Having established a Hong Kong-based yacht brokerage in 1984, Mike Simpson has been around long enough to know what some of China’s wealthiest clients want.
The Chinese “like things to happen fast and when they decide to buy a yacht, they don’t just want to spend months looking around …I think they want to get all the answers by the person they are going to do business with,” said the founder and group managing director of Simpson Marine, a yacht dealership, brokerage and service company.
Chinese consumers want all aspects of the transaction covered, from how to import the boat to getting the right crew, Simpson explained, adding that even tiny details such as producing the list of yacht-cleaning materials in Mandarin Chinesecan make the difference.
Yacht sales rose sharply up until Xi Jinping’s 2012 campaign to curb corruption, Simpson told CNBC’s “Managing Asia.”
He added that China’s uncertain economic environment and high import taxes of up to 45 percent for yachts are also hurting the industry.
But still, there are many high net worth people who still want to enjoy a luxurious lifestyle, said Simpson. “We have to facilitate that, make it easier for them … For example, they can buy their yacht and keep it in the south of France or somewhere else in Asia.”
Chinese investors have not backed away from investing in this luxury space.
Back in 2012, Reuters reported that Chinese industrial conglomerate Shandong Heavy Industry Group acquired top Italian yacht maker Ferretti. In 2013, the chairman of Dalian Wanda Group, Wang Jianlin, bought U.K’s Sunseeker Yachts.
Shenzhen-based Sundiro Holdings also bought a stake in Simpson Marine in 2015 in a bid to be a “major player in the yacht industry,” according to a press release issued at the time.
“There is certainly government encouragement for Chinese firms to be invested in major industries all around the world,” he said.
Despite the anti-corruption crackdown, China’s yacht market is still expected to grow to about $8.16 billion, and reach 100,000 leisure boats and yachts by 2020 from just 3,000 in 2012, according to a Research and Markets report.
The report revealed that while larger boats did not see much growth in sales in 2016, smaller boats maintained their growth momentum as yacht builders promoted more affordable yacht models in China.
Simpson also said that wealthy Chinese have very adventurous traveling ambitions beyond yachting.
“They are investing in all manner of exciting excursions off to the North Pole, the South Pole, off to jungle explorations and crossing deserts,” he said.