Gfresh charts course into brave new world of online live seafood sales
The internet has changed the way people buy and sell practically everything. Except seafood.
That is, until now.
Gfresh, an online business-to business seafood marketplace, launched in 2014, has found success where many before have failed as it connects sellers of live seafood directly to buyers, mostly in China.
“When we first thought about the venture, we wondered why is it was, as far as we could tell, that there was no online platform for buying and selling live seafood. It’s ridiculous you can move almost any other type of commodity between countries and it just arrives but you can’t do that with live seafood,” said Anthony Wan, Gfresh’s vice president for international operations, in an interview with Seafoodsource.com.
Gfresh’s route to success has been aided with a well-thought out business plan and the means to execute it through financial backing from Shanghai Regal Co. Gfresh founders identified four “pain points” where they focused their initial energy: developing the actual online marketplace, creating trustworthy method for accepting and fulfilling payments, minimizing mortality rates and mediating disputes, and mastering the logistical challenges of moving living creatures from one part of the world to another.
In building an online marketplace for seafood, Wan said Gfresh had to fly in the face of how seafood has traditionally been bought and sold for millennia.
“Traditionally, it has been done face-to-face. Getting sellers and buyers together and cultivating the relationships necessary is typically a long process requiring a lot of time and money, especially when it comes to international trade,” Wan said.
Gfresh’s solution, its website global.gfresh.com, is the first real online marketplace designed specifically for cross-border business-to-business seafood sales, Wan said. It has quickly caught on with buyers and sellers of lobster, Dungeness crab and abalone and Wan said the company is working on expanding its listings of other species.
Building a functional payment processor that both buyer and seller could depend on was another challenge for which Gfresh found an innovative solution by developing a proprietary escrow system called Gpay. Through it, the seller sees the payment has been made upfront, but the money isn’t delivered until the product arrives and meets agreed-upon standards for the sale’s completion.
”As with any new business relationship, trust is key. With seafood, the seller wants to see the payment upfront but the buyer wants to see the product first,” Wan said. “Gpay effectively eliminates the risk for both parties.”
When buyer and seller come together through Gfresh, they agree on an acceptable mortality threshold between 5 and 25 percent. To ensure fair play, Gfresh has on-the-ground inspectors who are present for the opening of the boxes of live seafood upon delivery. The entire process is documented by video and streamed in real-time to the buyer and seller.
“We don’t stand on either side – we’re a completely independent, third party to the transaction,” Wan said.
In order to maintain credibility, the inspectors are well-trained experts in the species they inspect, Wan said.
“They know products very well. They know if [a live product] is not moving, it’s not necessarily dead – they’ll press its underbelly and it starts moving again,” Wan said. “We work a lot with sellers to understand their products better to constantly improve our inspections. Without that process, we know can’t have that basic trust required to be successful.”
The last complexity Gfresh has had to overcome is the difficulty of moving live seafood long distances while keeping it alive. To overcome that challenge, Gfresh has limited its operations to Beijing, Shanghai and Guangzhou, where it has set up tracking systems that guarantee product delivery within seven hours of its arrival. If the delivery doesn’t arrive on time, Gfresh pays a penalty.
“The penalty keeps us honest and efficient,” Wan said. “As soon as the cargo lands, we’re there to receive it. This is an area where our connection with Shanghai Regal, the largest customs broker in Shanghai, comes in handy, as this is their bread-and-butter.”
It’s complex and efficient system allows Gfresh to allow businesses in the cities it operates to buy as little as a single box of product at wholesale prices, Wan said.
“Whereas importers used to have to order 30 to 50 boxes as a minimum order, our platform consolidates orders, so that we can have 30 different restaurants buying one box each and the seller just has to complete one single documentation process,” he said.
Another benefit of Gfresh’s association with Shanghai Regal is its ability to concentrate on creating the marketplace rather than immediately needing to turn a profit, Wan said.
“Our goal is to be the dominant marketplace for live seafood globally. If we really wanted to monetize right now, we could do it with a whole range of different things. But right now, we don’t really care about revenue streams. We want to build out our infrastructure and increase our total number of users – it’s all about growth for us,” Wan said.
Starting with just a handful of employees a little over a year ago, Gfresh now employs more than 150 people. It plans to continue to grow, focusing on increasing the number of sales it has originate from North America. Wan said the company has plans to expand its import operations to 20 Chinese cities in the near future.
“We’re moving extremely quickly with Gfresh. We wanted to build it so we can scale it, and now we’re at that stage,” he said. “We think the value of what we’re doing is immense. We think our platform provides a real bridge into how seafood sales will be done in the future.”