New | Ahoy! Yacht makers promote boating as lifestyle as they navigate China's sea of opportunity
Businesses are building marinas and promoting yachting as a lifestyle as boating industry looks to tap into huge market of rising middle class
The Chinese economy may be slowing, but sales of small and medium-sized yachts have picked up from last year, according to boat builders and brokers at the China International Boat Show in Zhuhai , Guangdong, this month.
Sunbird Yachts, one of the country's biggest yacht manufacturers, saw its turnover grow 30 per cent from last year, its account manager, Jiang Qiren, said.
Zhuhai-based manufacturer Sunway's sales also improved. "We sold only six yachts last year, but we've sold nine so far this year," Sunway deputy general manager Liu Zheng said.
"It's not that this year's sales are really good, just better than last year's. We sold more than a dozen yachts in 2012 and 2013."
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Unlike in the past when yachts in the country were mostly sold to companies, Jiang said, sales to individuals had risen as more people became familiar with them and more cities built support infrastructure such as moorings and marinas.
The spring of China's yacht market has yet to arrive, though.
Those in the luxury business had long hoped to tap into the market in China, now the world's second largest economy with a rapidly increasing middle class. But President Xi Jinping's austerity and anti-graft drive put a dent in the luxury market.
Sales of large and super yachts, once preferred by wealthy Chinese, were in the doldrums, said Zheng Weihang, secretary general of the China Cruise and Yacht Industry Association.
Gordon Hui, chairman of British luxury yacht maker Sunseeker Asia, said his mainland business had hit a rough patch because of the anti-graft drive.
This year's overall economic situation also made people more reluctant to make major luxury purchases, industry insiders say.
"It's survival of the fittest for now. Many incompetent yacht makers will disappear after this, but we have huge opportunities ahead as many mainlanders have accrued big spending power," said Leng Feibing, CEO assistant of China's largest super-yacht maker HeySea Yacht Group.
But a bigger obstacle for the business is a lack of a yachting culture on the mainland.
David Pester, special project manager at Zhuhai-based manufacturer OneWorld Marine, said the mainland's yachting market would take time to develop.
"It's going to take a generation or two to gain traction," Pester said. "They haven't had the marine culture growing up."
Most newly sold yachts are being used for business receptions or corporate entertainment rather than for private use or recreation, according to Zheng.
"We have to make white-collar workers and middle-class people realise yachting is a way of life," Zheng said, adding that it would take another five to 10 years for this to happen.
A lack of facilities, especially marinas, is a further hindrance - the mainland has only a handful of public marinas; most yachts are moored at private berths for thousands of yuan a month, making yachting an even more expensive pastime.
"The yacht may not cost much - perhaps as much as a good car - but mooring it is too expensive," said one Zhuhai electronics manufacturer.
Zhuhai, a coastal city next to Macau with more than a hundred offshore islands under its administration, has an established yacht-building industry. But it, too, lacks a marina.
The Zhuhai government, seeing the market potential of yachting, has been promoting the business in the city. It is one of the major sponsors of the Zhuhai yacht show. Five local firms, including two real estate developers and a tourism company, have also started building marinas.
Zhuhai Jiuzhou Yacht Club, a subsidiary of state-owned enterprise Jiuzhou Group, is building a public marina in the city, the first of its kind. "We want to change the public perception of yachts and promote marine sports," said Jiuzhou Yacht Club brand manager Liu Xuhua.
There are no official figures, but Zheng estimated China's yacht market to be worth about 8billion yuan (HK$9.8 billion).
"Yacht shows will allow more people to learn about boating. The small and medium-sized yacht business could take off in China once yachting as a lifestyle becomes more widely accepted," Zheng said.
But first, the government will have to change its regulations to make yachting an easier pastime to maintain.
Getting a yacht involves a complicated bureaucratic process of approvals by several government departments and there are many restrictions on where the yachts can go in the sea, according to yacht dealers.
"Like cars now, if boats can go freely between Hong Kong, Macau and mainland waters, yachting will grow much more quickly," said Sheng Wei, sales manager of a Shenzhen yacht dealer.
