Niche market for young entrepreneurs
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E-mail China Daily, July 23, 2012
Do you have an online shop but are fed up with numerous competitors selling the same thing? Have you wracked your brains to find a virgin field to make money? Well, one group of young entrepreneurs seems to have found just that niche in the crowded online market.
The five university friends from Hangzhou, capital of East China's Zhejiang province, have just made their first lucrative sale of a helicopter via their website 365feiji.com, an online shop catering to the burgeoning private jet market.
They started the website in April last year, but it was not until June this year that they made their first sale. A man from Northeast China purchased a secondhand Robinson R22, a single-engine light utility helicopter.
"He said he needed an aircraft to pick up his company's VIP customers," said Dai Yunong, one of the co-founders of 365feiji.com.
Dai declined to reveal more information about the buyer.
The young entrepreneurs set about trying to find suitable sellers and eventually found a 5-year-old helicopter that had been bought in Thailand for about 2.8 million yuan ($439,600) by an aircraft rental company in Changsha, capital of Hunan province, who were now looking to sell it.
In two weeks the deal was made and the buyer paid about 2 million yuan for the helicopter.
Following the transaction, inquiries about buying private jets have flooded in. "There are phone calls asking about it every day. But it takes much longer to buy a jet than a car, from a few weeks to a few years," Dai said.
"We are gambling on the future of China's private jet sector. In the coming years, private jets could be as popular as private cars. We plan to be the Alibaba of the general aviation industry."
Alibaba is an online wholesaler, and the success of the Hangzhou-based listed Internet giant has inspired many young people to try their hand at online businesses.
China's superrich have a growing appetite for private aircraft, despite strict government restrictions on the sector.
In 2011, there were 132 private jets in the country, less than 1 percent of the total number of jets in the United States. But some optimistic estimates predict in 10 years, China's market for private jets will be worth about $11.68 billion a year.
Chinese authorities have promised to gradually open the previously tightly controlled low-altitude airspace below 1,000 meters.
Dai and his partners have now expanded their website to a 15-employee company.
Though the private jet industry is promising in China, it faces serious challenges, including a lack of trained pilots and maintenance technicians, a complicated process for foreign professionals to obtain work permits and a comparatively high tax rate for imported jets.
But the group views those obstacles as opportunities.
"There is a gap for talented people in the sector, for instance about 5,000 to 6,000 maintenance technicians are needed right now," Dai said. "One of our key businesses is to work with aviation schools and match talented people with jet owners."
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