─ What did you start your business in, in Moscow, way back in the 1990s?
─ In property: that sector was experiencing a great boom at the time. Everybody was buying, selling or building something. But nobody was trying their hand at selling overseas property to Russians. This is what my first company dealt in. We offered Russians properties in Spain, Turkey, Costa Rica, Panama and Thailand.
About Kim Waddoup
Alumnus of Cranbrook Grammar School in Kent, Kim Waddoup has been living and working in Moscow since 1992. Set up aiGroup in 2002, specialising in hosting trade exhibitions and other commercial and public events. Regular organiser of the real estate exhibitions The Investment Show and The Property Show in Moscow and St. Petersburg, the Moscow MICE business travel forums, and the Moscow MedShow and Moscow SpaShow medical exhibitions. Founded IPC Russia in 2003, dealing in property, and turned aiGroup into a holding company. In 2007, set up the Luxury Network Russia, providing marketing support to Western luxury brands on the Russian market. Has been publishing in Moscow the English language magazines International Residence and Moscow Expat Life since 2011.
─ Are you still involved with property?
─ Yes, it is an important aspect of aiGroup. Furthermore, it crosses over with our other business: organising trade exhibitions. We have already held 22 International Property Shows and 14 Investment Shows in Moscow, as well as 12 exhibitions in St. Petersburg. Aside from which, we publish a property magazine, “International Residence”, and the portal “1-property.ru” is ours too. We also arrange medical and business tourism exhibitions. In addition to all of which, we publish the magazine “Moscow Expat Life”: which is my pet project.
─ Yet aiGroup is best known as the main player on the MICE market. Incidentally, what does that stand for?
- Meetings, Incentive, Conferences, Events: i.e. organising meetings, incentive tourism (tourism as motivation for employees with elements of training included), conferences and events. We conduct MICE forums, exhibitions and conferences on incentive, business and medical tourism. These are industry events in Moscow unique to this segment.
─ Medical tourism is not so widespread. How did you get into that? Where is it that Muscovites go for treatment?
─ I began to become involved in medical tourism in Moscow in the middle of the 1990s when I had small spa business in Austria. We transported high-ranking clients, including government figures, to the foothills of the Alps, to mineral spas. But we did have other clients. We helped victims of the Chernobyl disaster in particular.
Today’s Muscovites go mainly for treatment to Germany, Israel and Thailand. India and Korea are popular as well. On the international market, different countries specialise in different branches of medicine. Thailand, for example, has great specialists in cosmetic surgery. Russians go on up to 70,000 medical tours a year.
─ Who are your clients in Moscow? Wealthy people?
─ No. The middle classes. A large middle class has already developed in Moscow. The streets are full of nice cars: many families own two cars. The restaurants are full. It is precisely this middle class which is the main target audience for our exhibitions, the Moscow MedShow in particular.
A large middle class has already developed in Moscow. It is precisely this middle class which is the main target audience for our exhibitions.
─ And what is the situation with business tourism?
─ That is also developing rapidly. Russian companies are striving to widen their sales market, to become integrated with the global economy. Many send their employees abroad on courses and for training. If you value your employees, paying them a high salary is simply not enough. You can always find someone who will pay you more. You have to care about your staff. Taking them abroad for the New Year holidays or for training is a good way of increasing loyalty. And it really isn’t that expensive. MICE generates a great interest in the business for me, and the Moscow International MICE Forum is very successful.
Aleksei Boyarkin, Managing Director of “Bizneskom”:
— The Russian MICE market is growing at an above-average rate. In 2013 growth at a level of 12% was recorded, whereas this figure worldwide is no more than four per cent. What is also important is the fact that the world average share of MICE in the GNP is 1.3%, but in Russia it is only 0.3%. That is, the Russian MICE market is in the stage of being formed, and it is logical to suppose that new players, including Western ones, will soon appear in it. Of course Moscow and St. Petersburg are the main MICE centres in Russia. The Russian capital has more than 50% of the market turnover in this segment, St. Petersburg has 14%, and the rest are big cities with a population of more than a million.
One of the central events of this sector is the MICE forum held by the company aiGroup. At these forums it is apparent how rapidly this form of business is developing. Whereas a few years ago the Russian market suffered from a lack of MICE facilities up to international standards, this problem has now been solved, including with the aid of representatives if the Western hotel business.
─ Many competitors?
─ In business tourism there were quite a few competitors but they have almost all exited the market. Only the strongest players are left, ourselves included. There are some good conferences held on medical tourism but they are strictly within the confines of B2B. But we put the emphasis on B2C. We try to avoid direct competition. We never operate according to the mantra: “Oh, that’s not a bad idea. Let’s do that too”. We try to come up with something of our own, to distinguish ourselves from our competitors, and we prefer to launch a business when the market is only just starting to develop.
─ Tell us in more detail how you established aiGroup. Why did you decide to move into organising exhibitions?
─ I was running a tourism business, it grew, but so did the offers. Competition came down to the simple principle of: “What price did they offer you? I’ll do it for you 10% cheaper”. That’s not my style. So, I began to look into other market sectors. I had already entered the overseas property market by way of tourism. And I discovered that there were absolutely no related exhibitions or magazines in Russia. I already had a Russian business partner, and we had been working well together. Young and ambitious. He brought a few more people with him: his friends from MSU. Some very talented programmers and designers.
It was, in its own way, an “East-West” axis. I was the “West”, giving the company Western concepts of business: demanding the highest quality and, especially important to service, the principle of “the customer is always right”. With us, everybody smiled, even though in Moscow at that time the only people who smiled were the girls at reception desks of expensive hotels. The Russians were the “East” and brought with them their fantastic university education and the capacity to make off-the-wall decisions.
─ Did you take out loans, look for investment?
─ No. We didn’t take out loans then, and we don’t now. We invested our own money only. Our first office was ghastly: I was ashamed to receive people there for meetings. But it was cheap and we had to minimise our costs at the time.
─ What was the hardest thing of all at the very start?
─ Not having enough faith in the future. I had invested everything in a new business, we worked hard, but the surrounding realities didn’t always inspire optimism.
I had invested everything in a new business, we worked hard, but the surrounding realities didn’t always inspire optimism.
─ Where did you put on your first exhibition?
─ In the foyer of the Penta hotel. Now, we arrange all of our exhibitions at the exhibition centre in Tishinskaya Square. The place suits us down to the ground.
─ How did you recruit your staff?
─ We placed an advert: “Students who can speak good English and know how to smile are invited for temporary work at an exhibition”. Over 100 turned up. We put together a great team, the majority of them women. At the exhibition, they were dubbed Kim's Angels. They still work for us now.
Elena Kostenko, head of the estimates department of “BK-Arkadia” Co. Ltd.:
— According to expert estimates, the turnover of the industrial exhibition market in Russia amounts to about $350,000,000 per annum. Today, 42 exhibition brands of 16 Russian organizers have been accepted into the UFI – The Global Association of the Exhibition Industry. UFI accepts exhibition brands which play a considerable role in the development of the economy of a country or region and which meet international standards. The main exhibition sites in Moscow are “Crocus City”, “Expotsentr” and the All-Russian Exhibition Centre. All the leading industrial exhibitions are held in these three. Experts link the prospects for the development of the exhibitions market to those of the Russian economy as a whole. The growth of each industry always leads to an expansion of exhibition activity in the relevant field.
By comparison with the Western market, I believe that at the level of the top exhibition centres, there are no significant differences in the way business is done. Organizing an exhibition requires, as a minimum, premises (exhibitions are usually organized on leased sites), the development of a corporate identity (cost from $2000), the development of the site (from $3000), and a good advertising agency to attract visitors and participants to the exhibition. At least $30,000 will be needed for organizational expenses.
─ Is the whole of your business located in Russia?
─ All of our business is international, and all of it is based on the Russian market. We – me and my colleagues and partners – often perform the function of a unique bridge between East and West. Before the Olympics, we were asked a lot of questions on Twitter and by mail: “But what’s it like over there in Sochi, is it possible to travel there, is it not dangerous?” We patiently explain. Russia is not like the States or Great Britain: it is different. But it is possible to live, relax and work here.
─ How many people are there on your staff?
─ Eighteen permanent. Some work remotely. Myself included. I haven’t been into the office for two months but all our affairs are perfectly in order. Of course, for important exhibitions or other key events, we are all present.
─ Do you have a Russian partner?
─ Yes, we have been together for 13 years now. A lot of people at the company have been with us almost from the very beginning: staff turnover is minimal. As well as them, for specific projects, the very same exhibitions, we take on up to 60 people on a temporary basis. We call students. Do you want to gain experience? Come along. I do a lot of it myself. Guidelines, decisions made over dinner in expensive restaurants: that’s not my style.
Guidelines, decisions made over dinner in expensive restaurants: that’s not my style.
─ Would it be simpler or more complicated running the same business in a different country, in England or Austria?
─ Now, I wouldn’t even begin to try. The market in Austria and Great Britain is over-regulated. There, everything was all carved up long ago. But when I started out in Moscow, there was a blank canvas here. Got an idea? Get out and do it. Now, of course, you have to be careful. Calculate everything meticulously. Establish a solid legal basis before launching a business. It has become safer, cosier. But it has lost something. Many don’t understand Russia and say that doing business here is extremely difficult. It's not possible to understand Russia from behind the window of a limousine or a taxi. Go on foot and you will fathom something. Some foreigners who come to Moscow are scared of going on the metro because they have been told that it’s dirty and dangerous in there. Rubbish! I go by the Moscow metro all the time.
It's not possible to understand Russia from behind the window of a limousine or a taxi. Go on foot and you will fathom something.
─ Your office is in a prestigious part of Moscow. Is that important to your business?
─ No. It’s just that it’s a five minute walk from my flat. Clients rarely turn up here. Usually all matters are dealt with over the internet.
─ You are the organiser of the Moscow International Golf Show. Do you resolve business issues during a round of golf? Or is it purely sport for you?
─ Purely sport, recreation. My golf, by the way, is not up to much. I don’t like how golf is developing in Moscow. There are courses but exclusively for the elite. Golf should be more democratic.
─ Do you like living in Moscow?
─ I have been in Moscow for many years and have always greatly enjoyed it in this city. But I’m not overly fond of the Russian winters. Maybe my age is catching up with me. So I prefer to sit out the colder weather here in warmer climes. But I come back to Moscow all the same.