Like many industries in China, the sector has suffered from over-capacity and cut-throat competition amid rising labor costs. Some of the smarter firms have adjusted to trends and spawned subsidiaries in seafood logistics, retail, and catering. Meanwhile, cash-rich corporates from other sectors of the economy have also entered the fray, seeking higher margins which seafood trading is seen to offer. Here’s a look at some of the firms set to make moves in 2018.
Li Yang: A shrimp seedlings and antibiotics firm looking for global partners
Li Yang Aquatic, a Chinese firm involved in the shrimp seedlings and antibiotics sectors, reported strong growth in sales in 2017, but the firm has loaded up on debt to grow its production and distribution capacity.
For that reason, the company is eager to new partners and investors. Listed on China’s stock exchange for small- and medium-sized firms, Li Yang Aquatic, which also produces shrimp feed, reported revenues of CNY 154 million (USD , EUR ) for the first half of the year – up 54.9 percent. But its profit, at CNY 14.2 million (USD , EUR ), was up only 3.2 percent year-on-year. In addition, the company’s debt shot up by 46.1 percent year on year to CNY 63.9 million (USD , EUR ), suggesting the company may struggle to carry its debt load. But the ambitious company has nearly 200 stores and 1,500 staff covering the key southern Chinese shrimp production region. The company also has accolades and serious industry connections, as chairman Ma Jia Hao was named “a top 10 hero” of the seafood sector in a recent awards ceremony for the industry in southern China.
Hong Ding Hai Xiao Lao: Seafood restaurant chain for China’s new generation
Hong Ding Hai Xiao Lao is a chain of seafood hotpot restaurants operated and owned by Shanghai-based firm Hong Ding Dou Lao Food and Beverage Co., listed on the country’s stock board for SME-sized firms. In fact, it’s the only listed Chinese company with a pure focus on seafood restaurants.
Filings by the firm reveal its intent to expand its footprint of restaurants nationwide by expanding its seafood sourcing for hotpots, a favorite Chinese dining format. With restaurants in key corporate and commercial locations in Shanghai, Hong Ding counts Zhangzidao (also known as Zoneco) as a supplier and also buys from suppliers in Australia and Norway. Savvy about marketing and trends, Hong Ding also emphasises its health options, with “low-oil, low-salt and sugar-free” dishes on offer to its middle-class clientele.
Guangdong Yue Hai Group: An aquafeed upstart
This autumn, Guangdong Yue Hai Group, a player in China’s aquafeed sector, broke ground on a new feed production facility in Weihai, on China’s east coast, to service the Shandong and northern Chinese fish and shrimp feed market. In addition, construction is already underway on a large new Yue Hai feed processing plant in Jiangsu to service the growing crayfish industry in inland Chinese regions like Anhui and Hunan. Located in Jiangsu Province, the plant will also tap into “vigorous” demand for shrimp feed in east coast regions, according to company chairman Liang Ai Jun.
The firm, which locked in a battle in the aquafeed sector with rivals Guangdong Haid Group and Tongwei Group, hasn’t yet detailed projected output figures for 2018, but the company’s strategic plan plan sees it doubling output from to four million metric tons annually after its new facilities come online.
Joyvio: Has deep pockets, seeking seafood margins
Joyvio is proof of the enormous interest in the seafood industry among corporations with no background in the sector, who are attracted to the high margins earned by importing crustaceans and fish.
Among the busiest buyers at this year’s China Seafood Expo in Qingdao is a unit owned by one of China’s biggest tech firms, Joyvio, an agribusiness and foods-focused subsidiary of the giant Legend Holdings, which also owns the Lenovo computer group. Joyvio recently launched its own brand of imported, packaged seafood.
Joyvio recently celebrated the splashy launch of its “Tian Ran Zhu Yi” (literally, “Natural Belief”) line, which includes salmon, cod, and shrimp sourced from around the world. The launch, which follows Joyvio’s acquisition of seafood importer, processor, and distributor Guo Xing Hai. Joyvio CEO Tang Jie has told journalists the firm will be concentrating on launching “high-end” seafood brands.
He Ma Xian Sheng: China’s answer to Whole Foods
Few Chinese retailers are as PR-savvy as He Ma Xian Sheng, a fresh food chain with outlets across major Chinese cities, which also serve as fulfilment and dispatch centers for online sales. That much was clear when He Ma chartered private jets to fly 10,000 crabs from Alaska in time for this year’s October crab festival, with photographers on-hand to snap shots of the crabs being sorted and graded on arrival at Shanghai’s Pudong Airport before being delivered by company executives to city markets.
He Ma Xian investors including e-commerce giant Alibaba. Outlets of the chain look like a Chinese version of Whole Foods, purchased by Amazon earlier this year. However purchasing requires membership – open to the public – and payment is made using Alipay, the electronic payment system developed by Alibaba.
Jumbo: A model for international seafood restaurant expansion in China
Few foreign firms have been as quick to target the higher-value end of China’s seafood restaurant sector as quickly as the Jumbo Group.
The Singaporean seafood restaurant operator, which has focused on opening locations accessible to wealthy city diners chain, already operates three locations in Shanghai and one in Beijing, and is set to open two more outlets in China in the coming months. Jumbo’s menu focuses on traditional recipes but uses imported ingredients like Alaska crabs.
Jumbo (also known as Zhen Bao Seafood) targets wealthy Shanghai diners from office locations, but has signaled it wants to expand into five-star hotels across China.
San Quan: Frozen foods giant with a growing taste for seafood
As China urbanizes, its population’s food taste have shifted towards convenience and frozen food. And few companies are as prepared to capitalize on that trend as much as San Quan, a giant in China’s frozen foods sector.
Based in Zhengzhou, the capital of Zhengzhou and the logistics hub of central China, as well as the country’s most populous province, San Quan is a major player in China’s frozen foods sector.
It recently launched and is now heavily promoting a range of foods for children featuring imported cod, as well as salmon and imported and domestic shrimp. The products are being sold as traditional frozen dumplings, long a staple of the frozen and convenience food sector in China. But they have, to date, been a largely low-cost product, and San Quan apparently sees an opportunity in bringing more quality to the product. San Quan’s new range – in 300-gram boxes priced at CNY 23.20 (USD , EUR ), is being sold at Beijing supermarket chain Jingkelong. It’s targeted at a higher price-point and marketed as a boon for children’s health, aiding in the development of children’s brain power and healthy bodies.
Spring Foods: From processing to branding
With an inevitable consolidation of China’s seafood processing sector looming, one firm well-positioned to survive is Spring Foods.
A leading processor, the firm is seeking to innovate and expand downstream. It recently opened opened “Xiao Ai Chu Fang” (also trading as Amy’s Choice), a striking new concept store and restaurant in Qingdao that allows customers to watch cod processors and kitchen staff at work while eating.
Spring Foods already operates the Ai Chi Yu brand of packaged seafood aimed at Chinese convenience-oriented consumers and has in recent years sought to distribute high-margin imports to domestic Chinese consumers.
Rizhao Wanzefeng Fishing Co: A Chinese salmon pioneer
One of the more ambitious new entrants to the salmon farming sector in China is Rizhao Wanzefeng Fishing Co. Located in a region better known for producing shrimp and scallops, the company has great potential due to China’s growing taste for salmon.
Rizhao Wanzefeng Fishing Co. has teamed with Wuchuan Heavy Industry, a maker of maritime platforms and vessels, in a bid to ultimately produce 20,000 tons of salmon per year in the waters off China’s eastern coast. Founded in 2013 by a larger industrial company, the firm has already spent CNY 24 million (USD 3.6 million, EUR ) buying fry, which have been released into pens in a cold water zone off Rizhao coastline in the Yellow Sea, the stretch of water connecting China and the two Koreas.
The firm is planning to sell salmon in 2017 but hasn’t detailed its distribution plans. Most of China’s salmon-farming projects to date have concentrated on raising a few thousand metric tons of the fish in tanks on land. Having studied salmon offshore salmon farms in Norway, Wanzefeng seeks to up domestic production of salmon considerably in China.
Xian Sheng Huo: The new face of Chinese retail
Xian Sheng Huo, also known as Xian Life or Fresh Lifestyle, is a distributor of fresh food and seafood. It entered a partnership with a leading real estate developer and a Shanghai-based e-retailer this year to acquire a convenience chain-store in what is a very modern tie-up that could be a potent distribution option for China’s seafood market.
Hao Linju (literally translating to “Good Neighbor”) is the chain bought by a consortium of Xian Shenghuo (Xianlife.com) and a Shanghai-based online retailer of foodstuffs and seafood called ExFresh.com.cn, held by Shanghai An Xian Da Gong Ying Lian Management Co.
The new venture will be managed under China CVS, a holding company set up by Xian Shenghuo and ExFresh alongside Greentown Service Group Co., a subsidiary of one of the biggest names in Chinese real estate development, Greentown Holdings Group. Their idea is to open Hao Linju outlets nationwide in commercial properties being built by Greentown, with Xian Sheng Huo providing the logistics and Exfresh.com.cn goods being delivered offline through Hao Linju stores.
