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Is China set for Superyachting?

Discussion in 'General Yachting Discussion' started by Milow232, Jan 26, 2014.

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  1. Milow232, Jan 26, 2014
    #1
    Milow232

    Milow232 Guest

    Hello,

    some of you know that I am currently learning Chinese (since 2years) and hope to use my new skills for my prospective career therefore this market is of peculiar interest for me! I am interested in your take on the current chinese market and particulary an estimation in 3-4 years... If this is possible as we do not have got a cristal ball.

    I have heard the Chinese have to discover the yachting live style yet. A proper infrastructure like marinas, services etc. is lacking in China that means potential yachts would probably operate in the beaten region like Med or Caribbean but also the Pacific Ocean. So I guess they have first get used to this lifestyle but they are generally very interested in the Western culture like cuisine etc. and adapt this quickly.

    I focus on the superyacht market that means 130ft/ 40m and upwards. A market which has been rather quiet in China yet but is now picking up pace?!

    The Hainan Rendez-Vous seems to be a good platform for all major players within the industry getting started in the Chinese market..
    So or so I have read reports of increasing interest coming from China. The sale of a Feadship F45 last year and the recent order for a 40m Royal Huisman yacht as well as the LOI for a 68m CRN are fine examples of clients brave enough to do the the first step towards superyachting... At least I hope many more to follow! :)
    I guess the market is still too young for really big projects like 70m plus and it will take a few years?

    I think this is not primarily crucial for the superyacht market but here a two facts to the current wealth situation in China:
    - more than 1 Million USD Millionaires
    - 315 Billionaires
    But please let's do not discuss politics (like communism etc.) here!

    Just for clarification: I do not claim to have inside knowledge or expirience, this is just my estimation as an close observer! If YF is not the proper place for this kind of discussion or my post is considered as inmature, feel free to delete it.
    Otherwise I am looking forward to your contribution to this topic!
  2. Viceroy, Jan 26, 2014
    #2
    Viceroy

    Viceroy Member

    Joined:
    Dec 27, 2005
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    Location:
    Semi-retired in Sidney, British Columbia
    You are not the first to examine the prospects of selling/marketing high end goods and services to the growing, wealthy, Chinese consumer. The road to a successful arrangement by outsiders in the market is littered with failure and disappointment. The business culture is very complex and requires dedication to understanding the nuances. A co-operative and competent partner/advisor/consultant who is either Chinese or has spent significant time doing business in China is almost mandatory. Gaining trust and "name" takes time. There are many ahead of you (by years) developing relationships. But, go ahead....study, be patient, absorb the culture, etc....and who knows. Good luck. Cheers, Richard (a veteran of doing buisness in the Orient but many years ago).
  3. HTMO9, Jan 27, 2014
    #3
    HTMO9

    HTMO9 Senior Member

    Joined:
    Jan 13, 2009
    Messages:
    1,670
    Location:
    Germany
    China

    I could not agree more with Viceroy. But dealing with China or dealing in China or even building a joint venture with companies in China is a totally different story. And this counts for Taiwan, PR of China and other Asean countries like Korea or Japan.

    It does indeed help a lot, if you speak their language and understand their mentallity and culture. You gain respect in their eyes but they never accept you as being on their level of superiority. More than 30 years of business with that area makes you learn it the hard way.

    Clear cut deals and contracts with strict rules and painfull contractual penalties, close control and supervision is the key for business with that area.

    Joint ventures or producing in their countries by using local labour have a big history in failure and losses for European or especially German companies. The biggest mistake for us was and still is the permanent transfer of knowhow. As soon as they feel, they have learned enough, you are kicked out and they take over completely. The same thing has started in India now. Patents and copyrights are disregarded, Contracts and treaties are busted and foreign companies have no chance in court. Some very prominent German companies have withdrawn from that market in completely.

    The market for Megayachts in the PR of China has jet to come. The international rules for building and operating those yachts under Chinese flag have not been established jet and operating Megayachts under foreign flags is even more difficult. A boat, owned by a Chinese accepted in one harbour by the local authorities might be chained up in the next harbour by a the local governor until he gets payed the appropiate fees. And finally there are not very many beautifull places to go with a megayacht along the coast of communist China.

    Chinese Billionairs will for sure buy large yachts in the future but it will take a longer time until they will take them home and moore them in their local harbours. And it will take even more time until they will be able to establish their own high quality megayacht industry. As long as they buy here, our rules and contractual languages and laws apply.

    But in the (hopefully very long) long run, they will win. Asean countries and India are the future in business and good old Europe will only play a minor role in the globalized business world.