CEA Focused on Growing CES Asia, Not on Expanding CES Brand, Says Shapiro

Plans haven’t advanced beyond 2016 due to local scheduling practices, including the opening of an additional convention center on the other side of Shanghai, Chupka said. The massive SNIEC complex has been largely booked, but will free up as the government moves some of the government-owned trade shows to the new convention center, making possible more booking opportunities further in advance, said Chupka. CEA picked Shanghai “because we felt it was the right place” due to accessibility to attendees outside of China and a good selection of hotels at various price levels. “Our intention is to be here as long as it’s here,” she said.

Trade shows space is measured differently in China from the U.S., said Chupka. In China a booth space is measured in gross square meters. In the U.S., “you have to have aisles so you can only sell half the space because the other half has to be aisles,” she said. CES in Las Vegas measures show floor space by net square feet, representing actual number of booth units sold, but the actual space consumed is double that because of the aisles, she said. CES Asia comprised 20,000 gross square meters, or 9,500 net square meters, which translates to roughly 102,000 net square feet at a U.S. trade show, she said. The 2015 CES in Vegas closed at 2.35 million square feet, she said.

Rather than comparing the size of the first CES Asia with the 48-year old U.S.-based CES, CEA preferred to say the Shanghai show drew more attendees than the first CES held in New York in 1967. Responding to our question on whether CES Asia can rival the size of the CES in Las Vegas, Chupka quipped, “It took us 48 to get as big as we are,” but it’s China, “so maybe 10.”

When CEA announced CES Asia last summer (see 1407170067), it initially projected an exhibitor list of 300, not the 200-plus announced last week in Shanghai. Chupka said the discrepancy was due to companies taking larger booths than expected.

We noticed while surveying the show floor during trade-only days what seemed to be a large proportion of consumers playing with gadgets and traveling in groups. CEA planned to open the show floor to a limited number of consumers on the third of the three-day show. Chupka told us that business is handled more casually in China, making it hard to tell by appearance who is in the trade. Post-show questions to CEA about the percentage of consumers -- or whether attendance numbers -- changed appreciably on Day Three weren’t answered by our deadline. CEA plans to have final attendance figures back from a third-party auditing firm in six weeks.

Among preregistrants, 50 percent were from mainland China, 25 percent elsewhere in Asia and 25 percent from other parts of the world, weighted to the U.S., said Chupka. The ratio met CEA’s goal of reaching an international audience, she said.

We asked CEA President Gary Shapiro during Q&A in a media briefing if CEA had any concerns about CEA Asia's cannibalizing attendance at CES Las Vegas. “No, it’s a big world with a few billion people, and we recognize that not everyone can get to Las Vegas," he said. But Asia is "such an important region … China does not have a quality event … and we hope to grow CES Asia to the size of the Las Vegas CES in the next 10-20 years.” He conceded some companies may choose one or the other -- especially due to the attendance cap CEA put on the Las Vegas show -- but said, “There’s definitely a need for this event.” He cited challenges to international attendees going to Vegas including currency fluctuations and travel and said, “There are all sorts of reasons why it’s better for us to have two major events in the world. How each one impacts the other, we can’t predict.” He added, “If we hadn’t done this, somebody else would, so it was important that we have the quality type event that our customers and our members wanted.” The demand for CES Asia was driven by member companies, he said.

Not every company can come to the U.S., and the same for China, said Shapiro. On whether CES Asia is the beginning of a larger expansion of the CES brand, Shapiro said, “We don’t foreclose anything.” CES Unveiled, like the recent one in Paris, has been “phenomenally successful,” and CEA often gets requests from countries around the world to have CES events. “But there’s a myth governments have that you can somehow take what we do in Las Vegas and magically replicate the same size, scope and experience anywhere in the world,” he said. CEA is “very protective” of the experience and quality it provides attendees and is busy for now growing CES Asia, said Shapiro. For 2015-2016, “We’re not announcing any major new shows around the world,” he said.

The consumer portion of CES Asia isn’t set in stone, Chupka told us. “When we met with companies, they expressed a need to have some interaction with consumers,” she said. Unlike in the U.S., there aren’t a lot of opportunities for companies to do branding, she said. “They have to go out and do their own things to bring in the end user,” she said. CEA picked a work day to open to consumers to make the crowd more manageable, and sold tickets in advance, although people were able to walk up and buy a ticket to get in, she said. “That will be something we’ll watch to see how much people valued that or not,” she said. There was no cap on consumer attendance, she said. Preregistration numbered just over 3,000 consumers, after “extensive premarketing” in Asia online, on TV and in newspapers, she said. Ticket costs translate to about $16, she said. There are no plans to open CES Las Vegas to consumers because there’s not the same need for brands to connect with consumers, she added.

We noticed at numerous booths that portable products -- such as Bluetooth speakers and headphones that could easily slip into a backpack or pocket -- weren’t anchored to anti-theft devices as they are at CES in Las Vegas. “There’s a different cultural element to things like theft,” said Chupka of the Chinese market. When CEA talked with exhibit partners about security scenarios, they found that “what we as U.S. organizers are worried about is far different from what they’re worried about” in Shanghai, she said. She cited typical U.S. concerns such as fire, terrorism or “if a white powder is found” as examples. “We have to go through every scenario of every bad catastrophe that’s happened” over a period of time, she said.

In China, officials told CEA, ‘We just have to be careful that the crowds don’t start rushing each other,” said Chupka. Metal stanchions outside kept people in queues as they waited to get in. The other concern in the China market is knifing incidents, Chupka noted. All attendees had to put their bags through X-ray machines before being let onto the show floor. Another cultural difference was the attitude toward wait time, she said. Consumers are more than willing to wait three hours to get into a new Disney store, but those wait times don’t translate to a trade show setting where attendees have to be able to get past long lines to make a business meeting, she said.

Innovation was one of the criteria for exhibitors, which were grouped into 14 categories at CES Asia, said Chupka. Categories included automotive, health and fitness, smart home, wearables, home entertainment, robots, drones, 3D printing, software, mobile devices, content and online, gaming and green technologies. CES capped accessories makers because “one of our fears was that we could easily fill a hall just with accessories, and then we just would have been like any other show.” Both U.S. and Asian companies were turned down as exhibitors because they weren’t qualified, she said, and about 40 percent of the companies exhibiting at CES Asia haven’t shown product at CES.

A common practice at Chinese trade shows is a discount for national companies, with foreign companies paying a higher rate to exhibit, but CEA Asia fees were equal for all attendees, Shapiro made a point of noting before one of the keynote addresses. A 9 x 9-square-meter booth unit was roughly about $3,000 to exhibit at CES Asia. In Vegas a 10 x 10-square foot booth would be about $3,500 for members and $4,200 for nonmembers, Chupka said. Audi, which had the keynote the night before the show opened, had the largest booth at CES Asia, which Chupka translated to roughly 5,000 square feet. CEA limited booth sizes “because we didn’t want companies to overinvest in first year” and to manage expectations versus investment, she said. Next year, it will let companies go up to about 7500 square feet and the equivalent in square meters, she said.

CEA hopes to grow exhibit space next year to three halls, up from the hall and a half it consumed this year, said Chupka. One other trade show -- for the die and cast industry -- was held concurrently with CES Asia.