Predictions of yacht market boom are a salesman's dream
Luxury brands are enjoying huge growth on the mainland, which is expected to be the world's biggest luxury market by 2015. However, only a few hundred mainlanders own yachts. With projections that the mainland yacht market will reach US$10 billion by 2020 - almost a third of last year's global total - yacht broker Sunny Tao sees great potential for the industry.
What's the current state of the yacht market on the mainland?
In 1996, two yacht clubs launched in Suzhou and Shenzhen, indicating the start of the industry on the mainland. Since then, yachting has become a viable luxury option for flamboyant wealthy people. It's still a young, niche market on the mainland, even though Chinese rich people are becoming the world's main force in luxury goods consumption. The total number of private yachts on the mainland is now about 1,000. I've been a yacht broker since 1996 and have sold more than 80 yachts. I see an even better future and in the past year have sold four super-luxury yachts valued at more than 100 million yuan (HK$119.52 million).
Who buys yachts on the mainland?
Of course, the yacht buyers are all rich people. Most of them are male. Their key motivation for buying a yacht is usually for business entertainment purposes or for leisure with friends. It's also a way for them to show their wealth and social status.
What kind of yachts are most popular?
In the 1990s, most of the yachts sold on the mainland were medium- to low-end products, worth hundreds of thousands of yuan each and quite small. Now, the market is opening up to super luxury yachts valued at tens of millions of yuan or more.
Are there differences between Western and Chinese yacht owners?
China's multimillionaires are still infatuated with making money. The concept of using a leisure boat as an activity/sport for recreational use is not yet fully understood. Most Chinese use their yachts for business entertainment purposes, and do not necessarily enjoy yachting as a sport or family activity. They usually go out on weekends for a short run and then anchor - or they just sit in the marina. For them, yachts are usually used to entertain clients or business friends. They are mainly driven by curiosity but normally lack sailing and yachting expertise.
Do you see much room for growth?
The market potential is absolutely amazing because only a limited number of mainlanders are buying yachts compared to the large number of wealthy individuals who are potential customers. There are only around 1,000 yacht owners on the mainland, which is home to 400,000 multimillionaires (in yuan) and thousands of billionaires. The primary challenge is to educate potential customers to appreciate yachting and sailing. China doesn't lack rich people but it does lack those with experience of leisure yachting. Promoting yachting and the sea as a leisure lifestyle is a good start to sell more yachts. Although the industry is improving, there are still not enough professional salespeople with solid yacht and yachting knowledge.
What's stopping the mainland's new rich from buying yachts?
There are very few wealthy Chinese actually buying yachts. Barriers to yacht ownership include potentially negative cultural perceptions, lack of infrastructure and an undeveloped environment for leisure yachting. First, there's a lack of marinas and facilities to service and maintain yachts for leisure boating. There are a few dozen yacht clubs and marinas across the mainland, but none have the scale or sophistication to be comparable to clubs in the West.
Second, regulations are restrictive and not yacht owner-friendly. For example, an individual with a yacht helmsman's licence issued in the Yangtze River Delta can only sail a yacht there - they're not permitted to take their boat to the Pearl River Delta or other faraway waters. Before new provisions were enacted, a helmsman's licence issued in Shanghai could only be used there and not even in neighbouring provinces. Permission would have to be obtained separately from the national, provincial and municipal maritime authorities plus a few other departments.
Third, there is no lack of coastline or lakes for yachting in China, but growth really depends on government policies to improve yachting, especially approving more land for marinas. But so far, it's not easy for the authorities to give high-profile support to yachting, as such a symbol of luxury, because the wealth gap is growing ever wider.
How can the market be promoted?
Boat shows usually increase the popularity of yachts among the wealthy. There are about eight big yacht-related shows on the mainland each year. The latest one was Rendez-Vous in Sanya, Hainan, last month. The event is becoming increasingly popular, with a significant rise in exhibitor numbers. More than 8,000 rich visitors - including 200 billionaires - attended the show. The four-day show featured 13 luxury yachts. On the other hand, the booming economy and the rising number of wealthy mainlanders is already a good base for our business. We just need to let the wealthy understand and enjoy yachting.
Which areas have the best potential?
The major yacht markets are in the more economically developed coastal provinces. There's three key areas: the Yangtze River Delta, including Shanghai, Jiangsu and Zhejiang; the Pearl River Delta, including Shenzhen and Guangzhou; and Sanya in Hainan.