It’s no secret that many wealthy Chinese love their luxury purchases: wine, cars, watches, handbags, rare teas, art – you name it and they buy it, often in quantity.
But thus far there have been a few exceptions to that rule, including private jets and luxury boats where market potential has been stunted by a lack of facilities and legal obstacles.
That may be about to change where luxury boats are concerned, following Dalian Wanda’s acquisition of British yacht maker Sunseeker.
“We are thrilled to be joining the Wanda family. Support from Wanda will be instrumental in enabling Sunseeker to unlock the enormous potential of China’s rapidly expanding luxury yacht market,” Stewart McIntyre, managing director of Sunseeker International, told reporters as the deal was announced in Beijing last week.
China is currently home to about 3,000 high-end vessels of more than 8 metres in length. That’s not a huge number, but the market has the potential to expand to 100,000 by 2020 according to a report by the China Cruise and Yacht Industry Association released in May.
Large boat ownership has been slow to take off in China for a number of reasons. Historically China has been a land-based culture which derives less of its sense of value from the sea. The sea has traditionally been seen as a place of work or warfare but not as a place to relax. Indeed, in Taoist and Confucian thought the ocean is classified as “yin” or “dark”.
That malevolent image is compounded by the fact that many Chinese don’t know how to swim – making the idea of a day’s cruise seem a little less attractive.
The more immediate logistical challenge in recent years has been a lack of marina facilities, as well as the Chinese navy’s strict control over its territorial waters (there are comparisons here to the problems facing private jet salesmen, with the PLA reluctant to free up much airspace for non-military-traffic).
In fact China only has a handful of marinas catering to luxury vessels, most of which are located on its southern coastline. Attempts to travel between them can also be thwarted by red tape that requires special permits to sail from one province to another.
“In China we need a lot of authorisations, just like we are moving a military ship,” Lamberto Tacoli the president of yacht builder CRN told the Wall Street Journal in April.
The shortage of marinas has seen many mainland yacht owner buy boats and berth them in Hong Kong rather than on the mainland, the WSJ also says.
Thus when Dalian Wanda’s billionaire chairman Wang Jianlin announced he would be buying Sunseeker for $450 million he also unveiled plans to develop three new marinas along China’s coast. They will be located in Sanya on Hainan island, Qingdao in eastern Shangdong and the northern city of Dalian – which has been completely without appropriate marina facilities until now. (Despite this Dalian folk like to refer to their city as the ‘Hong Kong of the North’, see WiC169).
Though the weather in northern China is not ideal for messing about on boats outside the summer months, there is still enough interest from wealthy Chinese keen to use their new purchases to entertain and impress.
“Europeans go on a cruise for 10 days or two weeks. The Chinese use the boat for a few hours per weekend to entertain clients, family, and friends. They use boats no differently than they would a karaoke lounge in the city,” Gordon Hui, managing director of Sunseeker Asia, told Bloomberg Businessweek.
That often means customising vessels to maximise the available space and upping the luxury factor with expensive fixtures and fittings, something which Sunseeker is used to doing for wealthy clients such as Charles Zhang, CEO of Sohu.com, as well as Wanda’s very own Wang. His 108-foot Predator craft was described as “the biggest, most expensive and most luxurious private yacht in the history of yachting in China,” when it first arrived in Shanghai in 2010.
Clearly Wang feels there are plenty more people out there just like him. “We wanted to buy 30 Sunseeker yachts for each of our new marinas,” he told journalists last Wednesday. “But then we thought it would be a better deal if we just bought the company.”
Like Victor Kiam, it would seem, it was another case of a man liking the product so much, he bought the company…
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