Asiaweek.com | Thrill to a New Industry

NOVEMBER 17, 2000 VOL. 26 NO. 45 | SEARCH ASIAWEEK

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From the editors of Asiaweek.

Thrill to a New Industry
The business of leisure is only beginning in China. But as free time and spending power increase rapidly, expect the infant to start toddling into real money
By RON GLUCKMAN

Feng Hua is about to have a life-changing experience. One second, the sensible 24-year-old businessman from Shandong province has his feet firmly planted on the ground. The next, he's hurtling earthward from a precarious platform 50 meters above the ground. "That's one thing I'll never do again," he says, nervously pulling on a cigarette after his first — and last — bungee jump. "It's so scary. I felt like my heart was going to pop out."

He may not be coming back for more, but there are plenty more would-be thrill seekers where Feng Hua came from. Beijing boasts nearly a dozen bungee-jumping sites just three years after the first one opened north of the city. Almost completely agricultural a few years ago, the countryside around Beijing is now chock-a-block with recreational facilities. The same is true all over China, but it is in the major cities where an increasingly affluent middle class is attaining the right mix of disposable income and free time to fuel an explosion in the mainland's leisure industry, activities from rock-climbing to bowling to dancing. "China has a huge untapped market for travel and leisure," says Mei Zhang, a native of remote Sichuan Province who thinks she's spotted a tremendous opportunity. Mei returned to China this year after earning an MBA at Harvard University in 1996 and working for investment groups and consultancies. She has just launched a website called WildChina.com to try to cash in on the leisure and travel boom.

Mei identifies a group of between 1 and 2 million urban dwellers in China who might be termed the "thrill-seeking yuppies." She notes that they earn only about $480 per month, but cautions against putting too much store in such numbers. "It doesn't sound like much by Western standards," she admits, "but don't forget, these people have no school loans, they pay no rent or low rent, and the famed Chinese penchant for saving doesn't exist for this generation."

In a recent study on mainland spending, market researcher Euromonitor concurs that traditional formulas don't accurately explain today's China. Instead of Western terms like "middle class" they designate a "comfortable class," defined as those with sufficient spending power to become the target of most brand manufacturer advertising. Euromonitor is talking about a much bigger group than Mei — more than 600 million people — that has reached this class level.

Euromonitor reckons that consumer spending on leisure and recreation reached $16.9 billion in 1998, more than double the 1994 total. The numbers may well amount to little more than guestimates, however, because the government isn't yet collecting data. But whatever the real spending might be, almost everyone agrees that the infant leisure industry will soon be toddling into real money. China's six-day workweek when the 1990s began shrank first in 1994 to five-and-a-half and more recently to five. "Everybody is living for the weekend now," says a Xinhua reporter. "We shop, we spend. It's a new concept and a big thing. We call it the Big Weekend."

Asiaweek set out to discover how China's newest industry was developing. We found mainlanders discovering and embracing many of the same pursuits that consumers in more advanced economies have loved for years. Not that China's leisure industry will necessarily follow the same path as everywhere else. Just ask any of the people who developed dozens of dead or dying theme and amusement parks. But for the entrepreneur who hits on the right formula for excitement at the right time, there's plenty of money to be made.

Climb Every Mountain
Dai Yun, one of China's premier mountain climbers, recalls the thrill of tackling his first hill. Dai, then 22, was fresh from mandatory military service, which gives many urban mainlanders their first taste of the outdoors. "I liked Chinese drawings of all these things: mountains, trees, rivers and open-air," he says. "I wanted to see them myself." That was 16 years ago, and Dai has climbed countless mountains since. He still savors the views, the silence and the sense of freedom, but the muscular climber has traded in his old army boots for state-of-the art climbing equipment: European crampons and ropes, American tents, and top-notch and trendy outdoor gear from Australia. This stuff is not cheap.

But the expense is not preventing a big expansion in nature activities across China. Says Saeri Ziebart, Beijing marketing director for an online entertainment guide and bookings service called ChinaNow: "People want to get out and do something different." In other words, whether you're talking about rock climbing, rafting or horse riding, China's outdoors is suddenly the place to be — and be seen.

None of this should suggest that the notion of the rugged individualist has taken root in China. Group participation is a peculiarly Chinese characteristic of the back-to-nature movement. It has only increased the opportunity for outdoor entrepreneurs. Dai launched Beijing Youth Rock Climbing Group mainly as a way to share his interest with others. It has grown into a full-service business that rents and sells equipment, provides training, and organizes mountain and ice climbing expeditions.

China has a tradition of scenic appreciation that goes back thousands of years to ancient ink paintings and poems praising nature. For most urban dwellers — at least those who weren't sent to the countryside during the Cultural Revolution — the great outdoors has mostly been out of reach. But these days, a nascent lust for nature is only exceeded by the growth of entrepreneurs who want to provide access to it. "All the thrill sports are making their way to China," says Kaiser Kuo, an editor who coordinates coverage of these activities for ChinaNow.

The range and diversity of outdoor activities seem to grow almost daily. In Chengdu, one new craze is four-wheel drive safaris, which take tourists on bumping rides into the wilderness. Such pursuits, however ordinary elsewhere, represent revolutionary changes in the mainland leisure scene. And even familiar activities tend to be done differently in China. "In the outdoors, they need handrails and stairs," says Kuo. "It's not like the usual concept of back-to-nature. Realize, it's all new to them. You start with basic things, like camping. Most people [overseas] grew up with it. But here, it's brand new."

Drunk With Success
Three kids are crawling up their father's back, cackling with glee. Chevin, 10, Chenghan, 9, and Shuling, 7, pester papa Roy Wang to start the engine — quick. You've never seen children so anxious to get rolling. Helen Lee is nearly as eager even though it's only been a month since her crash. "I nearly knocked myself out," she recalls. Then, rubbing an arm that still aches, she slips behind the wheel. Smiling as she speeds off, the Shanghai woman shouts over the engine roar with a lame explanation: "It's too tempting."

Lee, 28, isn't alone in yielding to this injury-defying pastime, which is the rage in Shanghai and likely to roll on across the mainland. "Go-karts are hot now," says Arthur Jones, editor of that's Shanghai, an entertainment and listings magazine. Half a dozen tracks have opened since 1997, when Disc Kart became the first in Shanghai and first indoor track in all of Asia, according to manager Ren Guanyi.

At $6 per ticket, this pursuit is not cheap. And that only gets you 10 or so spins around the track, depending on how hard you put the pedal to metal in the allotted eight minutes. The center is open until 4 a.m., so it has become a favorite of night owls. And a fully-stocked bar helps the late-night popularity. That's one difference from America and Europe, where kids have been swooning for go-karts for decades. In Shanghai, this is no kiddie sport. "The only place in the world where you can legally drink and drive," enthuses a Hong Kong trader on a recent Saturday night. Indeed, alcohol is not merely allowed, it is encouraged. Anyone spending 100 yuan at the bar is rewarded with free, if wobbly, spins around the 500-meter track. Ren says about 70% of his customers are Chinese: "Many companies rent the whole track for a special event."

Bowled Over
Wang Hui-Ming can't remember the precise moment he was hooked. Perhaps it was the first time he watched the ball explode supercharged into the pins. Or felt the adrenaline rush of competing in his first tournament. Whenever it was, Wang is a bowl-a-holic, unable to go a day without lacing up his shoes. He bowls 10 games a day, every day. And he reckons he spends an astonishing $1,200 per month to get his fix. That's 47% more than the average urban household in China spent in total last year.

It started innocently enough. Wang was introduced to bowling in the mid-1990s along with much of Beijing. With only a few lanes available at out-of-reach prices, the sport at first got nowhere. But then in the mid-1990s, bowling boomed in big cities like Beijing. Wang remembers starting with a few friends looking for a good time. Then came sessions with potential clients, perhaps two or three times a month. And before long, the lark was a necessity. Nowadays, Wang mostly bowls solo, though his wife and child occasionally join him on weekends.

Wang isn't alone. The bowling craze has cooled in some cities where it first caught on, like Shanghai, but it is still spreading in the hinterland, where new alleys open daily. "The peak year was probably 1997," says Lui Zheng of the Beijing Bowling Association, which represents 60 members with nearly 2,000 lanes. Shanghai leaders actually considered a ban after the number of lanes exploded from nothing to 1,500 by the end of 1996. All this interest makes bowling a big, big business today. By 1997, China was the world's largest market for bowling equipment and had over 10,000 lanes in use, according to the Sporting Goods Manufacturers Association (SGMA), a trade association of North American manufacturers.

And bowling is more than just numbers. Visit the Beijing Gongti Hundred Bowling and Tennis Center, which claims its 100 lanes make it the world's largest single-floor bowling center. It is surely also one of the ritziest, with Roman statuary and marble floors. Gongti serves complimentary fruit and tea at the lanes. That way addicts like Wang don't have to waste valuable bowling time in the snack bar.

We Are Not Amused
On a scorching summer day earlier this year, Beijing engineer Shan Tao doesn't need a slide rule to sort out his overheating equation. Grabbing a round inner tube, he dives into a snaking cylinder. Seconds later, he's speeding down a water slide, screaming like a child. "The kids like it," he says after spilling from the slide into a cool pool at Lakeview Water Park, suddenly an adult again.

It is hard to imagine a better place to survive a blistering July day than this aquatic playground in Hauirou county, 90 minutes north of Beijing. It's a daily beach party with Bob Marley reggae music and burgers sizzling on scores of grills. The park made a big splash when it opened in late 1998. But this year, on a hot summer day, only a few hundred people are chilling at Lakeview. "It's nice, but not too popular," Shan admits. "People say it's too far to come. We like it, but it's also expensive." Such complaints are all too common at mainland amusement parks. Indeed, at ticket prices that range from $8 to $40 for a family of four depending on the specific destination, price can deter many from visiting.

Price is but one problem among several that have made amusement parks — despite a booming economy and warm welcomes from local governments — anything but fun and games in China. An estimated 2,000 parks were launched in the mainland between 1994 and 1999. Perhaps 80% are losing money or have already closed. Part of the problem is overkill. Even one of the world's truly original attractions, the Great Wall, is swamped by artificial amusements like cable rides, bungee jumps and huge mountain slides. Little wonder then that the artificial turrets that tower over the expressway to the Wall herald the unfinished Wonder Lanes Amusement Park, which is shaping up as a grim fairytale.

There are other failures. American Dream Park, launched in 1996 in Shanghai by a group of investors that included Robert Miller, the founder of DFS Inc. American Dream was to be the first of five huge theme parks designed to deliver a Disney-style experience to every part of the country. After the Shanghai park was built for $50 million however, none of the rest were completed. American Dream Park today is deserted and decaying.

It had begun well enough. Soon after opening, the park's partners showed Asiaweek lavish rides in sections called Miami Beach, Main Street USA and Wild Wild West. The founders created unique characters for the park that tied into a passel of selling opportunities. On paper, it looked good, but the plan made many false assumptions. Perhaps most fatal was the location. Around the world, parks are built outside big cities, where huge tracts of affordable land are perfect for massive parking lots and expansive attractions. In most countries, of course, customers have cars. But not in China — at least, not yet. The U.S. partners in Dream Park did not return calls from Asiaweek. Other parks apparently didn't consider how public transportation could effect attendance. No bus service often equals no customers.

The Beat Generation
Girls swirl in short skirts as spicy Latin rhythms pound a packed dance floor. At Havana Club the beat is Hot, Hot, Hot, and the dancing is Hotter. One local writer called the joint, "God's gift to the single woman" — a dance haven in a city where men are often wall-flowers. And this lively Latin cabaret sits next to the decidedly unglamorous Workers' Stadium.

But the location has worked in favor of Muslim-food magnate Fan Jun, owner of the Havana Club. Beijingers are used to gathering at the stadium for ballroom dancing. Now there is another reason to come. "People in Beijing are always looking for something new," says club publicist Ernie Zhao. "They love to dance. This is the perfect combination, a cool dance they can learn and new music, a new style. They love it."

Entrepreneur Fan has a knack for anticipating trends. In 1993, he opened one of Beijing's first Xinjiang restaurants. Within a year there were a dozen copycats. "Back then, Uighur culture was virtually unknown to most people in China," says Fan, who counted himself among the uninitiated until university. There he met future wife Sadat Hamait. Fan found her Muslim culture exotic — and was willing to bet others would, too.

His Uighur restaurant was a big hit — there are now two A Fun Ti eateries. And the Havana Club may have a little of the same magic. Starting with a core group of salsa-starved fans from South American embassies, the Havana Club quickly became the hottest ticket in town. And salsa nights, even at $60 for ten lessons, were standing room — make that dancing room — only. "It went by word of mouth," says Zhao. "The first time, we had 40 or 50 people. Each night, it grew until we had hundreds."

Other bars around the country are also working overtime to attract increasingly trend-conscious customers. Forget karaoke TV. Raves are being held from Nanjing to Kunming. The Shanghai craze is interactive bars where clubbers participate in pottery or glass-making, archery, even boxing, right in the bars. "For others, they've traveled in the world and seen so much, but for us, in China, it's exciting to try new things," Fan says. "To us, salsa isn't just music, it's a whole new world."

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