SEAFOODNEWS.COM by Amy Zhong and John Sackton, based on material from CAPMA – April 7, 2016

The rapid growth of imported seafood in China, and its great popularity, is causing some of the primary frozen fish processors in Qingdao to re-invent themselves as domestic seafood processors.

One such company is China Starfish, a frozen fish processor that has been around since 2000. Earlier this year, the company listed itself on China’s ‘third board’ or the NEEQ exchange, which is sometimes called the Chinese Nasdaq. This is a share market with specific rules about company disclosure and transparency, and it is open of course to foreign capital.

According to an article by CAPMA the rapid development of China’s seafood consumption has pushed the nation’s aquatic industry to innovate.

A great variety of seafood is now sold in China’s supermarkets. And local consumers can also get access to an increasingly large number of imported seafood like Argentina red shrimps, Canadian lobsters and Greenland turbot.

It is learnt that the global demand has reached as high as 600 billion yuan for seafood during 2015. And there is great potential for China’s increase of aquatic product consumption with the rise of household incomes, improvement of commodities, changes to consumption concept as well as development of the nation’s sales channels and networks.

One indicator of the strength of this demand is that China Starfish has been listed on the New Three Board of China on January 29th.

China Starfish specializes in the sales of imported seafood and it has built franchise stores in different areas like Beijing, Shenzhen, Chongqing, Shandong, Liaoning, Hebei, Henan, Guangdong and Guangxi.

It sells seafood directly to consumers both through its physical stores and online. The company has spent great efforts in building its cold chain logistics and ensuring high quality of those products sold through the Internet, which makes it convenient for buyers to get their seafood. And this has also proved the great potential for the development in e-commerce business of frozen seafood.

China has become one of the largest seafood consumption markets in the world. The gradual increase of consumption has diversified consumers’ demand for seafood and they have more options in their seafood purchases. There is a gradual increase in China’s demand for such high-end seafood as northern prawns, salmon, codfish, king crabs, Argentina red shrimps and Greenland turbot.

During the past few years, this increase in domestic demand has begun to change traditional Chinese frozen fish processing for export. For example there is drastic increase in the overall capacity of this industry.

Secondly, the techniques are improving and the industry’s attention has shifted from primitive processing to the intensive higher value processing, including packing for retail sales.

In addition, the industry has become increasingly aware of the significance of quality and sanitation in the processing procedures and in its product handling and storage. As a result, there is a rationalization of production focused on a dramatic increase in products’ added value.

Another feature is the growth of clusters. Processing plants tend to cluster together and some industrial zones begin to appear, most of which are in coastal areas. This in turn helps improve the industry supply chain and companies benefit from the cluster effect.

Third, with the more and more fierce competition, a increasing number of large companies turn to a branding strategy so as to build their reputation on the global stage.

Currently the Chinese aquatic industry is still in the process of changing its consumers’ consumption habits, improving cold chain logistics and anticipating great market changes.

As more and more consumers are getting used to buying processed aquatic products from virtual and physical stores companies like Starfish provide their products to consumers through various channels like online shopping platforms, mobile apps as well as a great number of supermarkets, most of which are located in the north, east and northeast areas of China at the current stage.

E-commerce has exerted great influence on the traditional sales channels, but now some consumers are still skeptical of those online seafood products, especially the frozen ones. This is because China’s present cold chain logistics has not been able to meet the requirements of consumers regarding product qualities. However, it is expected that those processed aquatic products are going to become increasingly popular with China’s economic development and the improvement of consumers’ living standards.

This transformation is changing the face of Chinese Seafood Processing from being the manufacturing center of world fish processing with little concern about the final product, to being strongly focused on customer perceptions where increased quality and value is paramount.