The current global financial crisis is slowly but surely spreading from banks and financial institutions to other sectors of (global) economy. How it does, can or will affect the BizGift industry ? I say it will but hopefuly (thanks to the nature of this industry) less than some other industries. Here is why that can be the case.

BizGift industry does not target the retail customers (at least not directly).

When crisis hits people start spending less. First go the pricy items (cars for example) but if the crisis hangs on even cheaper but non essential things remain unsold. Retail sales suffer. But BizGift products are not out there for people to buy. They are out there to motivate people to buy other stuff.

When sales are falling companies have even more reason to invest in marketing.

When sales are falling companies can either give up and shut down or do something about. If the pie is shrinking (buying power of consumers) the aim has to be to take bigger share of that pie. Marketing activities have to go on and they do include purchasing of BizGifts.

Big corporations are cutting marketing budgets

This may sound like bad news and it well may be but not always. The BizGift industry is massive but cost of the promotional products that accompagny marketing campaigns is usually only a fraction of the total campaign cost. Imagine what you can get when you decide to spend USD100,000 on promotional products and then go and try to see how much advertising time on TV or ad space in media you can get for the same money. Cutting only a fraction from spending on media advertising probably saves more than cutting the BizGifts out altogether would. And BizGifts do work.

Look out for opportunities

And lastly - every crisis creates brand new opportunities. Taking them may require some courage as risks may be involved, but some time all that is needed is to approach the things differently in these new and changing conditions.

So aren’t there any dangers ?

Yes, they are, of course. Perhaps not for the entire industry but for individual companies.

Many BizGift companies rely of few major accounts to survive and prosper. The major account can be for a large company, for some other one or two local business. Some companies cut their spending but there are those that go under. Loosing one or more of the key clients may be devastating for BizGift company.

Many BizGift companies keep significant stock of merchandise in their warehouses. Without that it would be hard to provide superfast service people are used to these days. That stock has to be financed somehow, usually by banks. While business is steady or grows there is no problem. But drop in sales may result in inabality to meet the payments to banks and all sorts of troubles may follow rather quickly.

Many BizGift (as well as other) companies give favourable payment terms to their good clients. But even good clients may get in short term difficulties. Delays or defaults on payments may create serious cash-flow issues. Not a pleasant situation.

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Falling attendances, hotel bookings down, unhappy exhibitors, that is how the October trade shows in the Far East can be described. Many blame the current economic climate for this but the root of the problem is somewhere else.

Yes, there sure were people who canceled their travel plans in the last moment. But most trade show visitor plan and book their trips, flights and hotels way in advance. The major reason for the falling attendances were the stupid greed motivated decisions of Canton Fair organizers to stretch the bi-annual Chinese Export Import Fair to three sessions spanning from October 15 to November 6. It may be fine for the regular buyers but pretty much killed it for the people from the promotional products industry. Electronics products in Phase 1, Gifts in Phase 2, Stationery and Writing instruments in Phase 3. What session should BizGift people select ? Who can spare 3 weeks to stay in China ?

Then there is Kenfair, the organizer of October Mega Show in Hong Kong, another regular trade show for people from promotional products industry. In the normal days this show was placed in between the phase 1 and phase 2 of the Canton fair, allowing us to visit 3 trade shows within a period of about 10 days. Now the new arrangements resulted in many people not staying after phase 2 in Canton. Bad news for exhibitors - Kenfair was much worse attended than it used to be, the Phase 3 in Canton, especially in the stationery areas was almost empty. As one of the exhibitors told me, they could just sit down and play cards for 5 days …

This all however had some positives for the visitors. The exhibitors had much more time and patience and desire to talk .

Let’s see how long it will take for the Canton Fair organizers to admit that they were wrong with this new format …

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The promotional products are sometimes funny and also well received by the public . Here is a video with advertisement for vitamins for children. The green man from Mars is the character that represents the brand.

Get the Flash Player to see this player.

The gift that came with purchase (and features at the end of the clip) is a voice changer that changes the voice into some kind of voice from Mars . Simple but effective.

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Recently I read an interview on wired.com with the French designer Philippe Starck. Among other things he touched the question of using the recycled plastic and bioplastic.

Wired: Recently, you have begun to look at the environmental impact of your designs. How does a plastic chair fit in?

Starck: The stupidity of the ecological movement is that people kill trees for wood. It’s ridiculous. The best ecological strategy is to make products of a very high creative quality, so you can keep them for three generations. I prefer to make a very good chair in the best polycarbonate than make any shit in wood that will be in the trash one year later.

Wired: Why not use recycled plastic?

Starck: It’s a little joke of a material. You can do almost nothing with it. And I also refuse bioplastic, which comes from something that people can eat. Scientists agree that we have a real food problem, a famine approaching. It’s a crime against humanity to take something you can eat and make a chair — or use it as gas for your SUV.

These “green” items have recently became very trendy also in the promotional products and gifts and premiums industry. I have nothing against some environmental consciousness but feel that as it often happens the whole industry has jumped on the wagon without really thinking about the actual impacts these “green” products may have. The parallels with biofuels spring to mind. We can run cars on fuel made of corn or soy beans but at the same time as a result the global food prices keep rising threatening stability and lives of people in many parts of the world. One of the aims of biofuel use was reduction of the CO2 emissions. At the same time however huge areas of Amazon rain forest are disappearing so the land can be used for biofuel crops …

Of course those few million pieces of plastic pens made of corn are just a drop in the ocean if compared to the biofuel production. But do we really need to start turning food crops into plastic pens at exactly the time of increasing food prices ?

Is the motivation behind this “green” items craze really the concern about the environment or is this all simply because being considered green is cool these days, no matter what it takes to create that eco friendly appearance ?

One more note on the recycled plastic. Not sure if I would call it a joke of a material, there perhaps is some use for it. But products produced from the recycled plastic rarely can pass the safety lab tests in order to be allowed to enter developed markets.

I will elaborate further on BizGifts and environment in future posts.

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I received few photos from a friend the other day.  Here is one of them. The sight of the porcini makes me hungry . But look at the knife just next to it. There are places in the world, especially in Europe, where wild mushrooms picking is a popular outdoor activity.  A special knife may be a practical and appreciated gift especially ahead of or during mushroom season.

Mushroom Knife

The knife comes with a slightly curved blade (to help cut the mushrooms easy from the ground) and a brush for brushing away the soil and dirt. And of course there is a safety lock to prevent injury by accidental closing of the blade.There is enough room for branding too. It can be laser engraved either on the blade or on the metal part of the handle.

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