Chinese seafood distributor Kaiyang World Seafood Co. is backing video-sharing app Kuaishou as a key tool for selling seafood through the market-disrupting force of the coronavirus.
After many of the country’s brick-and-mortar stores shuttered during China’s COVID-19 lockdown in the spring, the focus of Chinese brands and retailers shifted quickly to e-commerce models.
Kaiyang, which also runs a Tmall store, turned to the Kuaishou video store as a means to sell through its variety of imported seafood products, including salmon steaks from Chile, sablefish, and squid from Africa and Latin America.
Kaiyang CEO Wei Yang has been conducting 10-hour sales live broadcast sales sessions on the app, which has emerged as a rival to Tiktok across Asia. Dalian-based Kaiyang sold CNY 10 million (USD 1.4 million, EUR 1.3 million) worth of domestic and imported seafood over a 12-day period in June on its Kuaishou platform, according to Wei.
Based off that success, Wei said he’s encouraging all of the company's 1,000 offline stores to launch their own live broadcasts on Kuaishou.
Kuaishou has been successful in China partly by recruiting big name brands, like appliance maker Gree and cosmetics brands like Esteé Lauder, and in turn promoting impressive sales results of those brands on the platform. It has also benefitting from a strategic partnership with JD.com, which like Kuaishou is backed by Tencent.
Video marketing has been a hit with Chinese smartphone users, who want to see a product’s functionality up close. Live-streamed cooking shows have proven especially successful for Chinese seafood sales, as viewers get to see how a particular fish is prepared.
In 2019, Kaiyang invested in the creation of a studio in Dalian for producing and broadcasting a live e-commerce channel. The company has also sought to expand sales of gift boxes featuring imported seafood. While its business model has traditionally been video-sharing, Kuaishou also allows vendors to live-stream, in turn allowing engagement with viewers, who can comment and ask questions in real-time.
Chinese seafood processors like Kaiyang have piled into the seafood import and distribution business in recent years. But China’s scale and a comparatively threadbare cold-chain logistics network require an investment in distribution networks and marketing that can result in a major drag on profitability.
Kaiyang, which also has a contract processing business, saw revenues rise 67 percent to CNY 320 million (USD 44.8 million, EUR 41.6 million) in 2019. But its profits, at CNY 6 million (USD 840,000 EUR 780,000) were down by 40 percent, according to results released to investors this week.
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