When Mike Simpson sailed into Taiwan in 1980 to oversee the construction of a sailboat, he had no idea that, more than three decades later, his name would represent an Asian yachting empire that now spans eight countries. Simpson, who grew up in England, had been cruising the world for nearly a decade as skipper aboard other people’s yachts when he decided to build a cruising sailboat at a Taiwanese yard.
“My girlfriend and I were building the boat so we could go sailing off into the sunset,” says Simpson from his longtime headquarters at Aberdeen Marina in Hong Kong. “We got as far as Singapore and someone made me an offer I couldn’t refuse. I returned to Taiwan to build another yacht and that also sold. I built a third for the express purpose of picking up more orders. My girlfriend went back to England shortly after that, and I never did get to do that long-distance cruising.”
Simpson hadn’t planned to settle in Asia, but he soon recognised the opportunities that a westerner, fluent in Chinese and intimately familiar with boats, had in a region that was relatively unschooled in yachts and yachting. Looking back, Simpson sees himself as a pioneer who helped bring boating to countries where the markets were undeveloped.
In 1984, Simpson sailed into Hong Kong harbour on his Warwick 48 and set up a floating office and brokerage business. “I was selling the Warwick yacht line at the time,” says Simpson. “The Ron Holland-designed yachts were beautiful, known for attention to detail. But some clients wanted a boat that was lighter and faster, so I picked up the Beneteau line in 1985."
Business builds up
A year later, Simpson began to represent Azimut, and with the two European brands established his current offices at the Aberdeen Marina Tower. Simpson realised early on that his business would best flourish by establishing operations across Asia as a hedge against economic hiccups in individual countries. “The economies of Asia weren’t as inter-linked as they are today,” says Simpson. “We were strongly impacted by the Japanese economic collapse in the late 1980s, and Tiananmen Square collapsed the yacht market in Hong Kong. But Southern Asia still had a market, so we decided to open an office in Malaysia, and followed with other countries. That created a balance that would allow us to survive in bad times.”
Simpson Marine has successfully traversed Asia’s economic peaks and valleys. Tiananmen Square, the rise and fall of the Asian Tigers, SARS, the global crash of 2008 — sensational headlines that didn’t always mean much in the West, but translated into instant financial downturns across Asia’s boating markets. When new-boat sales collapsed, Simpson turned to its brokerage business. “In 1997, the economic crisis had a domino effect across Asia, and we turned our whole business around from selling new boats to brokerage boats, often outside the region,” he says. “That’s how we survived that crisis.”
In the last decade, Simpson Marine has become the only yacht retailer to establish a genuine pan-Asian presence and recognised name brand. After Malaysia, Simpson launched its business in Singapore in 2000, followed by offices in Phuket in 2003, as well as Pattaya and Taiwan a year later.
But the company has invested most heavily in its growth in the last four years. In 2008, Simpson opened its first office in Shenzhen, China, followed by the second office in Sanya in 2010. Last year, it opened offices in Jakarta, Indonesia and the Philippines. Beyond growing with Beneteau and Azimut, the company also represents world-class brands like Sea Ray, Atlantis, CNB, Lagoon, Nautor’s Swan, and has built a number of custom yachts in Asian shipyards for European and Asian clients.
These days, the boating markets in Southern Asia are healthy, though not exactly vibrant. Simpson recently named a new manager, Paul Whelan, to oversee Singapore, Malaysia and Indonesia in order to grow business in those countries.
Simpson notes each market is quite different from each other. “Singapore is the most mature of the three, with better infrastructure,” he says. “Whereas Indonesia is by far the least-developed country, with only one real marina. But even that is limited by draft, and there’s little in support services. Indonesia shows great promise, but will take time to develop. Everything is relationship-based.”
In fact, Simpson realised early on that this would be the key to success in the different Asian markets, as each country was unique. After establishing an office in Malaysia in 1995, Simpson constantly flew back and forth from Hong Kong, building up contacts within the business community. The operation flourished as Malaysia became Asia’s largest buyer of superyachts in the mid-1990s. These days, Simpson’s office in Port Dickson is seeing new interest in larger yachts, though nothing like the Asian Tiger years. Most boats tend to be mid-sized production boats from 50ft-70ft, bought by wealthier individuals.
But any quick growth spurts in Malaysia are hampered by the fact that it is so large with a relatively low population density. Simpson has recently seen renewed signs of business there after the shortfall in business following the 1990s. “It has wonderful cruising grounds and there are some world-class marinas being built, which will help us a lot,” he says. “But it’s taking time.”
Indonesia is a similar story, hampered by limited marina infrastructure and lack of a yachting tradition. About 90 per cent of Simpson’s sales are brokerage boats, generally between 70ft-100ft.
The company has made a number of “nice sales” in the last year, says Simpson, but notes that it
will take time to build the right relationships for deep market penetration. “The fact that we have been in Asia for 30 years has made it easier to move into this market,” says Simpson. “We have longstanding relationships with many good customers, and that has been helpful in connecting us with the right clientele.”
Singapore has been the steadiest performer in the last year. Simpson says that the average yacht sizes are increasing, with repeat customers upgrading to larger yachts. “We’re also seeing many first-time boaters; that’s fantastic because many of them upgrade from a 45 to a 60 within a year,” he says. “We also sold two yachts at the Singapore Yacht Show at the end of April and two yachts right after the show. Hopefully, that’s an indication of the year ahead.”
Hong Kong business represents about 65 per cent of Simpson Marine’s annual sales, but a shortage of marina spaces has kept a tight lid on what Simpson believes could be a booming market. “There is a complete indifference by the government in dealing with the lack of slip spaces,” says Simpson. “That lack of berth space, coupled with the crash of 2008, means that the Hong Kong market has shrunken tremendously for us in relative importance. But what we’ve lost in Hong Kong, we’ve made up in China.” In fact, the company has focused a “huge amount of attention” on developing the mainland China market in the last two years.
“Hong Kong should be a hub for international yachting, but there are no public marinas and they don’t even have a proper boat show,” says Simpson. “Yachting is dying out due to lack of government interest, and is being overtaken by all its neighbors. China is encouraging the development of its coastline with boatyards and marinas that promote not only yachts but superyachts.”
Simpson set up Azimut’s distribution network in China in 2005, before handing Azimut China back to the Italian builder. Realising the enormous potential that China offered, Mike Simpson used the business plan that had worked for him in the other Asian markets: Establish your business, nurture the right relationships and the clients will come.
The company has invested heavily in its Chinese operations, having recently opened new offices and brought on extra staff. “A boat sales boom in China still a little bit off, but the infrastructure is coming,” he says. “The Serenity Marina lives up to every international standard for a luxury marina. At some point very soon, all the components will come together.”
Preparing for that time has involved not only setting up new offices in China, but also two new divisions; one focusing on superyachts and the other on business aviation. Simpson has been closely involved in the construction of superyachts in Asian shipyards for more than two decades. But he also realised the company needed a formal superyacht division to cater to high-end clients with different needs than his production-boat buyers. “We built a number of superyachts all through the 1990s — yachts up to 180 feet,” says Simpson. “That dwindled after the crash of 1997. In the last few years, we’ve seen a new interest in bigger yachts, largely reflected in the Azimut Grande range.”
Sales of larger yachts have been so robust, says Simpson, that annual revenues are now back to pre-crash levels. The number of units has decreased, but the dollar value has risen. “We’re seeing something of a trend,” he says.
It was enough of a trend to prompt Simpson to create a department that will attend superyacht events like Monaco, while serving as a professional conduit between clients and shipyards. “We have to have specialists in house to deal with these new builds,” says Simpson. “It’s not like you’re just adding on options to a production yacht. We needed the expertise and organisation to handle the rising enquiries from our high-end clients.”
Queries about business jets have also become so common among Simpson’s clients — even more so than superyachts — that the company has created Simpson Aviation. The yacht builder has some background in the field — it owns the Biggin Hill Heritage Hangar at London Biggin Hill Airport, a business aviation hub in Southeast England, and Simpson himself is a licensed pilot.
“That aviation market is developing far more quickly than we’d expected,” says Simpson. “Our clients who buy superyachts also buy jets, and are turning to us for their questions. We’ve been approved by several major manufacturers to be business partners and will be selling new aircraft as well as pre-owned aircraft.”
If Mike Simpson’s business strategy comes to fruition, Simpson Aviation and Superyachts will be serving Simpson’s yacht clients across Asia all the way into northern China, and possibly even into Korea. While business jets and yachts may seem as diverse as oil and water to most boating industry executives, having the two businesses together makes perfect sense to Simpson. It is also a reflection of the strategy he has used to grow his company in its nearly three decades: Expand where you find opportunities.
Simpson also just loves to fly. “When I started in this business, sailing was my true passion,” he says. “I’m following the same trend with aviation, which I truly enjoy. Aviation, in fact, is now my new passion.”