At Rodriquez Consulting we have treated the matter of emerging economies and the yachting industry several times, and always quite ahead of time in our forecasts. Now thanks to a new comprehensive Yacht Industry research and our recent business talks with some of Korean largest ship builders and several Chinese players that show great interest in the yachting industy we have an even better idea of how the market is going to evolve in those areas both from a buyer point of view and from a builder/dealer point of view.
Differently from plenty other professionals we have made several considerations that relate not only to the industry economic drivers but also to cultural and behavioural aspects that had and will have an effect on the Asian emerging economies and specifically those of Korea and China.
As a matter of fact those European major players who had invested heavily in China already some years ago following the trend and frenzy of the alleged Chinese yachting needs highly underestimated a number of cultural factors that have, in the best cases, delayed their expected returns on investment and in the worst cases, we’ve seen these players withdrew any direct presence/investment on the geographical area.
Korea, however, is a different story, the country already has an established tradition in commercial shipbuilding that makes this industry sector a prominent one on their national GDP, which does not necessarely mean they are ready to build and market luxury yachts to EU or U.S. standards of quality and most importantly market them correctly to communicate the added values a luxury product is commited to deliver to its target market.
Because let’s face it, there is a vast gap between quality and perceived quality and unfortunately neither of the above mentioned countries have a national brand legacy (e.g.: made in Italy) to carry with them in terms of perceived quality which as consequence means that they will have to litterally double their efforts in communication to prove they can deliver in the highest end of the luxury.
Furthemore, they will have to build impeccable after sales services on locations where severals Asian yacht owners enjoy their yachts in the U.S. and EU.
We admit that they certainly can be competitive at the price level and in these still turbulent economic times this will be an advantage stimulating the apetite/desire of a few prospective customers, but is it enough ? No it’s not ! Why?
Paradoxically, even highly standardize products such as the Apple Ipad that competes in the much more price sensitive market of consumer electronics and that bluntly states in the back “designed in California built in China” largely owes its success to Marketing, After sales service, and Corporate Communication planned, directed and executed in U.S. and EU, and solely thanks to that thoughtfully built and maintained brand that they can market at a premium price and deliver those values of high-end product in their segment even if their product is performance and price wise objectively (from techical comparisons) worse compared to its direct competitor from Samsung.
Lastly, Korean shipbuilders are smart and have already engaged in business with our Italian Yacht design firm of choice and now it is for us to see if they will decide upon some guidance to make their U.S. and EU market entry appropriately to pave the way for success.
For more info write to Rodriquez Consulting Managing Director Leopoldo Rodriquez (click here to contact)