footprint with an event of this scale as our first project in China,” said Atkins, whose company also produced the opening ceremonies for the Vancouver Winter Olympics and the Sydney 2000 Summer Games.

“It’s very important for us strategically in terms of where we want to go in the region,” Atkins said.

Associated Press writer Christopher Bodeen and researcher Ji Chen contributed to this report.

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