A battle is unfolding in the South China Sea: the fight to win the pocketbooks of China’s richest citizens.
Over the next four days, 300 of China’s wealthiest are being flown in on private jets by makers such as Boeing and Cessna, as an unprecedented number of companies pile onto Hainan Island. The occasion? The annual Hainan Rendez-Vous yacht and jet show in Sanya, southern China’s travel hotspot for the ultra-wealthy.

Against a landscape of BMWs and ocean bay, the yacht companies are showing off their splashiest toys: boats selling for US$1 million to US$100 million and more. Everything — from the parties to the price tags — is getting bigger in Sanya’s Visun Marina, where 200 companies are rolling out the red carpet and displaying superyachts measuring more than 35 meters in length. All of them have courted the local media in the hopes of spreading the news about their lavish luxury goods, undoubtedly the most expensive category of the luxury industry.   

It will take a lot of attention to build what is still a tiny market. China’s yacht owners make up a mere fraction of the 2.7 million high-net-worth individuals whose assets are more than 6 million yuan (nearly a US$1 million) and the 63,500 people who have assets worth more than 100 million yuan (nearly US$16 million), according to Shanghai-based wealth research firm Hurun Report.

Only 100 Chinese nationals own yachts measuring around 12 to 18 meters, according to Hurun. In 2006, when the U.S. had a comparable number of millionaires, there were around 7,000 American yacht owners.
Yacht companies believe the tide is about to turn. Poly Marquis Yachts, a joint venture between Minnesota-based Marquis Yachts and Chinese state-owned company Poly Technologies, is a newcomer to the event and has brought four boats, the biggest around 23 meters, hoping to sell them all. Prices are close to US$5 million, tax included. The company’s sales from Chinese buyers have increased 20% year over year for the past two to three years, said Michael R. Marcotte, a Poly Marquis general manager.

The stakes are higher now as the market is growing and impressions have yet to be formed, said Vincenzo Poerio, chief executive of Italian yacht maker Azimut Benetti Group. Most Chinese buyers don’t know how to differentiate the brands and are eager to dive in.

"The Chinese have a lot to learn about yachts and we have a lot to learn about selling them to the Chinese,” Mr. Poerio said, adding that he aims this year to sell four to five yachts that would likely cost more than US$30 million each. Over the past two years, he sold seven to Chinese entrepreneurs.

Meanwhile, Mr. Poerio is rolling out a new line of China-specific yachts that can be built with standard karaoke rooms and can customize amenities such as helicopter landing pads.

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