All aboard

PUBLISHED : Friday, 06 August, 2010, 12:00am
UPDATED : Friday, 06 August, 2010, 12:00am

Sam Li's love affair with yachts started last November at a boat exhibition in the coastal city of Xiamen. He bought a 48-foot boat the next month, set up a company in February and by March had made his first sale. Li, who sold clothing, aquatic products and health-care supplements before entering the boat industry, says yachts are like any other product. 'One day you're selling coffee and the next day cups.'

But clearly he was on to something much bigger than coffee cups. 'I've alredy bought seven yachts and have returned to buy two more,' says Li during a visit to the Jet-Tern Marine Co, a Taiwan-owned yacht builder in Zhuhai. 'We already sold five yachts in Shanghai, Zhejiang and Sanya. There's a lot of potential here.'

The first yacht Li bought was the Artemis, a high-quality yacht made by Jet-Tern specifically for the China market. 'The price was about the same as a Bentley,' he says. 'There are a lot of very expensive cars in China now. We have confidence in the market.'

Li sold the yacht on to a Shanghai businesswoman who made her fortune selling health supplements. 'She wanted a jet,' says Li, 'but we talked her into buying a yacht.'

His company now offers one-stop shopping, making all the arrangements for customers. 'People who buy yachts in China have a lot of money,' he says. 'They don't like to deal with details. We take care of everything, from registration to the jetty and after-sales service.'

Jet-Tern's chief executive, Howard Chen, saw the potential in yachts last year when, hit hard by the economic crisis abroad, he designed the Artemis series, which is relatively inexpensive at around 4.5 million yuan, while still being light and fast. A higher-end Selene 53 goes for around US$1.05 million (HK$8.16 million) in Hong Kong.

Chen says China is now No. 3 in the world in terms of number of millionaires, and that while per capita GDP may be less than US$7,000, 'the top 3 per cent are very rich, and those at the top of the pyramid are buying yachts.' In 2009, his first year of selling in China, he sold just three craft. In the first half of this year, he has already sold eight, and his target for next year is 25 boats sold locally and another 25 overseas. He hopes the number will rise to 200 boats annually, with close to 70 per cent being sold in Hong Kong and the mainland.

Industry insiders say that in the past the Chinese were not keen on outdoor activities, but that this is changing. 'We have gone through 60 years of struggle,' says Stuart Hu, director of marketing at the Sanya Visun Royal Yacht Club, which opened last August. 'Now, bit by bit, we have a better life and income, and people have the ability to consume. People are looking for fun and they're seeking a new lifestyle. Before the Chinese saw the sea from the land. Now they're seeing the land from the sea.'

The trend is partially attributed to an obsession with status. 'The Chinese are happy to show off things,' says one European real-estate developer who is investing in Sanya. 'They started with good cars, then good apartments and now they want boats. It's a clear trend.'

Li says many companies are buying yachts to entertain potential clients and raise the image of their company. 'It's to show off their new lifestyle,' he says.

Sophie Deng, marketing executive for Simpson Marine Sanya, says Chinese buyers prefer the Azimut, which she likens to a Ferrari because of its fashionable design and speed. She says that Azimut is about the same price as an apartment, but that a yacht provides added value. 'The yacht can help you grow your business,' she says. 'It says 'see how successful I am? You can relax when you do business with me.''

Yachting is likewise being seen as a status symbol for governments. 'With the development of tourism, some cities want to put the yachting and the sailing industry at the top of their tourism industry to show people around the world a new and high-end image,' says Hu.

'They really want to make this happen,' says the European real-estate investor. 'If you have boats here, it will raise the status and Sanya will become like Miami.'

Chen says that marinas have opened in around 20 places across China, including Xiamen, Shenzhen, Qingdao, and Dalian, where big investments are being made in building facilities.

Yachting is attracting more and more attention, with several sites dedicated to the industry and at least two glossy magazines reporting on the latest trends.

'We have a saying in Chinese that good people don't go to the sea,' says Chen, 'so this is a big jump'.

The yacht industry got an unexpected boost in January when the State Council announced that Hainan province was given the nod by the central government to become a national tourism island. One of the linchpins in the plan is yachting, and the provincial government is expected to improve infrastructure and implement new regulations to boost the trend.

The island, known as China's 'forever tropical paradise,' is seen as an ideal place for the sport to grow. 'Sanya is a tropical zone, with warm weather all year,' says Chen. 'In Hainan, you can use your boat all year. It's like the Florida of China.'

Marinas are going up along the coast of the island, with thousands of berths predicted to be set up in coming years. The Sanya Visun Royal Yacht Club, which invested close to 300 million yuan in setting up Sanya's first marina and yacht club last August, signed up 120 members in less than a year - of which only 45 already have yachts.

'The rest are going to buy boats,' says Hu. 'First they just wanted a membership. They wanted to grab the chance to get a berth first.'

The marina sits in front of the opulent Visun Royal Yacht Club Hotel, which has an auspicious 88 rooms, western and Chinese restaurants, a cigar bar, wine bar, library and an exclusive VIP room. The marina is full of top-end brands, such as Benetti, Azimut, Brunswick and Pershing. Visun sold 10 boats last year and this year has already sold five more. One 40-foot vessel sells for 2.4 million yuan while a power boat goes for 25-30 million yuan before taxes. The company predicts 30 per cent growth next year. The club charges 630,000 yuan for a 23-year membership plus 36,000 yuan a year for berthing fees. Non-members must pay 120,000 yuan. Visun's own boats are available for chartering at 3,000 yuan an hour. Once fishing trawlers are removed from an area opposite the club, Visun says it hopes to expand the number of berths to 1,000 over the next five years.

Meanwhile, Luhuitou Tourist Area Development is hard at work on a huge development called Serenity Coast, which will see a high-end marina spring up on the water with space for more than 300 berths. The marina has been designed by global industry leaders Camper and Nicholsons. Sanya Serenity Marina will be the only Chinese stopover in the prestigious Volvo Ocean Race, set to kick off in October 2011. The venue includes the state-of-the-art InterContinental Sanya Resort, which opened in July. An Anantara Resort is scheduled to open next year.

The island is also attracting major yacht companies. Sunseeker and Princess are both building sales shops beside the Visun Royal Yacht Marina, and Simpson Marine, which produces yachts and works as an agent for leading international brands, has opened a shop in the Serenity Coast area.

Hu says that China is hosting a growing number of regattas. Qingdao, the site of sailing events in the 2008 Olympics, already hosts 20 events a year, up from only a handful the year before last. Despite the rapid growth, the industry is being held back by tradition. Chen predicts that about 80 per cent of his sales will be the Artemis, and just 20 per cent the Selene {minus} a long-range ocean-going yacht {minus} as the Chinese have not yet adopted the habit of spending long periods of time on the sea.

'The Chinese may spend just one night on a yacht,' says Amy So, director of Selene Asia, the exclusive Asian sales arm of Jet-Tern Marine. 'Chinese people prefer city life and shopping, rather than a natural life.'

'Even though there is a bedroom on the boat, they'd rather come back and stay in a comfortable hotel or an apartment,' says Deng.

Chen is hoping that this will change. He says that it was only in the last decade that Europeans began to sail the long-range yachts, and he predicts Chinese will follow their lead. He has already sold one 'trawler', as he refers to his ocean-going line, and has two other Chinese customers interested. 'When people build up more knowledge of yachting they will be more able to accept long range sailing and the idea of living on the sea,' he says.

'In Chinese we say the beginning is the hardest,' says Hu. 'At first, when we tell people about the deep sea, they feel afraid because of what they see in movies {minus} sharks, big waves and storms. But they have no real experience of it.'

'Chinese people have lived in the yellow land culture for thousands of years and they're new to the water,' he says. 'It's time for Chinese to know more about blue water culture.'