Commercialized Operation Plan

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Chapter 9
Commercialized Operation Plan

The many successful world Expositions held in the past serve as good references for the Shanghai World Expo. As an important international event, not only will the World Expo effectively promote economic development and improve people's living conditions in the hosting and neighboring areas, it will at the same time stimulate the development of related industries.

The 1970 Osaka World Expo was the first expo ever held in Asia, and also the most successful expo ever held in the world. In fact, the effect of that expo continues to be felt even today.

In preparation for the World Expo, the Japanese government allocated a huge sum of money for the building of exhibition halls and auxiliary facilities. Major reconstruction projects were also carried out on transportation, accommodation, parks, urban sewerage systems, and watercourses. Priority was given to transportation. The government rebuilt the Tokyo–Osaka highway and expanded the airport. Tens of kilometers of railways connecting the expo area with the downtown area were also built, facilitating the visiting and dispersing of visitors.

All in all, the total investment that Japan made in hall construction and other relevant areas amounted to 3.3 trillion yen, far exceeding the 2.7 trillion yen spent on the 1964 Tokyo Olympics. This World Expo greatly promoted the construction work in Osaka, specifically in the areas of transportation, high-grade apartments, commercial facilities, tourist locations, and places for cultural exchanges. It also promoted the formation of the city agglomerate in the Osakacentered Kansei economic belt, exerting great influence on the development and the overall layout of Japan's economy.

After the conclusion of the Osaka World Expo, followed by ten years of effort, the former expo site was rebuilt into a large, green World Expo Park. Various types of museums and science and technology centers are located in the park, the former auxiliary areas, such as parking lots, have been transformed into facilities like amusement parks and hot springs. The park has now become one of the main scenic spots in Osaka. In addition, due to the availability of convenient transportation and extensive facilities, the real estate in the surrounding areas also flourished. The area has become a serene and tranquil residential suburb of Osaka.

In 2000, the Hanover World Expo created 30,000 employment opportunities in Germany. It also enhanced Germany's international reputation, improved its investment environment, and boosted consumer demand. There was also an upgrading of infrastructure, such as urban construction and transportation in the host city, which further improved Germany's international image.

In Hanover, economic and ecological factors were taken into account from the beginning in planning most of the expo-related investments and projects, as well as the post-expo utilization of the projects. For instance, the commercial exhibition spaces were restructured and modernized, enhancing the city's position as a leading commercial exhibition center. Emphasis was placed on the use of information technology during the development of the Hanover World Expo Park commercial area. The development of the Moenchsberg new district resolved the housing problem which had been plaguing 3,000 residents residing near the expo site. Regional express transportation networks were constructed and an urban light railway was extended. The greater Hanover district was named the Garden Urban District embodying a new concept in city landscape.

Data show that these projects, which were implemented to provide services for the World Expo, enhanced Hanover's potential as a commercial area and increased its appeal for commercial activities in the city and region. Such a driving force continued even after the expo, resulting in the springing up of a large number of grand, commercial buildings between 2001 and 2002.

Business opportunities from the 2010 Shanghai World Expo can generally be divided into three categories. First, the hosting of the World Expo will directly initiate various construction and operational activities. Second, the World Expo brand management will generate related economic activities. Finally, economic activities jointly carried out by the host city and its neighboring cities will improve the regional environment, promote the construction of comprehensive auxiliary facilities in the region, and the integration of the regional economy.

Total investment in the main project of the World Expo is estimated to be RMB 18 billion. There are three main methods and channels for fundraising: a fund jointly invested by the Central Government and the Shanghai Municipal Government, totaling RMB 7.15 billion, accounting for 40% of the total investment; the World Expo Bond, valued at RMB 8 billion, accounting for 44% of the total investment. The rest of the RMB 2.85 billion will be raised though various financing channels, including project finance, bank loans, and so on.

The operation expenditure of the World Expo is estimated to be RMB 10.68 billion, including the amount spent on park maintenance, large-scale activities (opening and closing ceremonies, exhibition hall day, and conferences), advertising, publicity and marketing, both inside and outside China, safety (including emergencies), administration and management, insurance, and ticket concessions. The above-mentioned operation funds shall be raised through ticket sales, sponsor revenue, license royalties, and so on.

The 2010 Shanghai World Expo Market Development Plan is an important part of the preparation for the World Expo, and also one of the main channels through which enterprises and citizens are encouraged to participate directly in the World Expo. The market development plan has been formulated on the basis of the China 2010 Shanghai World Expo Initiative Framework and Registration Report, drawing upon the commercialized operational experiences from previous World Expos and other large-scale international activities like the Olympics, and taking into consideration the foundation, the opportunities, and the scale of the actual situation of the World Expo. It is a guiding document for the successful implementation and accomplishment of market development.

As a grand event for cities worldwide, the Shanghai World Expo has designed special platforms for both domestic and overseas enterprises, so that enterprises of different scales and from various fields can find the appropriate ways of participation via a fair and open channel. The impact and social contribution of the Shanghai World Expo in the next five years, or even longer, will undoubtedly provide historic opportunities for enterprises involved in the market development to strengthen their brands, expand their market shares, and demonstrate their strengths and advantages.

The commercialized operation of the 2010 Shanghai World Expo mainly includes brand sponsorship, licensing products bearing the expo logo, organizing activities, marketing tickets, and leasing sites. Licensing products and organizing activities will take place throughout the expo preparation and hosting. The other two items will be implemented gradually, depending on the progress of preparation and operation. Product licensing refers to the Bureau of Shanghai World Expo Coordination authorizing eligible enterprises both at home and abroad to produce and sell products bearing the expo name, emblem, mascot, and other products owned by the 2010 World Expo. The development of licensed products shall conform to the theme and concept of the 2010 Shanghai World Expo, so as to raise public awareness of the concept Better City, Better Life. The organizer has applied for trademark registration in about 40 countries around the world. The licensed product manufacturers will be selected worldwide from industries closely associated with the expo preparation, the expo itself, and its theme.

Organizing activities refer to a series of promotional activities launched by the Bureau of Shanghai World Expo Coordination prior to the formal opening of the World Expo. Also a part of the World Expo, these activities will represent the expo theme and brand, and target a much larger audience. The organizer will invite enterprises to sponsor these activities and allow media to cover these activities. The goal is to achieve a win-win situation for all parties involved. On the one hand, this will help publicize the activities; on the other, this will also create more opportunities for enterprises of all sizes and from all sectors to participate in the World Expo.

Tickets for the 2010 Shanghai World Expo will be sold through global tourist service networks. In addition, theme tour packages will be designed to attract more tourists to the 2010 World Expo, as well as other tourist attractions in China.

The brand sponsorship plan consists of the 2010 Shanghai World Expo partnership plan and the advanced sponsorship plan. The partners and sponsors will come from two different sectors and will enjoy different provisions and treatment in their cooperation with the Bureau of Shanghai World Expo Coordination. In the expo brand sponsorship plan, there will be two levels, namely the partnership level and the advanced sponsorship level. The partnership level refers to the highest level of enterprise sponsors within the brand sponsorship system. In this category, the partners will not only provide financial and material support to the expo, they will also be parties of cooperation to the World Expo organizer in their respective industries. Both the cooperation prerequisites and the return on equity of the advanced sponsors will be less than that of the partnership sponsors.

The number of partners of the Shanghai World Expo is estimated to be ten to 15, and the number of advanced sponsors 12 to 20.

Corresponding to the effort and contribution of the sponsors, the organizer will reciprocate their assistance with reasonable yet abundant benefits, to help these enterprises realize the value of their sponsorship. Based on the different levels of sponsorship, the sponsors will enjoy varying levels of returns, including exclusive rights to brand use, exclusive commercial rights, corporate exhibition hall construction rights, priority for activity sponsorship, concession tickets for the World Expo, as well as on-site reception and arrangements, and various services offered by the organizer. As per relevant stipulations of the Ministry of Finance and the State Administration of Taxation, certain preferential policies will also apply to the expo sponsors.

The schedule for the Shanghai World Expo market development project will be as follows: the promotion of the brand sponsorship plan will be accomplished by 2007; the sponsor cooperation and services will last from 2006 to 2010; domestic and overseas promotions of the product licensing will start respectively in 2006 and 2007; product operation will last until the end of 2010; activities and projects operations will last from 2006 through the end of October 2010; the tourist organization plan will be initiated in 2008 and completed at the end of October 2010; the promotion of commercial services in the World Expo Park will begin in 2008; the operation preparation will last from July 2009 through April 2010; and the operation period will be from May through October 2010.

Through implementing the market development plan, the Shanghai World Expo will attract leading enterprises with outstanding vision and capability, as well as broad recognition, to play an important part in the Shanghai World Expo. By applying their expertise and experience to the organizing of expo activities centered on the theme Better City, Better Life, they will contribute to the successful hosting of a wonderful and memorable World Expo.

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Commercialized Operation Plan

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