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The world economy is going through one of the worst recessions of all times. Consumer spending is down in many markets and discretionary spending is at abysmally low levels globally, including in the emerging markets. Certainly not the best of time for a huge expo showcasing consumer electronics and home appliance productsby all accounts a discretionary budget head for most.

Yet, that does not seem to have deterred the organizers of the worlds largest consumer electronics and appliances show, IFA, which is all set to be held from September 4-9, 2009, in its full fare. The annual show in Berlin, not too well-known in this part of the world, and actually far bigger than its American counterpart, CES held in Las Vegas, every year, started in 1924 with a keynote by Albert Einstein.

It is not that the show is completely isolated from the impact of the slowdown. For example, as of August 14, 2009, there were 1,049 participants from forty-seven countries, down from 2008 numbers of 1,245 exhibitors from sixty-two countries. But the organizers, Messe Berlin and German Association for Entertainment and Communications Electronics (gfu) claim that in terms of space booking, they would almost match the 2008 levels (1,22,000 sq mt of total rented display space).

Doing it Right
So, what ensures that exhibitors come to this event enthusiastically even at times like this? There are probably three reasons: the way it has positioned itself, the way it markets itself, and the timing of the event.

Its right positioning is by far the biggest reason for its success. Even with all the entertainment built in, IFA is positioned as a serious show for the exhibitors, the trade visitors and the public. While CES and IFA are held in different geographic regions and do not really compete head on, it is probably helpful to make this point by drawing a comparison. Both the shows sell themselves hard to the exhibitors, who give the big chunk of revenue. But analysts have pointed out that while over the years CES has done just that, IFA has spent significant time and money on selling to the visitors by creating demand among visitors by building right content. It is not that CES does not market to visitors but its positioning for them is to be the coolest place to be in. Its venue, Las Vegas, just reaffirms that positioning. So, for many visitors, it is a big carnival. That works in good times; in tough times, when discretionary spending is down, no one wants to go to a show just to be there, unless there is value for the money spent.

This cool positioning of CES also means exhibitors compete to showcase products which are some time away from hitting the market. That adds to the oomph factor but has no direct impact on sales. In fact, some analysts have pointed out that it makes consumers delay their purchase as they look for these products to hit the markets. In times like this, that is not exactly a good news for the exhibitors.

In terms of timing too, IFA is at an advantageous position. While CES happens in January, just after the spending season is over, IFA happens just before the festive seasons in most developed markets as well as China and India. And since IFA displays a lot of products that are ready to hot the market, it results in direct sales.

So, if economists see early signs of recovery in most markets, IFA at this time can actually act as a catalyst for the consumer electronics market.

Shyamanuja Das
shyamanujad@cybermedia.co.in

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