China Rendez-Vous boat show shrouded in gloom amid slowing economy, anti-corruption campaign
China Rendez-Vous, the country’s erstwhile coveted luxury fair ‘starring’ super yachts, private jets and celebrities is going through a dark period under the combined influence of scandal, anti-corruption campaign and a slowing economy, reported the Guangzhou-based 21st Century Business Herald.

China Rendez-Vous boat show was held between December 7 and 10 in Sanya, Hainan on beautiful sunny days, although what was in stark contrast with the good weather and splendor of the exhibition was the fewer visitors and much lower trading volume it generated.

“It’s becoming much harder to make deals during the exhibit period, especially for this year. Fewer potential customers would come on board,” Jin Jiayi, Asia area marketing manager for Beneteau, a French yacht maker, said.

That may be the reason why exhibitors partaking in the high-profile event have changed from international brands to domestic ones, with more obscure goods like tapestry, Buddha beads and tea being simultaneously displayed.

The larger venue and broader range of brands intended to lure middle-class customers have failed to reinstate the boat show’s past glory.

China’s top luxury lifestyle exhibition

Zhou Hang used to work for Lawrence Wang Dafu, the founder of China Rendez-Vous. “At the first two events in 2010 and 2011, the exhibition scale was not as big as it is now. But back then, all booths were bustling with visitors and VIP customers with high personal net worth,” Zhou recalled.

That was the prime time of China Rendez-Vous, hailed as one of the major yacht and business liner exhibits in Asia that aims to promote yachting among China’s super rich as a way of life and a venue to engage with business partners.

At the first China Rendez-Vous in 2010, 150 exhibitors and nearly 5,000 visitors came, while at the fourth one in 2013, there were over 270 exhibitors and 20,000 visitors.

According to some exhibitors, the event in the initial years could generate several billion yuan in deals and quite a number of follow-up orders.

Besides the sponsor and operator’s thoughtful preparation and service, the success derived from the rise of China’s new rich and its rapid recovery from the global financial crisis.

When the global economy’s growth averaged at merely 3.3 percent in 2010 in the aftermath of 2008 Financial Crisis, a four trillion yuan’s investment in China by central government propped up the country’s GDP growth to 10.6 percent. In the same year, China overtook Japan to become the world’s second-biggest economy.

The robust growth stimulated consumption of especially luxury goods. Based on Bain’s report on China’s luxury market, in 2009, Chinese bought a total of 156 billion yuan of luxury goods, while in 2013, the figure shot up to 350 billion.

Over the years, the rising popularity of Shanya’s Rendez-Vous boat show echoed with the country’s booming luxury market, although no one expected that a U-turn was on its way.

Embattled boat show

Although Chinese billionaire Wang Dafu, the chairman of property developer Visun Group, is the founder of the Rendez-Vous in Sanya, sponsors of the annual event are known to be Sanya municipal government and Hainan provincial government, because yachting is deemed by the officials as a promising and fledgling local industry.

Meanwhile, attendance of celebrities in China’s business, entertainment and sports communities added to the official endorsement, making China Rendez-Vous a high-profile annual gathering of super-rich that could hit national headlines.

However, the ‘brand name’ value soon evaporated along with an alleged prostitution scandal, and amid China’s efforts to crack down on gift-giving practice that equals to or borders on bribery.

In 2013, a group of what’s described by media as “second generation rich” came to Sanya, throwing private parties on the sidelines of China Rendez-Vous. The salacious pictures of guests with suspected call girls soon went viral on Chinese social media, with netizens lashing out at the boat show for providing a venue for such indecency.

Following the scandal, from 2014, super-rich and celebrities began to shun the show, taking away the shine from the show.

Bruno Lannes, a partner with Bain's Consumer Products practice, believes one major reason for the Chinese to purchase luxury goods like yacht was for giving gift. A Bain survey showed that from 2012, the practice began to recede.

It was previously reported that the customer flow for department stores and malls had been considerably affected by central government’s anti-corruption campaign since 2013, and by 2015, international luxury brands began to cut down outlets in China one after another against this backdrop.

China’s faltering luxury market further dragged down the already embattled China Rendez-Vous, with international exhibitors retreating from the event due to low returns.

Sponsors of China Rendez-Vous stopped to release trading volumes and detailed information about its exhibitors since 2015. “(We could) still make some deals in 2014, but from 2015, it’s become much harder,” Jin Jiayi said, noting that Beneteau was considering if the high costs for exhibiting in the event were really worth it.

Wang Dafu admitted to the 21st Century Business Herald that international yacht makers were leaving. “They took part in and found the sales channel was not that good and then their enthusiasm got dampened,” he said. Now, with the absence of world-renowned yacht makers like Brunswick Group, Ferretti Group, Azimut and Heesen, domestic makers are rising to be the staple of the exhibit.

According to Sanya Rendez-Vous’ sponsor, the 2018 exhibit greeted over 70 exhibitors with over 100 brands, covering a floor area of 8,000 square meters. It’s noted that yacht makers participating in the show this time nailed down orders worth over 1.2 billion yuan.

“If you had come in the earlier years’ exhibit, you would be disappointed with the scene now,” an exhibitor said, adding that “the show used to feature super yachts but now tunes to small and medium-sized ones.”

Some other exhibitors expressed hope that the event’s sponsors could lower admission fees while avoiding lowering the bar for brands in order not to compromise the positioning of the luxury lifestyle show.

According to Wang Dafu, now the operator of the exhibit, other hindrances would be high taxes levied on imported boats and regulation that usually makes yachting in China not that convenient. For this reason, many Chinese customers had turned to overseas markets to buy their super yachts, the South China Moring Post previously reported.

Despite all the setbacks, there remains a silver lining. With China’s central government continuing to cut down on commodity taxes in bid to boost consumption, the country’s luxury goods purchase in 2018 has scaled to 669 billion yuan, accounting for 33 percent of the whole. More importantly, between 2015 and 2018, the increase of domestic luxury consumption accomplished by Chinese buyers doubled that of overseas.

Federica Levato, a Bain partner, believes that by 2025, half of the global sales of luxury brands would come from the Chinese market. And facilitated by the more transparent free trade zone polices of Hainan, it’s expected that China Rendez-Vous in Sanya still has a chance to come back into positive spotlight.  

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