View of Shanghai Exhibit on Flooring Materials "Continuing Opportunity"

**View of the Shanghai Flooring Exhibition: A "Continuing Opportunity"** Date: April 6, 2015, 10:58 AM The flooring industry is a matter of life and death, and business is even more intense. Thomas Piccetti As March arrived, just like the fitness sector, the stadium construction industry entered its peak exhibition season. Whether it was artificial grass, precast tracks, PVC, silicon PU, or seating systems, these products were in high demand. Companies with a market scale of over 10 billion yuan were always the most sought-after participants at major exhibitions. During the two-day flooring materials exhibition in Shanghai, the sports flooring section occupied only one of the 14 halls, covering approximately 10,000 square meters—about one-third of the commercial flooring area. Guo Chao mentioned that many of the sports flooring exhibitors also participate in other large-scale events. The investment ratio between the Expo and other exhibitions is typically 68:32, which shows that we are still in a critical position regarding safety and stability. Even though they participated in the Shanghai Flooring Exhibition, top executives from leading sports flooring companies saw this as a warm-up for foreign clients. Their main focus would be on the upcoming Fuzhou Fair in May 2016, a professional event where domestic products are expected to dominate the market. With favorable policies gradually taking effect, the domestic market could expand by 5–10 times in the coming years. Most companies sent vice presidents instead of CEOs. In such situations, out of 300 business cards, only 30 might be valid. But at the Expo, 150 out of 300 cards were considered valid. There were many familiar faces, almost like a reunion. Vice presidents emphasized that the annual physical exhibition remains their top platform for promotion. CEOs rarely attend due to time constraints and high costs. So, the question arises: Do I need to attend every exhibition? Should I go alone? What can I gain? What will I miss if I don’t go? And when I do attend, what should I say to clients and the media? Last year, during a visit to three companies, this was a common concern among business leaders. A long-time exhibitor who has participated in the event for 11 years expressed confusion about how to present their marketing strategy and new products. They had an interpreter for foreign visitors, set up a booth, and brought a small amount of samples—but what message should they deliver to the audience and the industry? Is it the German-style complaints about service quality? Are there areas that leave people dissatisfied? Or is it about analyzing the future of the stadium construction industry? Some topics seem obvious, while others feel empty. So, what exactly should you talk about? The weather in Shanghai was nice lately, wasn’t it? Exhibitors’ ambiguity seems to reflect a deeper issue: Fifteen years ago, around 2001, the stadium construction industry was just beginning in China. Everything changed daily. Entrepreneurs who dared to produce products often struggled to sell them. When they finally made their first profit, they felt proud and celebrated. At that time, “Sports News” was full of bold statements and passionate stories. In 2008, the Olympic Games created a golden era for the industry. Many companies grew stronger, but with a sluggish global economy, competition became fiercer. Over the past few years, the industry has gone through ups and downs, gradually moving toward formal development. Today, the stadium construction industry is composed of 4–5 completely different production lines and marketing channels. It’s hard to understand and sometimes feels isolated. Yet, there’s no sign of crisis. As Ma Gejun, sales director of Dongxing Plastics, said, the domestic market is already large enough. Even a 10% share could make international expansion worthwhile. Therefore, at events like the Shanghai Flooring Exhibition, companies struggle to find a meaningful conversation. Hidden opportunities and risks now lie beyond the factory gates. Returning to the exhibition hall, walking through the crowd and sharing photos on WeChat, it's clear that national fitness and sports policies are favorable. The stadium construction industry is the key channel for tapping into the huge potential of future consumption. But who is making money in this sector? Will the artificial grass market, expected to grow with 20,000 football schools in the next two years, be the first to profit? For the short to medium term, the artificial grass market may maintain a comparable share with other segments. Zhou Yunxiang, CEO of a leading stadium seating company, agrees with this view. As economist Rostow wrote in *The Five Stages of Economic Growth*, when a society reaches a mature economic stage, the shift toward high-level mass consumption becomes inevitable. This includes durable goods and services that improve public welfare. In this phase, China’s focus will increasingly shift toward consumer durables and service industries. Therefore, before the high-consumption era fully arrives, the stadium construction industry—part of the durable goods sector—is likely to be the first to generate significant profits. How can companies renew themselves after seven years, extending their lifespan? This topic has been widely discussed in Chinese financial circles. Liu Chuanzhi, founder of Lenovo, wrote *Evergreen* before retiring. It sold millions and became a must-read for entrepreneurs. Yet, most exhibitors still ask: Why are we here? Do we hope to secure a prime spot in each exhibition? Do we want a chance to reinvent ourselves? In *In Search of Excellence*, Tom Peters and Robert Waterman identified eight principles for successful companies: action-oriented, customer-focused, innovative, manpower-driven, value-driven, independent, disciplined, and tolerant. But in China, the answer might be simpler: add eight words and dictate. In a complex and changing business world, change itself is a philosophy worth believing in. As Stigler noted, history evolves slowly, and business changes resemble fault lines across different stages. While technology can drive rapid economic growth, business evolution still depends on deep-seated mechanisms that take time to shift. Business ideas and ethics develop over long periods. At the end of this article, my mood was low. Nothing seemed to connect logically. But in that pavilion, what I saw and heard suddenly smelled of something new: the era of branding is approaching, and so is the price war. These two parallel trends may collide in the 2015–2016 channel landscape, possibly sooner than expected. Where, then, is the opportunity for renewal? On May 8th, in Fuzhou, the 2015 Expo may mark the beginning of the answer.

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