Doug Emslie is the MD of UK-based, internationally placed Tarsus Group. He catches up with EN to discuss his company’s growth trajectory, emerging markets and why exhibition organisers need to get back to the visitor.
How did you get into the exhibition industry?
I came into the industry 18 years ago on the finance side when I joined Blenheim, which was the biggest global exhibition organiser at the time. Blenheim chairman Neville Buch was the first to recognise exhibitions were brands that could be bought and sold and he created a very exciting market place. I was there for three years until the company was taken over by UBM then stayed on for 18 months as the businesses came together. What was interesting was that Blenheim had bought lots of other companies and it was the first time I was on the other side of that experiencing how things change.
Buch then set-up Tarsus and asked me to be the first employee. We had a small amount of money in the bank and no exhibitions, so we invested in a public company and started to build the business. Over the 12 years we have been in existence, we have done five major brand acquisitions. Unlike Blenheim, which was a creature of its time and had over 200 exhibitions in 50 different markets, what we wanted to do with Tarsus was to be smaller and nimbler. We also wanted more than just exhibitions including the magazines, conferencing and Internet properties relating to that sector: Rather than be a mile wide, we were going to be a mile deep.
What was your first exhibition brand?
The first business we bought was Labelexpo, which had three exhibitions in Brussels, Chicago and Singapore and a UK magazine. That business has developed into 10 exhibitions, the magazine is in numerous languages and there are lots of other products including conferences.
In 1999 we bought a discount clothing business in America, which a lot of people had looked at but didn’t want to buy as it was a tent in the middle of the desert in Las Vegas. Most people wanted to be in high-end fashion, and our purchase was before the low-end market became what it is today.
Now, about 40 per cent of all clothing in America is bought through discount retailers and our trade show has grown dramatically as a result. It has been a very interesting acquisition because we saw that market early, and we have benefitted from its growth.
Our next step was France in 2000 and we have built our business into the third largest there. When the recession hit in 2001, we stopped acquisitions and it wasn’t until 2006 that we made a big acquisition of a medical business in America focused on anti-ageing. That has been the biggest purchase to date at US$50m (£30.72m). In 2007, we also bought the Dubai Air Show and we’re now one of the top four organisers in the Middle East. Going forward, what we want to do is build more of our business in emerging markets including the Middle and Far East.
Was there ever an intention to build significant business in the UK?
We have a small business in the UK but the UK exhibition market is a bit like the UK car market: You are only ever going to make money if you’re at the top end, niche or you have a lot of volume.
Was there a consistent strategy behind picking which markets to enter?
What we like are markets where there are lots of dynamic changes going on, or geographical change. In the low-end clothing market for example, we could see it was going to be a growth market in America and go mainstream. In the medical market, as people are getting older and richer, they are more interested and proactive about health and prolonging their lifespan. Aviation’s big growth markets are the Middle East and Asia and that’s where we are.
Will you look to take existing show formats into emerging markets?
We will adapt to suit the region. In the Middle East our business started off with eight shows and now has 11 and there is scope there to achieve more organic growth. We have opened up an office in Abu Dhabi and have 2-3 launches we are looking at now. There are also opportunities to take our brands into other areas within the Middle East such as Egypt, Turkey and Saudi Arabia.
Another market we are excited about is China, where we have three businesses: Our wholly-owned business; a joint venture business with 24 exhibitions in central China with a company called Hope; and a partnership with World Expo. That is a very immature market and there are lots of opportunities to launch shows. What is happening is a lot of the manufacturing is moving out of Shanghai and Beijing and moving into the centre as they have surplus labour and it’s a lot cheaper. We see that as a very interesting dynamic change so we got into that market early.
There are some fantastic facilities now in central China.
What’s the biggest business lesson you’ve learnt?
The biggest lesson to learn with exhibitions is to always stay close to your customers. The problem as companies get bigger is that they become more removed from their customers. Our ethos is to spend a lot of time not just with exhibitors, but to also stay close to and understand the buyers.
Ultimately, buyers determine where an exhibition goes. As an industry I think we forget that because we spend 95 per cent of our time flogging space to exhibitors, then 5 per cent worrying about getting buyers to come to the exhibition.
Additionally, you have to be aware you’re going to get lots of competition, especially in new markets. The year after we launched Labelexpo in China we had four competitors. The strength we had was that we were taking international companies to Chinese buyers. If you’re an international company and a Chinese organiser who can’t speak English is trying to pitch to you and take your money in advance, it’s not a great place to be. We had the trust of international customers as we had a brand that had performed for them for 30 years. But you also shouldn’t be scared to tell your customers it’s new for both of you. Being honest helps.
How important is it to find yourself a partner?
A lot of people go into new countries and create partnerships and that helps a business move quicker in the early stages. The problem with partnerships as they mature is people forget where they started and who had the power in the beginning; it might not be the partner with the power at the end. My experience of partnerships is you get half the profit for double the hassle. We are careful about setting up JVs and in places like China it’s quite important, but it doesn’t mean you can’t do it yourself. We were told we couldn’t launch Labelexpo by ourselves but we did and that gave us a lot of confidence.
Is that the same with acquisitions?
It depends. In China, we bought 50 per cent of the JV business because we wanted to be certain that the next time we turned up, the partner had a financial reason to be there. It hasn’t grown as quickly as we thought, and a lot of that has to do with our approach to business versus the Chinese approach. They interpret growth as launching lots of shows, which might be not profitable. We would rather grow what we’ve got.
In emerging markets, I think we will see a lot more companies doing 50:50 or 60:40 joint ventures rather than acquiring 100 per cent, whereas in the West full acquisitions are normal. What we have done is been successful in buying businesses created by entrepreneurs and keeping those entrepreneurs on-board.
Besides selling space, what other ways does Tarsus look to bring in show revenue?
I’ll use two different examples. The majority of revenue for Labelexpo comes from space, then we sell sponsorship, advertising in the magazines. In our medical business however, 50 per cent of revenue comes from conference and exhibition and 50 per cent is from education programmes.
Two-thirds of our revenue is now coming from doctors who are visitors to the event and only one-third comes from exhibitors. We have gone from three exhibitions in America and eight education programmes to 23 education programmes and we’re looking at 35 this year.
What do you see as the exhibition industry’s biggest challenge?
The challenge facing the UK market is that it’s relatively small in exhibition terms and high-cost. Innovation within the industry has slowed down dramatically because of its maturity. People are still launching products, but the growth is going to come internationally.
UK organisers are the leaders in creating or extending brands abroad and there are large and small companies with strong international businesses. That presents a big opportunity for contractors to follow the organisers, as they have good UK relationships. We have done a deal with Melville for example where we use them in Europe, the Middle East and we have a tie-up with parent company GES in America.
The big opportunities for venues meanwhile, are to attract international shows to the UK. Excel has been successful in doing that over the past year and the ICC will help attract more to London.
The final challenge everyone is facing is talent. Historically, people fell into exhibitions. We have got to compete with other media forms to get young talent to make our industry their first choice. Once people come into our industry, they rarely leave and there’s a reason for that. We haven’t been good at educating people outside our industry about how good our industry is.
How far do you think virtual events and technology will go?
Where it’s gone wrong – and people have admitted this – is where you try to create the same environment digitally you have physically. What our customers want is information and the ability to continue conversations they’ve had at an exhibition. The educational content will be what drives the virtual event.
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