Nepcon Shanghai 2006

A mature trade show for a mature market...

You cannot fail to see that, despite the numerous faults of the Everbright Exhibition Center, Nepcon Shanghai seems to grow and grow in both size and importance.  Perhaps this is because of the growing importance of the Chinese market or perhaps because of the success of the Nepcon brand in Asia.  Either way, China and Nepcon China are close to the top of any global marketing manager's list of "must see" events.

By faults of the venue, I mean the lack of air-conditioning, the number of cables and air pipes running through the aisles and the general lower quality of the stand construction.  However, these are just observations and do not detract from the value of the event...  I just wonder if there is a better, more modern venue available for Nepcon to hold the event?

Today started with a fairly extensive schedule of press conferences, including a breakfast launch of the Siplace 'D' series machine.  This is a prime example of the significance of the Chinese market in more than one area.  Firstly, it is no surprise that Siemens chose Shanghai to launch this product.  Perhaps more interesting through, is the clear influence of China in the development of products like the 'D' series.

Setting the scene for the launch, Harald Mieth, President and CEO of Siemens EA China, explained that Siemens were first active in China 134 years ago and set up their first representative office in 1904.  100 years later and Siemens turn over more than RMB44Million and employ 36,000 people in more than 70 businesses.

Siplace has seven sales locations, eight service centers, three training facilities, one technology center and one laboratory and demo center.  All in all, these account for more than 250 employees in China.

In launching the 'D' series, Siplace are bringing to the market a product that has many of the technological breakthroughs of the 'X' series launched last year, combined with a lower cost flexible conveyor system...  For more information on the Siplace 'D' series see (The new SIPLACE D-Series - http://www.emsnow.com/npps/story.cfm?ID=18332)

It is clear that this is just one example of the increasing influence of the Chinese buyer in the field of product development.  As I continued to meet people, I heard more and more of the demands of the local Chinese market and how these demands had affected product development over recent years.  China has evolved into a market which is not just growing is size, but also in sophistication.  Companies here are keen to buy quality equipment and have very specific demands of what that equipment should offer.  Where perhaps five years ago, a Western product would be modified for the Chinese market, it is more likely now that products developed with the Chinese market in mind are adapted to suit the needs of the rest of the world.

Not all about price...
It seemed that a couple of years ago most equipment makers believed that they could compete in China with a cut down low cost version of their machine.  However, this strategy was not as appropriate as anticipated.  The Chinese contract manufacturer wishes to build world-class products and wants to build them efficiently.  To this end he understands the need to invest in the best products and, whilst cost is important, it is only a factor considered alongside performance...

This desire for quality has meant that many Western companies are doing well in China and have earned themselves a substantial share of the market.  Experience plays a huge part in this, as does the clear commitment they have made to become part of the industry here in China.

It is no surprise that those companies that have succeeded in China have shown a very high level of commitment to the region.  Some are actually manufacturing here, some have close links with local academia and other have developed a network of service and support that is as strong as they have anywhere in the world.  I guess the highest levels of commitment are shown by those companies that actually have Chinese businesses run by Chinese executives.

It is only by integrating into the industry that these companies can compete with the domestic equipment manufacturers who are not always encumbered by the high cost of product development.  Having said all that, it is impossible to ignore the domestic Chinese companies and their growing range of products.  It is absolutely apparent that these products have come a long way over the last year in terms of both technology and build quality.

As the equipment manufacturers develop their business models here, the consumables companies are doing the same.  Many suppliers of solder, chemistry and other consumables have grown and continue to grow their operations in China.  In some cases, this extension of the Chinese activity is at the expense of other regions, including other parts of Asia.

China is a huge country and as such cannot be covered from a single facility.  I spoke to a multinational chemistry supplier today who pointed out that it has more than twenty representatives in the USA and has just signed with its second in China.  Clearly some progress will be required here to develop a network that covers the whole region.  What is also clear is that certain regions are developing differently and what works in the South, around Shenzhen, may not work in Shanghai or further north around Beijing.

You only need to look at a map to see that China as a manufacturing region has a long way to go.  And you only need to attend a show like this each year to see how fast the market is developing and how sophisticated and competitive it is becoming...