Why are these financial services companies offering trading consultancy and trade fair assistance?

In Hong Kong and Asia, much like the rest of the world, the financial services market is very competitive. Recently there have been many new start-up companies in the wake of the global financial crisis pertaining to offer you the best wealth management and financial services. These companies are mainly made up of individuals with a rich financial or legal background with a wealth of knowledge in the finance industries.

Many of them were made redundant by banks and investment firms or got out while the going was good. With the increasing number of these firms it is difficult to know who to trust, who to listen to and who to avoid. When it comes to trade and manufacturing issues, its best to look to people within the industry to get a clearer understanding of what is needed.

The Hook

Because of the increased competitiveness in the Asian financial services industry, some of these firms are looking further afield to find more revenue and work. As discussed in Part One, I have seen these ‘trade fair assistance services’ advertised and promoted by a number of local finance service firms and I wonder what extra they could offer over a local/international trading firm.

As far as I can see the answer is nothing. Based on the above case study, the client was given the bare minimum information they needed that they could have done themselves with very little extra effort and no extra cost. This is advertised as such to engage and find new clients to sign up to their own core financial services afterwards. For basically no extra effort and insight from companies like this you are getting no extra value for your money and instead, lining yourself up for a hard sell on:

•    Incorporation of Hong Kong or China companies

•    Virtual CFO

•    Company Secretarial Services

•    Visa Assistance

•    Trademark Registration

•    Tax Efficiency Structures

•    Offshore Banking Setups

•    Wealth Management

This is useful if you are considering setting up in Hong Kong or China, need tax efficiency structures or need financial services. However, for trade fair visitors, we go to look for products, suppliers and better solutions for our products.

Trade fair assistance is only truly valuable to you if you can have access to that extra local and international industry knowledge, trusted suppliers, extensive local experience and ability for solving technical and manufacturing issues. A trading company or trade consultancy would clearly offer the stronger partnership and assistance at a trade fair. This is vital if you look for trade assistance services.

Enjoy this, have you read Part One?

Also, check out our overview of trade fair assistance services.

These two industries are very different and just because a financial consultancy company operates in a certain geographical area, this does not necessarily make them experienced and knowledgeable in other industries. This is especially true when talking about technical solutions to trading and manufacturing issues.

Here is an excerpt from a case study I received in my mail box recently from a Financial Services Company:

CLIENT: A European based apparel importer and distributor who designs and sells high-quality clothing products to Europe, United States, and Japan.

PROBLEM: Our client struggled to source a niche product from a cost effective and high-quality supplier in China.

SOLUTION: Following detailed research into the client’s sourcing problem, XXX advised them to attend the Guangzhou Canton Fair, the largest trade exhibition in China where thousands of textile, fabric and garment suppliers can be found in one place. Before attending the fair, we arranged accommodation and transportation for the client and met with them to advise on local negotiating and trade fair customs. We also accompanied them throughout the fair and provided on-site assistance to overcome linguistic and cultural barriers.

Within the first 3 hours of attending the fair, the client sourced over 20 viable suppliers and was satisfied that they could evaluate, compare and sort out a great number of vendors in a time efficient manner. Being able to have face to face interaction with the right contact person, obtain product samples and negotiate prices all at the same time proved to be a successful solution to a problem that had previously caused delays in terms of time and money. Attending the right fair furthermore allowed the client to obtain more market insight and have a better understanding of the current position of their business in this region

I am confident that it cost this client a lot of money to have this financial service company attend this event with them. This company offered paid advice to a large international supplier of apparel to attend the Canton fair, a worldwide, internationally known yearly event that most markets know exists. It is clear to say going to the Canton/HK fair is very useful and allows you to meet face to face with suppliers and manufacturers. You are likely to meet many suppliers in your industry all offering similar items. It may be daunting as a first time visitor but seeking assistance and support for this should be provided by a trading company/consultancy as they can better serve your needs and requirements.

So what did this financial services company really do for their client in the way of trade fair assistance?

…met with them to advise on local negotiating and trade fair customs” and “We also accompanied them throughout the fair and provided on-site assistance to overcome linguistic and cultural barriers.

Most suppliers and manufacturers speak a basic English and are at this fair because of you, the client. They are there to accommodate you and make it easy for you to order. This is an annual, internationally renowned event where it is attended by people from almost every country on earth. People are specifically tolerant of each other’s religions and cultures. That being said, any visitor may need this to make them feel comfortable and help them meet their mandate.

…the client sourced over 20 viable suppliers and was satisfied that they could evaluate, compare and sort out a great number of vendors in a time efficient manner.”

As expected at a trade fair the client met lots of suppliers, however was then left to vet all the suppliers themselves and work out which ones were better than others and who could address their specific issue with no input from the financial services company at all! Surely they are just as likely to have been exposed to more mediocre suppliers that could easily have had the same industry problem and difficulty with whatever it was that they were looking to solve in the first place! How has this helped or assisted the client in any way?

This client would have been better supported and served if it had approached a good trade consultancy instead. This way the manufacturing issue and problem the client was facing would have been addressed as the focus point.

The financial services company could have better supported its client by looking at really why they had contracted them in the first place. However, this is not for the financial services company to know how to properly serve their client in this respect as it is simply not their industry.

Want more? Check out Part Two!

You might want to check out who needs trade fair assistance services.

What is Trade fair assistance?

Deciding to get on a plane and fly to China to a trade show can be a daunting concept. Taking on the cultural barriers of some of the world’s largest annual fairs can seem impossible. This leads many to reach out to one of many companies claiming to offer Trade Fair Assistance, companies that claim to offer on the ground support for your visit.

Be warned! Many of these companies do not offer any real value or benefit to you. Remember these are international annual events catered for you, the customer.

Before handing over your money and trade secrets to any company, be sure of two things:

1. Do you need Trade Fair Assistance?
2. Are you being offered a service that matches your needs?

Who needs Trade fair assistance?

You attend trade fairs either as an exhibitor or as a visitor. You are either a supplier or a potential customer.

A Trade fair assistance service shouldn’t really apply to exhibitors as they have probably done these many times before or have an event/exhibition company to help set up a booth/stand and manage basic operations. So for this purpose let’s eliminate this group from needing ‘trade fair assistance services’

As a potential customer looking for new suppliers, new products, new technologies, etc, you know your field of expertise. If you are looking for new products and technologies outside your business scope, the chances are that you have done your research and have a basic knowledge of what you are looking for.

If you are visiting the Guangzhou Canton fair, Hong Kong Mega Show or trade fairs that cover a large scope of products and industries, you may be visiting to browse and develop new ideas. You could also be visiting for the first time and not know what to expect.

These situations are where I would expect potential buyers not to know so much about the area the trade show is held in, particular items, specific industries and cultural issues. This is where a good trade fair assistance service comes in.

What should Trade Fair Assistance offer?

Trade fair assistance services should be there to offer you in-depth expertise about suppliers, local knowledge and key areas. More specifically they can approach a solution to an existing issue you might have and through their experience and knowledge find several ways to resolve it quickly and effectively. You should also expect a service that can help beyond the trade fair visit:

1. Vet potential suppliers
2. Negotiate price
3. Manage quality
4. Protect your brand

This leaves you to concentrate on the core business activities of sales and operation in your market area.

This range of services can be best supplied by a locally based international trading company or trading consultancy. It’s in the interest of these companies to support and help you find what you need and find the suppliers that most meet your requirements, be it price, quality or a specific technical issue.

We live in a small world these days. World markets rely on each other and what affects one country will invariably affect another. We have become so intertwined with who owes what to whom, and whose debt is held by whom to the point that the current looming European financial crisis has further unveiled the intricacy and co-dependency between Europe and China.

Europe is China’s largest trading partner. Europe has provided two decades of foreign investment, year-on-year solid bilateral trade and decades of technology exchange that has benefitted China’s rapid development. China has in turn provided Europe with the workforce and large scale production that has allowed businesses on both sides to grow and profit.

The present financial situation is almost entirely Europe’s fault, caused by poor fund management and reliance on a single young currency while member nations ignore policy and allow overspending. The mistakes made should be admitted and stricter rules enforced if they are to expect any further confidence in them and the Eurozone. Anyone considering aiding Europe needs to seek genuine assurances of change to the status quo before any assistance is to be offered.

If Europe suffers deeper financial crisis, then demand for products and materials will decrease. This will directly affect factories in China and Europe and cause a major decline in national exports, especially in China. As is always the case, it is the ordinary, hard working people of China and Europe that will be most affected by this fallout.

Based on the past 100 years of strong relations and support China and Europe has shared, I feel that China should support and help with the financial recovery in Europe. It is in their interest to do so. I wouldn’t want or expect China to solve the issue and bail everyone out, but it is in their interest to look at a way of at least maintaining trade levels so their manufacturing industry – on which they still rely heavily – is not critically affected. The domestic market in China is strong and still developing but it still has a very long way to go before it matures to a reliable level.

The prevailing attitude in the Chinese state-owned media appears to be that the request for help from Europe is ‘a trap’ and an ‘attempt to squander China’s hard earned wealth and reserves’. This is clearly not the case, as Europe looking to sabotage its biggest trading partner in order to get out of financial trouble themselves is, quite frankly, ludicrous. Or is it?

I can understand the calls for caution at this time however. We are all aware China has a lot of work to do domestically, maintaining a high level of growth and development. China therefore needs a great deal of money to progress in many areas. This will be made even harder due to the fallout of a deepening European financial crisis.

Politicians on both sides will express fears and raise issues, but at the end of the day if a crisis escalates and deepens the only way out is business. Business generates capital, employment and work. Now more than ever, our focus should be on working towards fresh business, renewed trade and developing solutions to support the changing world we live in.