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Business / Industries

Seafood traditional traders send out mixed signals

By Luo Weiteng In Hong Kong (China Daily) Updated: 2015-09-28 09:56

Even so, his company and the rest of the industry face issues that cannot be ignored. The government's anti-corruption drive has hit the luxury consumer market, including sales of upmarket seafood produce.

"We suffered a 20 percent drop (in business so far this year compared with last year)," Dopico said. "But for foreign seafood exporters like us, this was a piece of good news.

"We can move back from a 'corrupted market' to a realistic market and get a better idea of real prices instead of artificially high ones."

Other companies have also felt the pinch.

Zoneco Group, a Chinese wholesale company based in Dalian, and specializing in scallops, sea cucumbers and abalone, has reported a 30 percent drop in business this year compared to 2014.

Domestic sales account for 70 percent of the firm's revenue.

"Not only are domestic sales shrinking, but prices are going down," Jackie Yin Youchun, managing director at Zoneco, said at the Expo in Hong Kong.

"We are forced to shift our focus to the middle-end market as well as roll out some cheaper products for the mass market."

To add to the company's problems, the overseas market in scallops is stagnating, especially in the US and Europe, while export payments can take up to two months.

Rising labor costs in the seafood processing industry are another negative factor, making banks more wary about increasing credit lines, and forcing small companies out of business.

"As a large market player, we are still struggling and striving in the belief that we will get through the bad times so that we can vie for a place in the market when the good times return," Yin said.

In a move to boost revenue and sales, Yin said he is turning to the country's booming e-commerce marketplace after launching an online store on Alibaba Group Holding Ltd's Tmall platform.

But foreign seafood exporters, such as Cooke Aquaculture and D&D Seafood, are playing a waiting game before joining the e-commerce rush in the country.

"We are obviously willing to ride on the e-commerce wave to beef up our presence in China, as long as some platforms can prove to be sophisticated partners," Robin Dopico said.

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