A strategic partnership with Marine Harvest will help Alibaba, China’s largest online commerce firm, lock in supply at a time of sharp increases in price for salmon in China.
A memorandum of understanding signed 18 October between the Norway-based salmon farming firm and Alibaba will see product from Marine Harvest’s new processing plant in Shanghai distributed through Win-Chain, a unit of e-commerce giant Alibaba.
“The demand for fresh seafood in China is rapidly growing, and Marine Harvest is one of the most trusted and world’s leading producers,” Alibaba President Michael Evans said. “By partnering with Marine Harvest and leveraging the consumer reach, technology capabilities and logistics support of the Alibaba ecosystem, we will be able to deliver the best-in-class offering of fresh seafood products to consumers across China.”
This comes as Norway’s salmon exports to China rose a massive 682 percent in the first seven months of this year according to data from Norway’s embassy in Beijing. Meanwhile, September saw a 66.2 percent year-on-year jump in prices for salmon at Shanghai’s Jiang Yang market – by far the largest increase of any seafood species at the city’s biggest seafood market.
With prices rising, Chinese buyers have been keen to lock in supply. A spate of business meetings this week in China, fronted by Norway’s royal couple, saw leading Norwegian suppliers, including Lerøy and Marine Harvest, join buyers like Shunfeng and Hema Xiansheng (an Alibaba-backed supermarket chain) to discuss further cooperation.
“We look forward to the many opportunities ahead to deepen our collaboration with Alibaba as we now ramp up our presence in China, for example through our new processing factory in Shanghai,” Marine Harvest Chairman Ole-Eirik Lerøy said in a press release issued following the signing event. “We see that Chinese consumers love salmon, and together with Alibaba and Win-Chain we will bring even more fresh salmon to dinner tables in China.”
This comes as a free trade agreement between China and Norway looks closer to completion, with the Chinese side more eager to pursue such deals since the onset of the Sino-U.S. trade war. Oslo and Beijing have moved into their twelfth round of talks and aim to complete the terms of the agreement early in the new year. Such a deal would ultimately give Norway zero-tariff access to the Chinese market and put it on a level playing field with Chile, which already has a free trade agreement with China.
China’s average annual per-capita consumption of salmon, at 0.1 kilograms per year, remains low compared to an American average of 1.2 kilograms and an average of 3.5 kilograms in France.
Increasing demand for seafood, alongside sharper enforcement of local environmental and fishing regulations, is driving a large increase in the pricing and value of seafood sold in China. The average price at CNY 49.60 (USD 7.16, EUR 6.22), rose 28.1 percent year-on-year in September at the Jiang Yang market.
Freshwater seafood fell by 9.1 percent in volume to 6,069 metric tons, while rising 5.15 percent in value to CNY 204 million (USD 29.4 million, EUR 25.6 million). Seawater products rose 10.2 percent in volume to 6,467 MT, while rising 43.2 percent in value to CNY 417 million (USD 60.2 million , EUR 52.3 million).
Photo courtesy of Alibaba
