Golf club maker bets on a boom on mainland
Print Edition
A YEAR after China ordered public officials off the fairways in a crackdown on graft, the business of golf is betting hunger for the game among middle class fans and an Olympic medal for a home-grown star can drive the sport back to growth.
The PGA Tour, organizer of golf’s flagship events, says it wants to more than double the number of events on the Chinese mainland as Beijing basks in the glow of a bronze medal in Rio for Feng Shanshan, also a multi-millionaire winner on the international Ladies PGA Tour.
Meanwhile Honma Golf Ltd, maker of the world’s most expensive clubs, made its debut on the Hong Kong stock exchange last week after a HK$1.26 billion (US$162 million) listing, touting the chance of China growth as a key attraction in its prospectus. Feng, sponsored by Honma, also appears in the document — and helped out in roadshow presentations.
“Double-digit or triple-digit growth in the population (of golfers) is very achievable,” said Gregory Gilligan, Beijing-based head of the PGA Tour’s Chinese affiliate, speaking in a recent interview at the Clearwater Bay Golf and Country Club in Hong Kong, where the China PGA Tour will hold its first event outside the mainland from October 31 to November 6.
According to Frost & Sullivan, China is primed to be one of the fastest-growing markets for golf products, driven by its growing middle class and rise in disposable income. Frost & Sullivan estimates the China golf products markets will jump by more than a third to US$646 million in retail sales value in 2019 from US$469 million last year.
Still, Honma shares fell sharply on its first day of trading amid doubts about its ability to attract buyers for its high-end clubs on the mainland.
The hopes for growth in China come at a time when the sport has seen player numbers dropping globally, prompting some international sporting goods maker to cut back on golf and focus on other areas.
German sportswear maker Adidas said in May it aimed to sell most of its money-losing golf business including TaylorMade and Adams, while Nike in August said it was looking to the exit golf equipment business.
But for Honma, the time was right to prepare for expansion in China. Based in Japan but controlled by Chinese businessman and chairman Liu Jianguo, Honma’s clubs can fetch as much as nearly US$5,000 for a top-of-the-range set, with celebrities including Donald Trump reported to be fans.
“We have to prepare to capture the market in case the demand explodes one day,” said Honma’s Liu, speaking at a pre-IPO event.
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