Expert offers tips for marketing seafood in China

Published on
December 14, 2016

Stephen O’Sullivan owns and runs MyOceanFresh.com, a seafood marketing and consulting business based in Shanghai helping international seafood clients develop safe and transparent channels to market for long-term growth in the greater Asia Pacific region. Stephen has 19 years export market development experience and has worked with organizations in the design and facilitation of business strategy, sales and marketing strategy, as well as channel development and client engagement.

SeafoodSource: Online retailers in China are saying it’s easier than ever for medium-sized seafood exporters to sell into China. Is that true?

O’Sullivan: Selling anything into China, whether you’re a SME or a multinational, is anything but easy. There is nothing easy about doing business in China. I’m sure the team at Alibaba make it easy for you to set up the account, but then what? How do you get noticed? How do you manage your business in China? [Who will] help you to better understand how to communicate your product USPs (unique selling points) and brand proposition locally in China and how to position it? [How will] you manage your customers? How can you be sure you’re maximizing your price?

[There’s] not a silver bullet to breaking the China market or to doing business in China. When you sell commodity food items, it’s all about maximizing your price and discovering where the market is. Of course, it’s different when you sell a branded retail or value-added foodservice product, but how are you going to communicate your brand proposition, USPs and manage your brand story here in China? You need to consider a more comprehensive approach and informed planning. You need to figure out how you are going to develop this approach or plan without market insights and real-time market intelligence. 

SeafoodSource: What benefit does a business gain from having someone on the ground in China?

O’Sullivan: Price discovery, market insights, maximizing your price, dealing with problem deliveries and quality queries. Not to mention spotting new market opportunities. These are all reasons why you want someone on the ground in China and are all key factors in determining how well you do, not just in China, but quite frankly in any market. How do you know where the “market” is? How are you managing your customers? If you’re not in the market talking to buyers and finding out why no one is biting on your great product offers, then you’re probably thinking the market has moved to a substitute species or inventories are too high or the market has moved on. The point is, you won’t really know! Having a 24/7 line into the market gives you that transparency, visibility and understanding of what exactly is going on in the market.

If you’re selling oil, gold or diamonds as commodities probably you can do it from your desk or sun-lounger anywhere in the world, but if you’re selling commodities that can be easily accessed or substituted with other species more easily and in some cases controlled at source – for example, by large state-owned fisheries that have access to surprisingly endless supplies ,with no duty or VAT on the price – then there is a little more work required to carving out and growing your market share. Sure, some producers will say, “My crab or tuna is the best and cannot be replaced or substituted – and let’s not get into ‘controlled’ here!” But I would argue there is a reason the catchphrase is “there is plenty fish in the sea” and not “plenty of diamonds in the ground!”

SeafoodSource: What's the key marketing message for seafood sales in China? Is it still food safety?

O’Sullivan: I would say the key marketing message is “integrity.” When marketing and selling imported goods into China, in this case seafood, the key message given in restaurants and retail outlets at a customer level is that you’re selling imported goods with provenance – in other words with legitimate and traceable paperwork. In China “imported” implies “goods with integrity.” Chinese consumers feel they can trust foreign goods, but what’s implied in the word “foreign” or “imported” is “integrity.” That may be controversial, but it's a sad truth. Foreign manufacturers and suppliers have integrity in production of food and therefor the quality is a given and it’s always worth paying more for imported goods if you are sure of the goods’ provenance. More often than not now, Chinese buyers are looking for the white import label stuck to the back of a product more so than looking at the actual packaging.

Sad to say, but there is still a lack of integrity in the supply chains of China – and Asia in general – and it’s not confined to just the seafood sector. We have in recent times in Europe learned that greater food safety and guaranteeing certain quality standards in food production is better for everyone, both producers and consumers alike. We build in the necessary levers and switches to deal with quality or breaches of the supply chain. It starts with the people who grow and farm our food and work the land and waters and these controls and levers are replicated throughout a tightly monitored supply chain. We respect the people who produce our food in Europe. They feed us and commit themselves and in many cases their families to working the land and waters sometimes for generations.  It's an honest profession, and in many instances back-breaking profession, and one that should garner respect. 

The same cannot be said for food production and farming in the developing world, where those that work the land are looked down upon and are not given good social standing for the important job they do for their communities as it’s perceived as lowly and unskilled. Where there is lack of basic respect for how and where food is produced, in my opinion, it leaves the industry as whole open to people who have no respect for any part of the supply chain or those that lack integrity. For these people they care little about what they sell. It’s just a way of making money, a simple in-and-out trading opportunity. In Asia you could be trading radiators or phone covers one month, the next month jump on an opportunity to source a load of crab. Such opportunistic traders are not entertained in the Western food industry.  

The irony is that in a [Chinese] culture where food and eating is such an integral part of the culture and eateries resemble palaces or places of worship, it is now integrity of ingredients that is convincing Chinese customers to pay a premium. They value this now more than the expensive interior design [of the restaurant].  Yet curiously, they find it hard to make it part of the DNA of food production in their own land. If you can show a product’s provenance, you will always have a buyer and will always get a premium. Integrity is the key marketing message in food today, everywhere not just China.

SeafoodSource: Has the luxury aspect of imported seafood become less of a marketing tool with the corruption crackdown?

O’Sullivan: Well there are certain foods where demand and, subsequently, prices have dropped due to less extravagant entertainment, such as imported live abalone. But there is still demand for premium or luxury seafood for the domestic market and genuine legitimate entertainment. Sales of toothfish and king crab are testament to this. Both prices and shipped volumes are still on the up.

You are seeing imported seafood culture now spreading to western China [hitherto more remote and less prosperous than east coast] and that will only serve to further push demand and surely prices higher. Buying seafood is a way to entertain and also as seasonal or holiday treat. It’s engrained in their culinary culture.

SeafoodSource: Does a certain country of origin command a price premium in China? In other words, are consumers willing to pay more for American or Icelandic seafood, for example?

O’Sullivan: You need to invest on a well-planned and consistent basis to communicate all the way through the channel on tying a specific country to a specific product or be first mover to make the country of origin command more money. New Zealand green mussels, New Zealand scampi, French oysters, Norwegian salmon and Ecuadorian shrimp are all good examples and ones that have taken time and investment from the various companies and their respective state bodies to build.

Ireland, we know, has great mussels, scampi, oysters and salmon but sadly we were neither first mover nor spending the money year-on-year with all the major buyers and distributors to cement this image. Too late for the former but not so for the latter!   

SeafoodSource: You mean spending money on marketing to Chinese buyers?

O’Sullivan: Yes, but more than money. I’m talking shoe leather and pressing of the flesh and emptying of the glass. It’s all marketing but its trade marketing...building relationships. I’m talking about tasting dinners, seminars, showcasing at key industry trade shows, working in the channel [to target] key retailers, HORECA [hotel, restaurant, café] accounts for tastings and education with customer-facing staff. It’s not about sitting behind-a-desk marketing and signing off on billboards and one-page ads in in-flight magazines!  [It is about doing it] consistently over a sustained period of time ins specifically targeted areas and submarkets.

 

Q&A with Stephen O’Sullivan of MyOceanFresh.com
 

Stephen O’Sullivan owns and runs www.myoceanfresh.com, a seafood marketing and consulting business based in Shanghai helping international seafood clients develop safe and transparent channels to market for long-term growth in the greater Asia Pacific region. Stephen has 19 years export market development experience and has worked with organizations in the design and facilitation of business strategy, sales and marketing strategy, as well as channel development and client engagement.

 

SeafoodSource: Online retailers in China are saying it’s easier than ever for medium-sized seafood exporters to sell into China. Is that true?

O’Sullivan: Selling anything into China, whether you’re a SME or a multinational, is anything but easy. There is nothing easy about doing business in China. I’m sure the team at Alibaba make it easy for you to set up the account, but then what? How do you get noticed? How do you manage your business in China? [Who will] help you to better understand how to communicate your product USPs (unique selling points) and brand proposition locally in China and how to position it? [How will] you manage your customers? How can you be sure you’re maximizing your price?

[There’s] not a silver bullet to breaking the China market or to doing business in China. When you sell commodity food items, it’s all about maximizing your price and discovering where the market is. Of course, it’s different when you sell a branded retail or value-added foodservice product, but how are you going to communicate your brand proposition, USPs and manage your brand story here in China? You need to consider a more comprehensive approach and informed planning. You need to figure out how you are going to develop this approach or plan without market insights and real-time market intelligence. 

 

SeafoodSource: What benefit does a business gain from having someone on the ground in China?

 

O’Sullivan: Price discovery, market insights, maximizing your price, dealing with problem deliveries and quality queries. Not to mention spotting new market opportunities. These are all reasons why you want someone on the ground in China and are all key factors in determining how well you do, not just in China, but quite frankly in any market. How do you know where the “market” is? How are you managing your customers? If you’re not in the market talking to buyers and finding out why no one is biting on your great product offers, then you’re probably thinking the market has moved to a substitute species or inventories are too high or the market has moved on. The point is, you won’t really know! Having a 24/7 line into the market gives you that transparency, visibility and understanding of what exactly is going on in the market.

 

If you’re selling oil, gold or diamonds as commodities probably you can do it from your desk or sun-lounger anywhere in the world, but if you’re selling commodities that can be easily accessed or substituted with other species more easily and in some cases controlled at source – for example, by large state-owned fisheries that have access to surprisingly endless supplies ,with no duty or VAT on the price – then there is a little more work required to carving out and growing your market share. Sure, some producers will say, “My crab or tuna is the best and cannot be replaced or substituted – and let’s not get into ‘controlled’ here!” But I would argue there is a reason the catchphrase is “there is plenty fish in the sea” and not “plenty of diamonds in the ground!”

 

SeafoodSource: What's the key marketing message for seafood sales in China? Is it still food safety?

 

O’Sullivan: I would say the key marketing message is “integrity.” When marketing and selling imported goods into China, in this case seafood, the key message given in restaurants and retail outlets at a customer level is that you’re selling imported goods with provenance – in other words with legitimate and traceable paperwork. In China “imported” implies “goods with integrity.” Chinese consumers feel they can trust foreign goods, but what’s implied in the word “foreign” or “imported” is “integrity.” That may be controversial, but it's a sad truth. Foreign manufacturers and suppliers have integrity in production of food and therefor the quality is a given and it’s always worth paying more for imported goods if you are sure of the goods’ provenance. More often than not now, Chinese buyers are looking for the white import label stuck to the back of a product more so than looking at the actual packaging.

 

Sad to say, but there is still a lack of integrity in the supply chains of China – and Asia in general – and it’s not confined to just the seafood sector. We have in recent times in Europe learned that greater food safety and guaranteeing certain quality standards in food production is better for everyone, both producers and consumers alike. We build in the necessary levers and switches to deal with quality or breaches of the supply chain. It starts with the people who grow and farm our food and work the land and waters and these controls and levers are replicated throughout a tightly monitored supply chain. We respect the people who produce our food in Europe. They feed us and commit themselves and in many cases their families to working the land and waters sometimes for generations.  It's an honest profession, and in many instances back-breaking profession, and one that should garner respect.

The same cannot be said for food production and farming in the developing world, where those that work the land are looked down upon and are not given good social standing for the important job they do for their communities as it’s perceived as lowly and unskilled. Where there is lack of basic respect for how and where food is produced, in my opinion, it leaves the industry as whole open to people who have no respect for any part of the supply chain or those that lack integrity. For these people they care little about what they sell. It’s just a way of making money, a simple in-and-out trading opportunity. In Asia you could be trading radiators or phone covers one month, the next month jump on an opportunity to source a load of crab. Such opportunistic traders are not entertained in the Western food industry.  

The irony is that in a [Chinese] culture where food and eating is such an integral part of the culture and eateries resemble palaces or places of worship, it is now integrity of ingredients that is convincing Chinese customers to pay a premium. They value this now more than the expensive interior design [of the restaurant].  Yet curiously, they find it hard to make it part of the DNA of food production in their own land. If you can show a product’s provenance, you will always have a buyer and will always get a premium. Integrity is the key marketing message in food today, everywhere not just China.

   

SeafoodSource: Has the luxury aspect of imported seafood become less of a marketing tool with the corruption crackdown?

O’Sullivan: Well there are certain foods where demand and, subsequently, prices have dropped due to less extravagant entertainment, such as imported live abalone. But there is still demand for premium or luxury seafood for the domestic market and genuine legitimate entertainment. Sales of toothfish and king crab are testament to this. Both prices and shipped volumes are still on the up.

You are seeing imported seafood culture now spreading to western China [hitherto more remote and less prosperous than east coast] and that will only serve to further push demand and surely prices higher. Buying seafood is a way to entertain and also as seasonal or holiday treat. It’s engrained in their culinary culture.

SeafoodSource: Does a certain country of origin command a price premium in China? In other words, are consumers willing to pay more for American or Icelandic seafood, for example?

O’Sullivan: You need to invest on a well-planned and consistent basis to communicate all the way through the channel on tying a specific country to a specific product or be first mover to make the country of origin command more money. New Zealand green mussels, New Zealand scampi, French oysters, Norwegian salmon and Ecuadorian shrimp are all good examples and ones that have taken time and investment from the various companies and their respective state bodies to build.

 

Ireland, we know, has great mussels, scampi, oysters and salmon but sadly we were neither first mover nor spending the money year-on-year with all the major buyers and distributors to cement this image. Too late for the former but not so for the latter!   

SeafoodSource: You mean spending money on marketing to Chinese buyers?

O’Sullivan: Yes, but more than money. I’m talking shoe leather and pressing of the flesh and emptying of the glass. It’s all marketing but its trade marketing...building relationships. I’m talking about tasting dinners, seminars, showcasing at key industry trade shows, working in the channel [to target] key retailers, HORECA [hotel, restaurant, café] accounts for tastings and education with customer-facing staff. It’s not about sitting behind-a-desk marketing and signing off on billboards and one-page ads in in-flight magazines!  [It is about doing it] consistently over a sustained period of time ins specifically targeted areas and submarkets.

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