China- mass marketing the ‘boating experience’

by Shi Jing, China Daily on 12 Jan 2017 According to Yang Xinfa, Deputy Secretary-General of the China Association of the National Shipbuilding Industry, the yacht industry in China has been undergoing a sharp decline over the past five years. Sales of yachts are down due to slowing economic growth and the government's austerity policies, but yacht clubs have found a new way to generate income: short term charter, or 'rental', by the hour or by the day.

Up to 75 percent of Chinese yacht companies are fulfilling fewer orders and fewer people are visiting boat shows. 'Boat rental is probably the key to solve the current deadlock,' said Yang.

Some industry pioneers have already tested the waters. Fujian Yihong Yacht Co Ltd, the first company of its kind to be listed on the National Equities Exchange and Quotations in February 2016, launched its ‘boating experience project’ in May 2016. Priced only RMB328 (USD47) per person, the experience is aimed at the mass market.

According to Fan Liwei, director of Yihong, the Chinese yacht market will hit RMB40bn (US$5.7bn) annually for the next 10 years. Most of that?roughly 35 billion?will be accounted for by cheaper boats that cater to the general public. This is the major reason that Yihong is exploring the rental market, said Fan.

Rental charges are fixed according to the size of the boat and range from RMB4,000 (US$578) to RMB12,000 (US$1,736) an hour. A 55-feet (16.76m) yacht that can accommodate 10 people, for example, costs RMB8,000 (US$1,157) an hour in the off-peak time and RMB10,000 (US$1,447) during peak hours.

According to Lu Xiaoya, sales director of Lizhi Wisdom, most of the clients rent the boats to entertain business partners. A growing number of the clients have also rented the boats for marriage proposals, baby showers and parties.

Full story: http://www.chinadaily.com.cn/bizchina/2017-01/10/content_27906555.htm