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Hitting the China Bullseye
As a pioneer in developing trade and exhibitions in the Mainland, Adsale has never lost focus of its goal
The business bookshelves are crammed with tales of innovation, new business models, and technology breakthroughs promising huge financial returns for following the latest management fads. Yet one of the golden rules of business that many of them fail to even mention is "focus."
"You have to be focused, this is one of the strategies of our success," says Stanley Chu Yu Lun, Chairman and founder of Adsale Exhibition Services Limited.
Adsale, which celebrates its 30th anniversary next year, was a pioneer in developing the Mainland's export and exhibition industries when Deng Xiaoping left the door ajar in 1978. The company published the first guidebook on doing business in China after the Cultural Revolution, and held its first trade exhibition in the country as early as 1980.
Today, Adsale organizes about 20 international trade exhibitions in China, with the largest being Chinaplas -- the world's third largest plastics industry exhibition.
Ironically, Adsale wouldn't even exist today had Mr Chu and his friends not started their business when he was on the brink of losing his job 29 years ago. Their success is testimony to Hong Kong't can-do spirit stir-fried with a healthy pinch of luck.
"When I left university I wanted to be a teacher, so I took up a post in a secondary school teaching mathematics. Three or four years later, my throat couldn't take the strain of lecturing, so I had to quit and find something else to do," he explained.
One day he bumped into an old classmate who was also between careers. They met up with three other friends, and the five of them decided to go into business together.
"We rented a small office of about 300 square feet in Wan Chai and we tried to decide what to do," he continued. "We had to think about survival, about how to get business, but because we had no connections in business, basically no money, and no business experience we found it difficult to come up with a plan."
Eventually, they decided to become a media rep, but with no experience, no company agreed to let the young entrepreneurs represent them. Eventually, the Hong Kong Wen Wei Po agreed to let them serve as a media rep. At the time, left wing newspapers in Hong Kong were quite isolated, and the paper was a mere shadow of itself today. Undeterred, they put together a few supplements for the Canton Fair, and produced a magazine called Technova for foreign companies looking to sell technology to China, which was at the time still considered a land of mystery.
Then in December 1978, Deng Xiaoping announced that China would open its door, gradually, to the outside world. Soon, the whole world had caught the China bug and Adsale quickly expanded into a media and translation agency to serve international clients trying to sell their products and services in the Mainland.
"We would go into China to visit factories and distribute magazines that we translated for our clients. At the time, all advertising in China was banned as it was only 10 years after the Cultural Revolution, so the only way was to hand deliver these supplements to companies," Mr Chu said.
In 1979, the first advertisement in 12 years appeared in the Tianjin Daily edition of Wen Wei Pao, which was for toothpaste. Mr Chu took this as a sign that the advertising market was about to spring back and spent two months in China visiting all the major media to sell his company as their overseas ad rep. However, he ran into brick walls everywhere he went. The Shanghai Advertising Agency had placed the toothpaste advertisement only after signing exclusive agreements with all media in China.
He sought help from the Shanghai Wen Wei Pao, and they agreed to give Hong Kong Wen Wei Po and Adsale 10% on ads and squeeze another 15% off for commission to the Shanghai Advertising Agency. He wrote a press release on the deal, announcing that Adsale and Hong Kong Wen Wei Po had the connections to help companies publish their advertisements in China. International media got wind of the news, and soon after Dow Jones' VIPs from the Wall Street Journal (WSJ) held a meeting with Adsale and Wen Wei Pao, and agreed that the Dow Jones would represent Wen Wei Pao and Adsale's Technova magazine worldwide.
It turned out that Dow Jones was more interested in selling its ad space than placing ads, but Adsale did manage to sell 16 pages of advertising in supplements in the WSJ to support the three trade exhibitions that China took to the United States in 1980.
"Those ads generated thousands of trade enquiries from U.S. firms who wanted to follow up with the Mainland companies. Soon, all the leading economic dailies around the world wanted us to become their exclusive media rep for China," Mr Chu said. "We compiled all the trade enquiries into a book, and went into China to ask state trading houses: 'There are so many people who want to buy Chinese products; do you want to advertise your products as well'?"
Mr Chu said many partnerships that resulted from those visits are still going strong today -- such as a big U.S. import company that found Tsingtao Beer.
"Basically, we had no competition, so we were mindful that we had to use that window of opportunity to establish ourselves. We also produced two books, 'The China Trade Handbook,' which was the first handbook in the market about how to do business in China, and because of our connections with the WSJ, we had it distributed worldwide," he said.
Expanding into the translation, advertising representation and publishing business had been a shrewd move, but the partners knew its growth potential was limited. As a small company, they were happy making a respectable income, but felt it was important to have their own products.
In the early 1980s, the company organized its first exhibition in China to provide a bridge between foreign companies and their Chinese customers. Li Peng, then Vice-Premier of China visited the Adsale's Energy Show in 1986 as large scale international show were so rare, and Adsale soon became known as the pioneer in organizing trade shows in China.
Realizing trade shows had a strong future, the company decided to move its focus from the translation business and to concentrate on developing the China exhibition business.
"The translation business had served us well, but we wanted to focus on exhibitions, and also publications as people participating in shows wanted to advertise their products," he said. "The market never matures, but every product/service has its life cycle and that is just what had happened with the translation service that we provided."
Is the exhibition service nearing maturity? Mr Chu thinks not. Exhibitions in China are still taking off and he sees a strong future in the sector. But it has to incorporate new ideas and innovations based on the changing need of exhibitions and visitors.
"You have to allocate all your major resources to the sector which you believe has the greatest potential for expansion. In this way, you can build up your edge over your competition. Spreading yourself too thinly dilutes your focus, your services and with it your business," he said.
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