Sail Your Way to China

WORLD CLASS CONSULTING

Mario Fan (CEO V2Future)26.05.2015

WORLD CLASS CONSULTING

www.V2Future.com2

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• Economy of China• Transition of HNW Group’s Purchasing Behavior • China Yachting Market • Market Entry• Who can help?

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Economy of China

CHINAhas been the world’s fastest-growing major economyover the past 30 yearsAverage Growth Rate:

Data sources: IMF

10%

Data sources: National Bureau of Statistics of China

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Chinese Ultra/High-Net-Worth Individual

• China has the second-highest number of UHNW individuals all over the world by the end of 2014.

• Between 2010 and 2014, the average rate of increase is more than 5%.

• By the end of 2014, China has the total HNWI popurlation of 67,000 individuals, with a total HNWI wealth of 31 Trillion RMB.

• Average age: 41 years old

• Male : Female is 8.5:1.5

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Chinese Ultra/High-Net-Worth Individual

>40%, East China accounts for the highest proportion of HNWIs

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Transition of HNW Group’s Purchasing Behavior

Spiritalization• Charitable Consumption & Activities• Education & Training• Personal Interests & Hobbies• Entertainments: films, tv programmes, theatre &

operas;• Sporting activities: motor racing & horse racing;• Nature: customerized tour, “green” food.

Socialization• A platform for communications, social contact

& information exchange;• Raise the level of sophistication;• Super cars or Yachts, a EMBA or a Programme

course, Outdoor activities, DIY travel, Fine wine or fine art.

Sectorization• Interest Groups;• Gepgraphical location, type of business or industry,

hobby or interest, or shared educational background;• Group activities: ovservation trips, social gatherings,

and tours & holidays;• Fast &effective channel for communicating

information.

Personalization• Individualized & Unique Consumption;• Pirces have reached the million RMB level;• Off-road vehicles, racing cars, famous brand

watches, or pedigree breeds of dog.

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Transition of HNW Group’s Purchasing Behavior • Annual average spending of 1,77 million RMB, 3% of total wealth;

• Top 1 Spending: Tourism & Luxurious Lifestyle;

• Main Consumption: Watches, Arts, Jewelries, Real Estate, Private Jet, Education, Antiques, Super Cars, Entertainment, etc.

• HNWI (averagely) has 3 famous brand cars, 6 watches;

Over 50% of them collect antiques, 75% of them collect watches, ancient arts & crafts, and fine wines; Most favorite sports are swimming & golf.

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Transition of HNW Group’s Purchasing Behavior

• 5% of HNWIs & 15% of UHNWIs intend to buy yachts;• Younger HNWIs’ interest in buying a yacht is slightly greater: 7%;• Most HNWIs intend to hire a yacht instead of buying one to save the

maintenance costs.

• Currently China has around 1,500 private yachts;

• It is estimated that in the next ten years sales of yachts in China will reach 100k;

• The sales will be evenly split between companies and private individuals.

The Status Symbol of Chinese MagnatesThe Most Popular Choice by China’s Super RichYACHTS:

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China’s Yachting Market Introduction

“—— A yachting market starts to develop when the per capita GDP of an area reaches $3,000 and starts growing rapidly with a per capita GDP of $5,000 to $6,000.”

• Development of Yachting Industry in China

1950s – 1970s: Embryonic Stage

1980s – early 1990s: Startup Stage

mid 1990s – now: Developing Stage

Rising GDP leads to boom in Yachting!

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Market Introduction: Size

Time Imported Number

Increase Rate %

2013 385,000 30,95%

2012 294,000 57,22%

2011 187,000 549,31%

2010 28,800 ...

Imported Yachts & Boats

Data sources: National Bureau of Statistics of China

Time Market Size (RMB)

Increae Rate %

2014~2018 15,00 bln average

(expected)

> 30% average annual increase

(expected)

Market Size

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Market Introduction: Trend• Imported Number:• Imported Value: • Average Pirce of imported yachts:

Yachting Popularization

• Middle-class consumers gain stronger spending power • Diversification of demands• Medium- or small-size yachts will have more opportunities: Fishing boats, sailing boats, motor yachts, etc.

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Market Introduction: Estimation

28%

15%38%

16%3%

Estimation of 2015 The Most Popular Type of Yachts & Boats

Business Yachts Sport Yachts Sailing BoatsFishing Boats Others

22%

20%

32%

23%2% 1%

Estimation of 2015 Yachts & Boats' Prices (RMB)

< 1 mln 1 mln - 2 mln 2 mln - 5 mln 5 mln - 10 mln 10 mln - 20 mln

> 20 mln

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Positive Factors• Sustainable Growth of the Economy > Increasing number of HNW individuals;

• Development of Ocean Culture• Adequate Open Water Area, and Facilities

for Sailing• Policy Supports for the yachts’ trading

(starting) > Many cities, like Shanghai, consider to develop the yachting industry as their city government assignments;

> Free Trade & Bonded Zone

• Development of the Urban Tourism Industry

> Linkage effects, positive interaction with other industries

• Transition of Consumers’ Purchasing Behavior > Young group has stronger spending power;

> Willing to adapt to western and luxurious lifestyle;

• Purchasing Demands for Business Purposes

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Limits• Consumption Consciousness > Traditional land culture;

> Yachting is a new topic to the public.

Not enough information provided to the consumers;

> Policy Restrictions;

Applying for the permission to sail is complicated

• Value-added Service & Management > Ancillary Services are not Ready.

Etc. Yachting Maintenance Service;

• Importing Taxes• No Marketing > Only some international yacht brands have direct experiences in China;

28%

40%

16%

6%9%

1%

Limits Analysis

Ocean Culture Policy Relevant CostsPirce Convenience Safety

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Lack of Marketing Top 5 Imported Yachts in China

• Feadship 45M – Holland, 2013• Ferretti 112’ NEXT – Italy, 2012• Horizon RP 110 – Taiwan, 2012• Sunseeker Predator 108 – UK, 2010• Azimut 105 – Italy, 2010

Although Dutch yacht builder Feadship holds the record of the largest delivered yacht to the chinese customer, Chinese customers are not family with “Dutch Quality”.

In 2013, the most popular brands are from: > Italy: Azimut (7) & Ferretti (4) & Pershing (1) > UK: Sunseeker (10) & Pricess (2) & Fairline (1) > Taiwan: Horizon (1) & Ocean Alexander (1)

Data Source: China Boating

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Go-to-Market

1 Understand The Market

2 Precision Marketing 4 Step on

the Ground 5 Keep the Customer

Happy3 Choose the

Right Partner

The PortalWho Know How

• Mixed Eastern & Western Professionals• Deeply Understand both Markets• Value Resources and Connections

Insight

Big Data AnalysisOffline Exhibitions

Marketing

Online MarketingOffline Events/ Cooperation

Operation

3 Choose the Right

Partner

Local Sales Creation & OperationSupply Chain & Logistic

Service

Maintaining Customer Relation

You are HERE!

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Offline Exhibitions

Bar: Total visitors (1 Hundred); Line: Total Exhibitors

Yachting Exhibitions in China

• Most Exhibitors: Brands of (Super)Yachts, Private Jets, Super Cars, Equestrian, Golf, High-End Real Estate, Overseas Tourism, Education, Arts, Watches, Jewelriess and etc.

• 2015 Yacht Exhibitions in China: 18• How to make a right choice? > Location > City > Size of the Exhibition > Organizor > Policy Supports > ...

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Online Marketing

• More than 70% of HNWIs will obtain information from the internet;• Women: TV (54%), Magazines (57%);• Men: TV (48%), Magazine (47%);• Younger people: Internet (70%), Magazines (59%);• Old people: TV (56%), recommendations from family & friends

(57%), newspapers (46%)

The Internet is now the main source of information for consumer products.

MARKET YOURSELF ONLINE

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V2Future: The Club of LeadershipThe partners who make us the best :

• “2015 Yachting Shanghai” (The Strategic Partner)

• Baidu (The only EU based Reseller)• Tencent (The first global Ads Reseller)• BBD (No.1 online big data teams)• Union Pay (No.1 offline payment

database)• Leading logistic company

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Thank You !