Will KINTEX’s growth end with the construction of phase 3?
최종 수정일: 2022년 7월 26일
Conference for Goyang city as a MICE destination (July 27, 2022)_Discussion Paper I
The construction of KINTEX's phase 3 is not just another extension. It is the completion of KINTEX's vision to become Asia's best convention center through the construction of the 3 phases of KINTEX which it had held since its launch in 2003. In other words, the construction of KINTEX's phase 3 is like the final puzzle of the grand master plan. That may be why the name of the winning work for the 3rd venue plan of KINTEX is "KINTEX the Grand."
Since the opening of the first phase in 2005, KINTEX has continued to grow. Although there have been ups and downs, including Covid-19, the past 20 years are precious time that enrich the experiences of construction and operation of convention center and MICE business, which are even mentioned as a success story in the global convention center business case studies.
However, we can easily find the answer why KINTEX has been succeeded until this time. KINTEX has made a monopolistic growth through economies of scale that could not find a competitor in Korea. KINTEX's main marketing strategy was to utilize a unique space of 100,000 square meters to achieve both large-scale and internationalization through the integration of small and medium-sized exhibitions. If KINTEX had been a small and medium-sized venue with a size of 20,000 to 30,000 square meters, such growth would not have been possible. But the future will be a completely different competition. Jamsil MICE Complex in Seoul will be born with an exhibition space of more than 100,000 square meters, and another convention center with an exhibition space of more than 20,000 square meters is currently being built in Magok, Seoul as well. Exclusive growth through economies of scale that KINTEX had is no longer possible.
Ironically, however, KINTEX secured the right to operate the Jamsil MICE complex with Hanwha Consortium last year. It seems to be a good thing in terms of KINTEX's business expansion, but it won't be happy for KINTEX when the Jamsil venue is completed. If Jamsil and KINTEX operate on a similar scale, the number of large KINTEX exhibitions could go to Jamsil, or even copied events would be opened too. It is true that Jamsil has an advantage not only in size but also in transportation and cultural infrastructure in its competitiveness with KINTEX. Moreover, it should be considered that this increase in the exhibition space that KINTEX has to operate in the Seoul metropolitan area could have a negative effect of carnivalization without a discriminatory management strategy between 2 venues. Of course, KINTEX will devise various strategies such as cooperation with global exhibition organizers, but we need to think about new management strategies in preparation for the future era of super competition.
First, KINTEX should completely go beyond its position as a MICE venue. Considering that MICE participants' movements lead to local business tours and local cultural experiences after the MICE visits, KINTEX should expand cooperation with local cultural content companies beyond the current MICE area. Currently, cultural and business companies such as CJ E&M, SBS A&T, Sang-am MBC, and Magok LG Town are located within a radius of 20km, that is, within a 30-minute drive, centering on KINTEX. Through cooperation with these media companies, KINTEX should transform into a cultural content company mixed with MICE business. This is because MICE participants no longer want to get just information or buy products, but want special experiences at off-line venue. In an era where everything is connected online, if offline venue cannot give 'reason to go there', the convention center will inevitably become an off-line business behind the era of the future experience economy.
Second, KINTEX should consider a program with Goyang City to increase the stay time of MICE participants beyond simply evaluating venue with the number of events or the number of visitors. Even though 10 million people visit KINTEX a year, there is no reason for Goyang City to do MICE business if they stay for just a few hours and leaves for another city. It is the basic law of all venue marketing that consumer spending increases only when stay time increases. Therefore, setting and implementing performance goals for MICE participants to increase their stay in the city together with local governments will be the way to increase the economic effect of MICE city.
It's time for KINTEX to capitalize on the knowledge and experience of venue contents beyond just hardware completion to create a new revenue model. And it will only be possible if it goes beyond the MICE.
Finally, KINTEX should transform itself into a data company, not a hardware operating company. Venue is a database where numerous companies and buyers make transactions. Exhibitions and conventions around the world are now turning into 1 to 1 customized businesses that combine big data and AI. The era has already arrived that analyzing the personal information of visitors and recommending booths and seminars to visit and connecting them with participants with similar interests. Combined with this data, AI makes visitors no longer have to wander in the vast exhibition hall.
Now it's time for KINTEX to capitalize on the knowledge and experience of venue contents beyond just hardware completion to create a new revenue model. And it will only be possible if it goes beyond the MICE.
©VM Consulting
Korean version
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