KZ RV At The China (Beijing) International RV & Camping Exhibition].
Zhang Lei DiscussesThe Business Of Markets & Change.
MRV: The Buzz, Your Outdoor Lifestyle Insider.
The Business Of Markets & Change: Zhang Lei
JZ RV Exporter Discusses Emerging RV Culture & Industry Build At
The China (Beijing) International RV & Camping Exhibition
The growing industry of the RV market in China can be influenced from many different angles. Different facets of the business from regulations to campground design to RV manufacturing set ups dictate a certain level of business flow. Watching the business evolve from the inside from both sides of The Pacific is a unique position to be in. Zhang Lei of JZ RV has first-hand experience of this nature. Li sat down with MRV: The Buzz Editor In Chief at The China (Beijing) International RV & Camping Exhibition in Beijing to discuss evolution, design and the growing diversity of the China RV Industry.
Zhang Lei: The first brand name that came to the Chinese market…I was helping the Chinese manufacturer represent them negotiating the whole thing and trying to set it up. The company’s name is K-Z RV. They are located in Indiana. About a year and a half later, my contract was expiring. Basically, the KZ manufacturer was asking me to become a consultant for them. So after that, I did training, consultant of sales, everything.
The Buzz: Were you in the RV Market before?
ZL: With my family, our background is doing conversions. That's the reason we have a lot of resources and experience a lot of market. Right after that K-Z RV and this one company in China they tried to seize any opportunities. Basically, nobody really had that kind of experience [here]. That was almost four years ago.
ZL: Can you talk about how much this industry here has changed in the past couple years?
JL: I can say this. Five years ago most of the people from China, they were looking for somebody to work with them and either buying complete units or they were willing to properly work with a US manufacturer. So instead of production line, it was semi knocked-down units…what they called the SKD and the CKD. CKD is meaning complete knocked-down unit. And SKD is a semi knocked-down unit which means the complete units. They were going to tear [the units] down completely…100%, even for a US market to China. And then they were going to set up production line and bring a team from the US market and assemble [here]. But after that, most of the people [realized] -- most of the parts are already built in China, maybe 80%. So most of the parts are actually being sent over to the US market.
The Buzz: And then back.
ZL: So for most of the people, the RV parts pretty much covered the whole market already. Now most of the Chinese manufacturers are buying from the China market.
The Buzz: So as far as the Chinese manufacturers, they now don't have to go through a middle-man. They just get it direct and build here correct? Are there's certain things they have to bring in from the U.S. market like maybe awnings?
ZL: Most of the time I believe it's steel chaissis. And slide-out units. For most of the awnings, [they are] already built in China.
The Buzz: So we know a lot of Chinese, are coming to US and renting RVs. Can you talk about the expansion here of the RV lifestyle and specifically the current expansion of campgrounds here in China?
ZL: The measure of services between the US campground and the Chinese are totally different [especially] in the way of culture.
The Buzz: Can you give an example?
ZL: For the US market, most of the people are using campgrounds as a parking spot. They don't really design or provide many services. Personally, I have experienced a lot through the US market and also from the Chinese market as well. It is [also not] only the environment but also the price. For example, like a KOA, they charge between 20 to 50 or 60 bucks per night, and they only have a pretty small spot. It doesn’t matter if you have a fifth wheel or a whatever, there's only a provided spot and electricity and maybe an antenna, TV, and stuff.
The Buzz: But they're being forced to change now, too, because of ADA and other elements.
ZL: I was talking about in general…the 25 of 26. I'm not talking about their other RV resorts and others that are upper class…I'm just talking in general. In China, there's no in general at all [in terms of] that kind of concept. Most of the people [here]…they're getting their own campground, and they want it designed especially targeting to their environment at that spot. Everybody is willing to get up to a standard because there's no standards at all. They may have a little bit, but the thing is they don't really have a rule to tell people, "You have to do certain things to become a standard." So, everybody, if they're willing to have their own campground set up in China, it could become a standard. That way they can use their campground as example. So they're willing to make a really high-end -- provide full services.I can give you one example… Sharmel. I don't remember the English name, but I've been there so many times. They're buying so many different trailers. They're buying from Australia and they have a US market, so they have many different brands.
The Buzz: They’re buying trailers just to rent?
ZL: Yeah. They're using as a mobile hotel.
The Buzz: See that's a different thing.
ZL: Not only that, most of other people have a different idea, [that] they can sell the spot. They can either sell the trailer to you and also they can sell [you] the whole spot. So, meanwhile, during the hot season, you can come back there to take a vacation. But at some other time, if you're not going to stay there for a couple weeks or whatever, they’re going to help you to rent it out. So same as hotel concept.
The Buzz: How does that affect the actual kind of RVs people use because they are used as mobile hotels in the winter. You don't see that as much in the US. It’s more of a seasonal progression. What's your thought on that I mean since you look at both markets?
ZL: Northern China & South China. In South China it’s pretty much of the 365 days they can use a rental 300 days. Up north the thing is it is the same as Indiana. The temperatures can get really cold and even cooler than that. So, the most of time not many people are using their campgrounds. But Southern China because the season and the temperature is pretty good, they don't have to worry about that. Maybe just temperature drop a little bit.
The Buzz: How do you see your business being affected by the growth spurt of the business here in China as the business in the US keeps going up?
ZL: That all depends…because around 2020 with the government support, many people [will be] already stepping up this RV market. The thing [here] is [that] every single campground has their own concept or whatever…they're trying to write it down, trying to sell it, for the people in China.
The Buzz: Will the price standard be the same?
ZL: Completely different. Because for every single campground, the size is not the same. Design-wise, it is not the same. The site size is not the same. And the scene is different. Every single one, they are targeting as a unique scene. And they're divided into maybe three, four five different sections. Every section has different design…
The Buzz: You mean like cabin, containers, fifth wheels?
ZL: Something like that. They might have a high an area with the fifth wheel, [that are] 100% imported from US or from Germany, something like that. So in that section, of course, the price will be a lot higher. The sizes are different, the models are different, so it's really hard to emphasize or give a standard because there’s no standards at all. But after 2020, the market will grow and mature as people can see which way they're going to go, or what kind of standard can actually influence the market, nationwide. Then they might have a certain thing, a standard. By that time, I believe, everybody should be able to book their spot online.
The Buzz: How would you describe the RVer in China? Is it just evolving, or is it just they want all different types?
JL: That is really hard to define. [The one issue is that] China has different regulations. At a certain size of a vehicle, you have to have a special driver's license. We’re limited to most of the people who are willing to drive from city to city.
The Buzz: Most people get into a Class C? Class B?
ZL: I got a class B Mercedes [RV]. But that’s more of a business. Class C, you have a bed back there and a restroom. It’s not the same
The Buzz: And no class As?
ZL: Well class A you have to have a really special license to drive that.
The Buzz: Almost a trucker license…
ZL: Right and also on a certain part of the road it's not allowed. Of that part, I'm not sure.
The Buzz: What has been the most surprising thing to you having seen it over the four years?
ZL: I'm pretty shocked this year. The show started yesterday, right?
The Buzz: Yep.
ZL: I didn't come out yesterday. But when I took the tour today, I was pretty shocked. Most of the US RVs and trailers are gone.
The Buzz: So it used to be all mostly US?
ZL: Yeah. For the past two or three years, there were so many brands from the US market. Everybody was selling either US or European models but now, I can see it pretty much 70%, 80% of the US brand names are already gone. So the Chinese brands and manufacturers take over.
The Buzz: That's something the American market has to think about. They have some competition now.
ZL: And, you know…I've re-communicated with a lot of manufacturers in the US, and they don't really care about the foreign market first of all. They are pretty arrogant and pretty conservative. They're only targeting on their home market which means competing with each other.
The Buzz: And it’s a global market.
ZL: Right. Well…though they still think that the Chinese market is not big enough. I know a few other brands have already stepped their foot into the Chinese market but most of the people, they're still competing with each other in the US market. That's what the situation is.
The Buzz: It will have to change.
ZL: I know. I know. But when they do want to step into the Chinese market, I believe it's going to be a little bit too late. I'm not saying 100% too late but…
A graduate of New York University's Tisch School
Of The Arts with degrees in Film/TV Production & Film Criticism, Tim
has written for magazines such as Moviemaker, Moving Pictures, Conde
Nast Traveler UK and Casino Player. He enjoys traveling and distinct
craft beers among other things.
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