China, the new Italian bet

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The strong Chinese gaming tradition is an opportunity to be developed in Italy and the recent commercial agreements between the two countries offer further business opportunities, provided that the institutional protocols become operational T hey watch each other, studying business opportunities in particular. The new Silk Road, in Italy, certainly passes from the recent commercial agreements signed between Premier Giuseppe Conte and Chinese President Xi Jinping, but it has been beaten for some time even in the gaming sector. Indeed, talian operators have been focusing on Chinese customers for some time, but they believe that the country can also be an interesting market for developing synergies and growth opportunities, despite the fact that it has a strongly restrictive policy in this area. Diego De Santis, owner and director of Pangea group (which includes Pangea Sarl of Monaco and Nobis international service of Sofia), focused on business consultacy services, takes stock of the existing and developing ties between the two countries. How important are Asian and in particular Chinese customers for Italian gaming locations? “To date, Chinese customers represent a very important target and the numbers that Venice, for example, finds in this important market prove it. Campione d’Italia is another important example of how the Chinese player is coveted who, regardless of the administrative ups and downs that are penalizing it, has built a specific offer for that market; there was even a project to open a separated structure just to welcome the Chinese player”. What particular needs and characteristics does it have and how can and should be supported? “Chinese customer cannot be managed without a deep knowledge of the many cultural elements that distinguish it from all other customers. Many operators in the hospitality sector have heavily invested, in order to be able to coherently offer to the Chinese market. We can say that the relationship must be built, starting from the world in which we commercially relate with the partner, radically reviewing all the parts of business etiquette that must characterize the actions to promote gaming structures. In the second place, communication must necessarily pass through the most used channels, also for what concerns the web; it is indeed known that the Chinese use different social platforms from those of Westerners, so it is necessary to be present on them. Adaptation to the premises and some game modes are also necessary, so as to approach as much as possible to what they expect to find when they arrive in gaming facilities on other continents”. How important is the made in Italy in the Chinese market and what are the difficulties that Italian companies have to face in approaching it? “Made in Italy has always been a distinguishing characteristic allowing the offer of products and services to have a place of excellence in the choice and tastes of the Chinese customer; is equally true that it is not enough to have a brand or a label, but it must be communicated in such a way that the Chinese customer can truly appreciate the qualities of the product itself. The greatest difficulties that our Italian companies and customers have faced and will continue to face are undoubtedly linked to the very high competitiveness that the market foresees, given the continuous evolution of the demand. by Anna Maria Rengo D I E G O DE SANTIS

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The challenge is very difficult but to date Italy is certainly well seen”. What positive and/or negative consequences will the new commercial agreements have for Italian companies operating in China? “Dynamics that are raging in international markets are making a further selection among those who aspire to approach China. We can see the conflicts caused by the relations between China and the US that, certainly, will have some effects on the trend of exports and imports also on Europe. As regards Italy, the implications can only be positive, provided that there is a strong involvement of small and medium-sized enterprises and that we don’t stop at institutional protocols, that rarely become operational and therefore a source of income for our companies” . What business strategies in China can Italian companies adopt, including with regard to gaming? “Strategies are quite common for all product markets, including gaming. As mentioned above, it is essential to begin with the linguistic, cultural and structural methods that are best accepted by the potential Chinese market; to be present at important events such as trade fairs, cultural exchange events, trade missions. Last but not least, the preparation of one’s own structure (staff, environments, communication logic) for coherent hosting”. Is cooperation with Chinese operators possible? “In our history, we have made many cooperations and partnerships with Chinese operators, so it is absolutely a long way to go. However, surely some features of the cooperations in the way we know them in the West must be reviewed, both in relational and contractual terms, but we can’t ignore the establishment of relationships with local workers”. The special Chinese administrative region of Macau has be

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come the world capital of gambling. How could this have happened? “Macau inherits all the benefits of the ancient gaming tradition that the Chinese people have always had. The history of Macau has been strongly influenced by the political trend that China has experienced in recent decades. We must remember when the restrictions imposed on Chinese players in moving to Macau brought down casinos’ takings and the sudden change of direction with the liberalization of expatriations and playable amounts. Tax revenue that Macau assures to Beijing with its revenue has prevailed and today Chinese players can stay in Macau for nearly two weeks a month and freely play”. Gaming is still largely forbidden in China. Is this state of affairs set to change over time and how much the ban on legal gambling, in China, influenced the development of the illegal one? Do you have any figures? “We believe that gaming in China will continue to remain illegal also to protect the interests of the aforementioned Macau, which clearly benefits from the situation (and consequently Beijing benefits of it too). As for the figures, we don’t have too reliable data, but we can say that the phenomenon of illegal gaming is very severely punished by the Chinese state, so the phenomenon is under control and certainly the government will try to bring it back in some way to a source of legal income (perhaps through some other big contract in Macau-style, as it is already planned to do in Cambodia)”.

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Two cultures compared

Made in Italy is important in China for a long time. For example, thanks to the activity carried out by World Trade Display. As the president Riccardo Taccardi explains, the company, skilled in the design and direct production of displays and digital signage solutions with a high emotional and communicative impact, works on the Asian and Chinese markets in particular “for at least fifteen years, with its own direct join ventures with our factories”. What are the main difficulties encountered and what are the business prospects on the Asian market? “The ability to make them understand the designs and styles of the products we designed and conceived also with special technical specifications”. Do you think that the new trade agreements between Italy and China will bring advantages to Italian companies operating on the Chinese market and to your company in particular? “Not in the information technology sector. Electronics in China have always been produced and then sold around the world, unlike food, couture o car industry”. In your opinion, the recent regulatory developments in Italy about gaming (increased taxation and ban on advertising) which consequences will have on the business of Italian and foreign gaming companies?

RICCARDO TACCARDI

Italy remains an attractive country? “The ability to know how to regulate the gaming market has always been a challenge all over the world, as the latter is an area that also involves emotional and compulsive aspects. The new rules will undoubtedly lead to a concentration of the gaming in a few players and increasingly controlled directly by the legislator, who will thus be able to better follow the various evolutions of the sector, especially the online one. The division of the sector, existing until now, has always created evasion and non-control of individual small players”.