Business Beyond the Reef

• I guess you want to be careful about currency reforms.  North Korea executed a party official this week for screwing up a reform of whatever passes for currency in the country.  Could this be why Beijing is so resistant to change?
• Faced by Asian competition and shifts in fashion, Swiss watch makers have redesigned and repositioned their products – and their exports are beginning to boom despite the recession.  Some good lessons here for all exporters.  I know I love my Swiss watch: slender, light with the clearest clock face I have ever seen.
• Have you noticed that, whenever China gets bad publicity about its products (e.g., dairy products laced with melamine, or improperly handled vaccines), they start criticizing other countries’ goods?  The latest is an attack on the quality of luxury products supplied by Hermès, Hugo Boss, Versace, Dolce & Gabbana and Tommy Hilfiger, among others.  Aside from the fact that I never feared for my life (only my fashion sense) due to a Hilfiger shirt, doesn’t this criticism come from the world’s top producer of counterfeit luxury products?
• Ah, mercantilism.  Such a lovely word.  I was amused to see Germany’s reaction to French charges against Germany’s trade surplus.  They say that criticism by the French is a compliment.
• It’s nice to see your stuff get picked up elsewhere.  Thursday’s post about Hawaii tourism (Selling Hawaii – or Not) was picked up by ETurbo News and I have been getting good feedback.
• Amid all the dour news about U.S.-China relations, the two countries reached agreement Thursday to re-open the Chinese market to U.S. pork exports.  China had used swine flu as an excuse to close its pork market in 2009, shutting down $275 million in U.S. sales.  It’s back on for now.
• Anybody interested in selling renewable energy equipment in China needs to look at the report issued by the National Foreign Trade Council last Monday: China’s Promotion of the Renewable Electric Power Equipment Industry: Hydro, Wind, Solar and Biomass.

Honolulu has a business problem that afflicts many cities of similar size around the world.  Local trade shows are really rinky-dink.  And few local businesses have a clue about what a truly great trade show is.

Customer Base

I am reminded of that this week as Germany’s huge CeBIT computer and telecom show gets underway.  Located in Hannover, a city in north central Germany with a population a little over half a million, CeBIT is the world’s largest trade show.  Trade shows are the major local industry and the Hannover fairgrounds has two dozen halls, each larger than the New York Colosseum. And Hannover hosts several such shows each year in other industries.  So do the other great German fairgrounds, like Frankfurt, Munich, Cologne and more.  CeBIT is smaller than it used to be, but still attracts more than 700,000 visitors, most of them real business prospects, to a middling town that doesn’t have the hotel rooms to hold them.  The show is also shorter, 5 days when it used to run for nine.  When I worked CeBIT in the 1990s, you made sure to wear comfortable shoes.

If you were in business, you also made sure to take your order book.  One year, the American exhibitors alone did more than $1.5 billion in sales – off the floor of the show!  That doesn’t include the orders that came in after the show closed.  We’re talking real money here.

CeBIT isn’t the only great show out there.  There are wonderful shows in Hong Kong, Singapore, Tokyo, Paris, London, Milan, Las Vegas, New York.  You get the picture.  Whatever industry you are in, there is probably a great trade show.  So is your company going to be there?  Why not?  Is your show experience with smaller, local or regional shows?  No wonder.

In Honolulu (or Denver, for that matter) a big show has maybe 200 exhibitors.  Exhibitors grumble that few business visitors come to the show, and they end up selling retail to customers they can get to in other ways.  Turns out most exhibitors are there because their local competition is there and questions would be raised if they don’t show up.  No wonder they get turned off by shows.

Don’t let the rinky-dink shows put your company off using trade fairs.  If you get the chance, stop in at a truly major trade show.  You won’t believe it.  They can even be fun.  (Nothing’s better than the Nuremburg Toy Show!) But watch out, the international food shows can be bad for your waistline.

How to do Business at International Trade Shows

If you want to learn to use the big shows for your business, take a look at my friend Doug Barry’s series of videos done at Hannover.

As an aside, I once had a conversation with John Dvorak, the tech columnist, about the COMDEX show in Las Vegas.  Most of the U.S. high tech industry thought COMDEX was huge and couldn’t be topped.  Dvorak said COMDEX was too big to do business.  I pointed out to him that CeBIT was twice the size of COMDEX and did more than twice the business.  CeBIT is still the place to be.  COMDEX is history.

I was working at the American Embassy in Bonn on November 9, 1989 and my family and I watched German television spellbound that night.  The unbelievable was happening.  The Berlin Wall crumbled and we were glued to the screen by the thousands of delirious Ossies (Easterners) coming through the Wall.  And I will never forget the equally delirious Wessies celebrating in Bonn’s town square.  I’ve been trying to collect my memories of that incredible evening.

Berlin November 9, 1989

My ambassador in Bonn was General Vernon Walters, interpreter for generations of U.S. presidents.  The Germans loved him, despite German being perhaps the worst of his fifteen or so languages.  Walters had been saying for months in the embassy that the Wall would come down.  Most of us thought the boss had gone round the bend.  Reports have it that Washington thought so, too, and Jim Baker apparently considered recalling Walters.  Dick Walters was vindicated wonderfully.

U.S. television should get some credit for bringing the Wall down.  My own commercial office helped sell U.S.-made series to German television, and most of East Germany could watch “Dallas” and other shows portraying the luxurious lifestyles they thought all Westerners were living.  Ossies wanted a piece of that action and some risked their lives to come across and get it.  I remember later speaking with a woman in Prague, who asked “We’ve been part of the West for a year now, so how come we aren’t all rich yet?”

West Berliners offered their eastern neighbors champagne or sekt when they came through the Wall, but the more enduring image was bananas.  Easterners could rarely find bananas and went, well, “bananas” for them.  Less evident on the TV screen, but just as attractive as the bananas, were the huge numbers of Easterners, male and female, who dove into the first Western sex shops they could find.  Freedom.

Some seized business opportunities.  That same evening as the Ossies were coming across, western Avon ladies were headed the other way!  Among the first U.S. exports to benefit from the Fall of the Wall was a custom builder in Florida who produced vans built with satellite dishes and office equipment so that western companies could operate quickly in the East.  West Germany was so desperate to augment the meager phone lines to the East that they actually broke the French monopoly on European satellite launches to hire McDonnell Douglas to put up a new communications satellite quickly.  Some of the commercial response rankles.  Pieces of the Wall went on sale to tourists almost immediately.  Many of those sold at the Brandenburg Gate or Checkpoint Charlie proved to be pieces of “a Berlin wall”.  Pick up a chunk of concrete, spray paint one side randomly, sell it to a tourist.  I have a piece in my office, but wonder if it is the real thing.