Lawrence Wang Dafu is the founder of the China Rendez-Vous, Asia’s largest luxury lifestyle event. He is chairman of property developer Visun Group and Royal Yacht Club in Sanya. The next China Rendez-Vous will take place in Sanya from 8 to 11 December 2017.
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Q: China’s domestic yacht market seems to suffer today. Once it was seen as a great prospect for the global industry. Which are the reasons behind this lack of certainty in the Chinese market?
You know that this industry is with huge uncertainty. Because it is widely influenced by the world economy, regional politics local culture as well as laws and regulations. The financial crisis in 2008 affected many of the yacht supply chains in Europe and the United States, and mass-consumption yachts market was stagnant. Date back to 1990, the U.S. Government imposed yacht luxury tax in the name of justice and fair and it changed the consumption behavior and American yacht industry was badly suffered. Yacht dealers complained their sales in 1991 decreased by 77% than in 1990. Then the government withdrew the yacht luxury tax in 1993, the yacht manufacturing in the U.S. was gradually back to life.
China yacht market has been developing rapidly in the last years, it’s been very short compared to the European and U.S. markets. Even Hong Kong and Southeast Asia markets are running ahead of us for decades. It is very normal for an emerging market to experience some volatility during it’s course of development. Yet I believe that China is the world’s most promising market. Although the new yacht sales have slowed down, the yacht rental is getting better across the country. Yacht rental business is one of the best ways to spread the yacht culture. “Yacht” is gradually getting rid of the “biased label” of “luxury” and “private” by word of mouth.
This year, the Hainan Province Governor has put yacht industry as the region’s strategic focus of development. He proposed to establish Hainan Province as a first-class yacht consumption destination, a world-class yacht brands display window, and become the experimental area of yacht industry reform and innovation, which has given great confidence to the investors in our yacht industry. I trust that when the relevant elements of the yacht industry are available, the stakeholders are mature enough, the uncertainty of China’s yacht industry will fall into a reasonable range.
Q：What is your suggestion to those firms that would like to return to China sell their products but currently they do not fine positive results?
Some Chinese yacht website operators recently shared with me a lot of analysis results. They advised that the search of yachts has recorded a massive growth for those priced below RMB 500,000 and around RMB 10,000,000. And from the conversations of other yacht-sales agents, the inquiry of yachts worth tens of millions RMB has increased significantly in last half year. There is an old saying in China, “The duck knows first when river becomes warm in spring”, who will sense this obvious but accurate signal when China yacht industry is about to the next wave of good news? Of course the professional websites and yacht brokers who have the data and first-hand information. My advice to international yacht brands is if you want to get a share in China market, now is a perfect timing to rearrange your strategy, of course, the reliability of your products and sustainability of after-sales service will determine whether you can find capable agents and partners, so as to get a firm foothold and stand ahead of the market.
Q：Maybe the time of lavish shows for the business elite has finished and other formulas targeted to the new generations – genuine yachting enthusiasts- would be efficient formulas. What’s your point of view?
Our market is under gradual transition from “irrational” to “rational”. Compared to the 1st generation yacht consumers whom we called “conservatives”, the 2nd generation is younger, they love to play and know how to play. Some of them are even yacht “experts”. They prefer “small community” social activities and share and enjoy different new and interesting experiences. They bring yacht culture and lifestyle into their daily lives, in which he Hainan Rendez-Vous has been doing.
Q：Currently boats are still seen as venues to entertain, to host wealthy clients and government officials – which has made the sector an obvious target for the crackdown on corruption. At the same time, however, it seems that the biggest enemy in China is the lack of knowledge of the value of yachting. What are the elements that would help the culture of private yachting to emerge?
In the past few years, especially before the year 2012, the primary purpose of yacht consumption in China is for business entertaining. Yet we saw some changes in recent years, small yacht sales are getting better and better which shows that personal use as the main purpose of the yacht consumption is growing. In addition, some specific function boats are trying to open the market, for example, fishing boat and sport yacht, the most obvious one is sailing boat. We are seeing more and more people getting into and loving sailing, not only the rich but also the middle-class elites. I believe that as the market becomes more and more segmented, public dock and related service facilities for these small yachts, as well as business models will be developed accordingly. Another thing is the development of yacht rental business in recent years are favorable to promoting yacht culture. Yacht consumption will penetrate to more and more different classes in the future and the market will also become more mature. Learnt from American’s experience, I think the most important thing is how to make more Chinese people increase the time and stickiness of water recreation. With this problem solved, the development of private yacht culture is a natural success.