Chinese seafood-processing firm Dalian Rich Enterprise Group has cited tariffs as the reason for further moving away from its reliance on the U.S. market, but, simultaneously, wants to maintain relationships with the American customer base and the U.S. brand the firm has built up over several decades.
“We hope we can continue selling our products to the U.S. market because we have established very good business relationships with our clients there. We trust each other, and we have supported each other over the past 30 years. If we stop selling [into the U.S.], it will hurt our valued and respected clients' businesses,” Sara Shi, head of overseas sales at Dalian Rich, told SeafoodSource.
Besides its customer base, Dalian Rich has also built up a lucrative brand targeting the U.S. Asian grocery and dining market.
“We do our own brand, Hi Chef, for Asian seafood dumplings and wontons, which is very popular in the U.S. It helped us to build a better reputation there,” Shi said.
However, Dalian Rich said it must protect itself from overreliance on the U.S. as the unpredictability in global trade rages on.
“We prepared for this for many years. The tariffs will kind of hurt us but can’t kill us. We diversified our market share in recent years,” Shi said. “The U.S. is a good market, but we have been trying to weaken the ratio of our exports to the U.S. over the past five years.”
Several companies across the Chinese seafood sector are in the same boat as Dalian Rich. For instance, Chinese tilapia producers and processors are pursuing several avenues in order to diversify their sales away from the U.S., similarly trying to guard themselves against trade uncertainty.
“We have no choice; we have to go out and find markets to survive,” Josef Zheng, head of sales at Xiamen Heron Seafood told SeafoodSource in May.
Though Dalian will explore several market options, Shi said Dalian Rich sees a lot of potential targeting the domestic market.
“The Chinese market is just starting for seafood consumption. It is an increasing market and the market with the most potential in the world. We have placed distribution channels for salmon, pollock, and shrimp products for more than 15 years, and we have offices in Beijing, Shanghai, Chengdu, Wuhan, and Xi'an, among others,” she said.
The Chinese government has instituted initiatives to help companies hurt by tariff volatility, like Dalian Rich, sell more domestically.
Online retailer JD.com has heeded government calls to promote domestic sales by sending its employees to Chinese companies involved in foreign trade, directly purchasing their products, and setting up a special area on its e-commerce platform to sell these products and direct traffic and marketing support accordingly.
Additionally, China is currently negotiating with the Gulf Cooperation Council and the Association of Southeast Asian Nations on establishing a three-way free trade agreement (FTA) in another move that may help companies seeking to diversify their markets away from the U.S.
Chinese Premier Li Qiang called the FTA negotiations “a groundbreaking initiative” in cross-regional cooperation amid “a volatile international landscape and sluggish global growth.”
