Conversation with Tiger Bi

This morning I had a conversation with Tiger Bi, the founder and CEO of China Golf Group. If your name is Tiger, I don't think there is a more fitting career path than golf. Their mission, as stated on their website, is to "create the first, the best, and the largest golf chain in China." So far, they have been contracted to build and design 20 golf courses throughout China, and hope to soon build and own their own golf courses. They are currently in the process of listing on Nasdaq, and here are a few interesting things that Tiger said in our conversation:

-The advantage to building courses in China is that people don't care how many members there are at a golf club, and you can presell memberships once you break ground on a golf course. At Shenzhen Golf Club there are over 1,700 members, and many clubs have over 700 members. However, according to Tiger, only around 500 of the members in Shenzhen actually use their membership and play golf.

-In order to build a golf course, you need to work on the local level, talking to farmers and convincing them to give up their land, while also working to get a permit from the provincial government, which takes 2-3 years. To get some farmers to move off of their land, companies use SOEs (State-owned enterprises) to help them make payments or offer jobs in compensation. Lots of his time is given to talking to farmers and working with the local governments to get courses approved.

-Tiger says that the pace of golf course construction in China is around 100 new courses per year.

-He believes that there is too much concentration in southern China, in places such as Hainan and Guangdong province, where there are already too many golf courses. He is focusing on the northern part of China, where courses are rarer, and therefore it is easier to sell memberships.

-In Guangdong province and Shanghai, membership is composed approximately of 10% Korean, 5% Taiwanese and the rest Chinese, with a few members from other countries. Korean golfers fly to China to play because membership is cheaper here than in Korea.

-Another advantage to building courses in China is also being able to build homes on the course. According to Tiger, the value of a house increases 30% when it is put on a golf course.

-When I asked Tiger why he thought golf was so popular in China, he chalked it up to people wanting to get away from the polluted, congested cities. People want a break from the pace and conditions of city life, and golf is a way of doing that.