— With what kind of activity did you begin your professional career?
— At Clermont-Ferrand University, from where I graduated in 2006, I received a grounding in Economics and Management. But I didn’t want to work as a hired-hand in a bank or any other private establishment, I wanted to work for myself. What seemed attractive to me were emerging markets. I packed a suitcase and set off for South America. For four years, I lived in Argentina and Chile. I was giving consultations on investments.
— How did you come to be in Russia?
— One day, my friends and I were having lunch in a café in Buenos Aires. At the table, a conversation started about innermost desires. I said that I wanted to go on a round-the-world trip and visit as many countries as possible, one of which had to be Russia. Soon, I found out that the French financial group Groupe Crystal needed a manager for their Russian branch. I applied, and I was accepted. At age twenty-eight, I set off for Moscow.
— What were your first impressions?
— A state of collapse and chaos! We flew in to Sheremetyevo International Airport, where hundreds of passengers had been standing in the queue for passport control for several hours. The luggage was coming out to a terrible crush… The terminal hadn’t yet been reconstructed at the time. The hotel which had been booked was in the South West of Moscow. In order to get there, we had to drive for ages along the Moscow Ring Road. The Russian capital appeared most uninviting to me then.
But then my impressions changed. I discovered that Moscow is a reasonably dynamic city, and the people here are open and warm-hearted. I noticed that the public transport system was excellently organized. Also in Moscow, there are a lot of cafes and restaurants where you can grab a bite to eat. It is a big enough city for there always to be somewhere to go and something to see. Overall, I realised, that I wouldn’t be bored here.
— How did your business contacts develop?
— In the main I was working with French people and didn’t have any close contact with Russians. My objective was to find people of means and make suggestions as to where best invest their money. After two years of working in Moscow, the company was in the good position it finds itself in now. They decided to promote me and sent me to work in Luxembourg. I managed to work in that small sovereign state for only a year, before I was drawn back again, to Russia. I had managed to “become attached” to Moscow, where my friends were, where the character and nature of people was as if drawn from the novels of Dostoevsky and Tolstoy. It was then that I realised that for effective communication it was nevertheless best to know the language.
— How difficult did the Russian language turn out to be for you?
— Russian isn’t difficult, but to be able to speak it takes time. At first I was learning it from a textbook. Then I realised that wasn’t working, so I started learning with a teacher.
– In Russia, as in Europe, competition is stiff – the market here is already formed, and introducing something fundamentally different is not so easy. Which is why we have recently been witnessing small exhibitions being consolidated into much larger events, leading to improved quality and great profitability.
In the global exhibition business, much in the choice of location comes down to market conditions. There are two ways in. The first is organic: where before a new event is brought to the market, the foundation for organizing the future event is created. In such a case, we are talking here only about staff recruitment, and spending on publicity and renting of the exhibition area. The rental cost depends on the concept and scale of the exhibition. This constitutes the main item of expenditure for the organizers.
For example, the International Bus and Coach Show “Busworld Russia powered by Autotrans”, first put on in the autumn of 2016, brought Russian and international manufacturers of passenger transport vehicles together in the one place in Moscow. Development of the exhibition is carried out by ITEMF Expo, a company set up by us in tandem with ITE Moscow in 2015. The idea behind creating ITEMF Expo was to develop exhibitions with an automotive theme – COMTRANS and Busworld Russia – based on the experience gained by hosting MIMS Automechanika Moscow. The benefit of setting up a joint company speaks for itself: Messe Frankfurt has experience in international sales and brand promotion, and ITE has great expertise on the local market.
The second way in is derivative, or the acquiring of an event already well-known to the market, as part of a strategy to develop а company geographically or in terms of its product. Example – the Light+Building exhibition in Frankfurt and the purchase of Interlight Moscow as part of developing the brand in Russia. With the derivative approach, the company invests in the project or in the whole business. The amount of investment needed is calculated using the DCF (Discounted Cash Flow) method. Internal policy, without a doubt, has an effect on the evaluation criteria. The capitalization range of an exhibition company is very broad. Major players are valued in billions.
In my opinion, Moscow will retain its status as an attractive exhibition city. Many organizers launch their projects right here in a city where there are functional exhibition complexes, international transport links, and where there is international business going on.
— Was starting your own business difficult?
— In 2013, in a Moscow café, I met Patrice Le Lann who has great experience in organizing exhibitions and conferences in Russia, Poland, Ukraine and the UAE. We started to think: why not organize an exhibition in Moscow for foreigners? I was convinced that expats really don’t know much about the city they are living in. Often, they can’t think where in Moscow they could find an international school for their children, or a good dentist or clinic where the staff speak English. They ask themselves what they can do with themselves at the weekend, how to organize their leisure time, or, let’s say, where, under the sanctions, to find good cheese. They could ask their friends or… go to an exhibition with lots of companies under the one roof, and find out all the necessary details.
Patrice Le Lann became my partner. We set up the company Expolife Group, the office of which is located in a business centre in Gamsonovsky Lane.
— How much did you need to invest?
— Generally, to start a business in Russia, you need to invest around ten thousand euros in it. My partner and I put a substantially larger amount into our large-scale project than that. We had to hire spacious areas and attract qualified staff.
The first Foreignerslife exhibition/forum took place at the World Trade Centre in February of 2016. 120 companies took part. I must admit that getting them to come along wasn’t easy, as this is a new segment for them. As for the visitors, there were around 10,000 of them. They were mainly expats who brought their wives and children with them. For the first time, they were able to get answers in the one place “straight form the horse’s mouth” to questions regarding various services: education, healthcare, sports clubs, producers and distributors of food and other goods. Our event became a “window into Russia” for foreigners working in the capital or preparing to start their businesses here.
– On the subject of the state of the exhibition trade, one has to understand that Russia’s share of the global market is no higher than 2%, whilst Germany’s is 70%. The share of GDP of Russia itself for this sector amounts to a mere 0.044%. This is lower than in most large European countries, and points to how undervalued the industry is, and to how much room there is left for its development. For example, in Britain, in terms of GDP, the exhibition industry makes up 0.072%, in France it is 0.061%, and in Germany – 0.051%. Nevertheless, Russia still finds itself in step with worldwide trends.
According to information available to us, including that from specialized sources abroad, there are over 270 operators active on the Russian market for exhibition and convention services. Leading in Russia in terms of numbers of venues is Moscow, where around 62% of the total number are concentrated. In second place is St. Petersburg with 11%, with the other regions of Russia making up about 27%. Each year, around 140,000 Russian and 30,000 foreign exhibitors take part in trade fairs. The main organizers of these in Russia are ITE, Expocentre, Crocus Expo, RESTEC, and Messe Düsseldorf. They have a 55% share of the market.
The downturn in the economy, and difficult geopolitical situation, could not but have an effect on Moscow’s exhibition business. 2015-2016 observed an overall decrease in all key indicators: there was, on average, a 20–30% reduction in the amount of space rented, and number of exhibitors and visitors.
A seasonal examination of exhibition and convention events for Moscow highlights its busiest and quietest times. So, what can be considered a lean period in terms of business events is summer. In June, the number of events is roughly the same as in May (8 and 9% respectively), and the share of events conducted in July and August, taken together, come to only 2%. Spring is what could be called the “height” of the season – the total share of events put on from March through to May inclusively comes to 40%. The most popular months for putting on business events are March, October, and April (17, 16 and 14% respectively).
— Tell me, how did you select the right premises?
— We didn’t have any problems with that. Moscow has many complexes suitable for hosting large-scale exhibitions. I just had to get there, discuss it, negotiate, and sign the contracts.
After the Foreignerslife-2016 exhibition, in May, we put on, in the Hotel Baltschug Kempinski, an exhibition dedicated to men, Gentlemen’s Life. Visitors were successful men with an eye for quality clothing, prestige accessories, who strive for irreproachability in all things, and love refined forms of recreation. Telling people about their goods and services were representatives of the largest gent’s outfitters, shoemakers, barbers, watch brands, and specialist clubs. As part of the exhibition, there were masterclasses featuring experienced wine experts, cigar experts, men’s clothing designers, barmen, chefs, and stylists.
I am convinced that the interest in such exhibitions is only set to grow. People like to find out about goods and services under the one roof. In April of this year, at the Central House of Artists, opposite Gorky Park, the second Foreignerslife exhibition (for 2017) has already taken place.
— Who are your competitors?
— As regards Foreignerslife, we are the only ones who put on such an event. In March, at Expocentre, a trade show for professionals in the beauty industry, Esthetic Life-2017, took place. This is a theme better known and more familiar to residents of the capital and its visitors. And obviously, we have competition in this sector. But our company Expolife Group uses ground-breaking concepts. Which is why our shows are always one-of-a-kind.
— How many people work at your company and how did you select the necessary personnel?
— We selected people who rather than raising a problem would suggest ways of solving it. The main requirements for the job are the aptitude and desire to learn. Only last year, we had but two people working with us and now there are twenty. They are all Russians with higher education. I can safely say, that if they enjoy working for the company, then they are prepared to “move mountains” for it.
— What is the level of their salaries?
— 60–70,000 roubles per month. Sales Managers also receive sales bonuses. Those employees can earn more.
— And you also lecture, too. You deliver your own course at The Russian Presidential Academy of National Economy and Public Administration (RANEPA), given over to investments in the private sector. Are your Russian students different in any way from their western counterparts?
— This is now the third year I have been lecturing. I was recommended for this position by a friend. First, I conducted a masterclass at the academy, and then the deacon suggested I give classes. I would say that students throughout the world are the same: there are those who sit in the front row and soak in everything that is said, and there are the lazy ones who hide in the gallery so they can do their own thing.
— What is there that is different about the Russian market for investments?
— Russians keep a lot of cash at home. It has to be said that here the standard of banking consultancy is very low. Russian investors are looking for the opportunity to invest abroad, they put their money predominantly in overseas property.
— You give investment advice. Can you give a couple of examples of this?
— One client wanted to make sure he had enough money for when he retired. I advised him to invest funds in commercial property in France. He took out a loan from a French bank at 1.5% per year, bought a property which he now rents out, and in such a way is paying back what he borrowed. I advised another Russian to buy an old flat in the centre of Moscow, do it up, and then sell it. The profit on it was 50%.
— How much do you pay yourself in rent?
— At first, I was renting a flat of fifty square metres on the Arbat and was paying sixty thousand roubles a month for it. After working for five years, I moved to flat on Bolshaya Dmitrovka, it was a spacious place, two hundred square metres, and the rent per month was three hundred thousand roubles. Now I live in Chistye Prudi. My place is a little smaller, but as for how much I am now paying, I wouldn’t want to broadcast that.
— To what extent, in your opinion, is Moscow an expensive city and a safe city?
— In Moscow, I find it remarkable that you are offered quite a wide price range for the same products and services. You can save money if you want to. At the same time, as I see it, the Russian capital is a safe city, although I have happened to hear quite a few horror stories. I haven’t personally encountered any negative situations even though I travel around it a lot: out to the dormitory suburbs on public transport, too.
— So, let’s sum up. Is it still worth going to Moscow to do business?
— Of course, it is, despite the fact that the economic situation in Russia at the moment isn’t ideal. There is a certain amount of uncertainty and, with that, risks. But on the other hand, where there are risks, there is the potential for reward and success. The Russians have two excellent proverbs on the subject: “If you are scared of wolves, don’t go into the forest” and “He who doesn’t dare, doesn’t drink champagne”. Also, it is often in times of crisis that the best ideas come. It doesn’t matter what kind of business you start in Russia. You can open a pizzeria, café, or shoemakers, of which there are thousands in Moscow, but you will succeed if you do your work with quality and do it better than the others. You should have a product or service of the very highest quality, at a price which is lower than that of your competitors.