Major Brands Eye Increasingly Lucrative Chinese Market
Held last weekend at the Guangzhou International Convention and Exhibition Center, the 8th annual China International Boat Show brought global luxury boat brands from 22 countries, including the US, France and Italy, to one of the world’s fastest-growing boat markets. With more than 800 participants stopping by, including manufacturers, dealers and potential consumers, this year’s China International Boat Show indicated the extent to which China’s luxury market has expanded from “simple” luxuries like watches and handbags to secondary luxuries like yachts and private jets.
This year marked the first time Guangzhou hosted the China International Boat Show. The three-day event provided a platform for global luxury boat producers and consumers to meet up and discuss potential business relationships, but the show perhaps benefited international boat brands the most, as it gave them the opportunity to learn more about possibilities in the Chinese luxury market. Attendees, too, were able to learn about new boat brands and models.
According to event organizers, the international yacht industry is starting to pay more attention to the rising consumer spending power in China’s Pearl River Delta region, where annual luxury consumption is expected to surpass four billion yuan (US$609 million) in 2011. Around 300 people currently hold boating licenses in Guangzhou, and according to one exhibitor, demand for yachts is increasing rapidly. Said the exhibitor, “Two local businessmen showed interest in our yachts [at the boat show], with each of them looking at units priced over ten million yuan ($1.5 million).”
Although the Guangzhou boating industry is developing slowly relative to cities like Shanghai or Qingdao, Guangzhou remains a highly attractive market for many international boat brands, particularly in the wake of the city’s successful hosting of the 16th (2010) Guangzhou Asian Games. But it’s far too early for boat makers to call Guangzhou, or China, an easy bet. As Jing Daily recently noted, according to a draft proposal by the Chinese National Committee, a yacht tax is expected to be put into effect this year, which will impose a tax of anywhere from 400 yuan to 2,000 yuan per meter. Whether the new tax will curb the enthusiasm of potential consumers will remain to be seen. However, with rising incomes, and city efforts like the Pearl River System purification project and the easing of inland waterways, the development of Guangzhou’s yacht industry looks promising.
Article by Betty Bei Chen