Sales of High end imported seafood including items such as lobster, king crab, salmon, Dungeness crabs and Argentinean shrimp appear to be surging in China prior to the Chinese New Year on January 28th.

For lobsters, unlike 2016 when New Year’s sales were barely over the prior year, all indications are that sales are up substantially, if the supply has materialized.

Chinese consumers have started their holiday shopping in preparation for the coming Chinese New Year. High-end seafood has surged as a popular choice with the improvement of household incomes. Such high-end seafood as king crabs and lobsters are becoming widely received among consumers.

It is about half a month before the Chinese New Year. But Chen has decided to skip her lunch break and select seafood in an aquatic market near her workplace for the coming festival. She used to buy few seafood items when choices were limited. However, now she can choose from a variety of seafood like scallops, abalones and imported Argentinean red shrimps. And the prices of high-end seafood are more affordable for common consumers now. So Chen has bought some to try during this break and will come back for more before the holiday.

Unlike Chen, Huang prefers to buy seafood online. For example, she has just found that one Chilean king crab is sold at 348 yuan in Tmall.com of Alibaba. And the crabs weigh between 3.6 to 4 jin (1 jin= 0.5 kilo) each. And Huang can save another 35 yuan with some promotion activity. Huang used to think that king crabs are too expensive for her to buy. But now she realizes that they are not that expensive. Apart from frozen seafood, Huang also buys such air-imported and live seafood as American lobsters, mussels from New Zealand and French oysters online.

Many companies have started their promotion activities on e-commerce platforms now. For example, many stores on Tmall.com of Alibaba are selling a kaleidoscope of seafood gift baskets. Inside them, there are abalones, crabs, American lobsters, etc. Consumers spend less buying gift baskets than purchasing the seafood separately. And consumers may get more discounts if they participate in some online activities.

However, there is actually slight increase in seafood prices with the greater demand around the festival. Chen is quite familiar with seafood prices. And according to him, one box of Argentine red shrimps is usually sold at 138 to 158 yuan. And consumers can save another ten to twenty yuan if there are promotion activities. But their prices are higher around the Chinese New Year than usual even with the so-called festival discounts. Apart from the holiday factor, the prices increase also because of the season, said some seafood sellers. There are fewer fishing boats which are working in winter, which in turn brings the contraction of seafood supply.

Zhangzidao expands sales channels to reach end consumers.

Aquatic companies have found new opportunities and worked hard to develop new sales channels with the increase of household incomes. Zhangzidao is one of these companies. In the December of 2016, Zhangzidao has inked cooperation agreement with Anhui Minwang to establish a joint venture. And this new company aims to promote Zhangzidao’s brand and products, expand the sales channels in supermarkets and stores as well as enable more products to directly reach end consumers.

Zhangzidao thinks that stores and supermarkets are important channels for end consumers to get access to its products. And the group has adopted the sales model of direct selling plus agency. Thanks to this model, its products are available in 101 stores of such brands as Sam’s Club, Metro group and Yonghui Superstores. And its retailers sell products in 175 different stores through nine brands. This not only contributes to the group’s steady growth but also its transformation.

In addition, Zhangzidao has built a temporary storage facility for American lobsters. The lobsters imported from Canada are kept there before being sold to consumers all over China. Around this holiday shopping season, there are also some promotion activities in Zhangzidao’s Tmall.com stores. Apart from its farmed sea cucumbers and scallops, the promoted products also include popular imported seafood like American lobsters, Dungeness crabs and salmon. As its annual report in 2015 shows, its online seafood sales has ranked first in the category of aquatic sales during the previous two Singles Days.

Its performance report reads that the group has earned the revenue of 843.5277 million yuan during the first three quarters of 2016. And its net profit is 25.1446 million yuan which balloons by 828.95% from the same period of the previous year. And its annual net profit is estimated to be about 45 million to 55 million yuan.

Apart from Zhangzidao, other aquatic companies also benefit from e-commerce platforms. Ocean Family’s online sales value is high, though it is lower than that of physical stores. And it has inked cooperation agreement with both Tmall and JD. And there are promotion activities of gift boxes in its store on JD platform now. In addition to online development, Ocean Family has also set up a new retailer store in Xiaoshan of Zhejiang last October.

The industry upgrades with the changes to consumption patterns

China’s middle class is expected to continue its expansion with the continual increase of household incomes. And the rising middle class have higher demand for their food. This brings greater demand for seafood products owing to their high nutrition.

The increase of seafood consumption can be seen from the changes to their supply. On average, it has grown at an annual rate of 3.2% from 2003 to 2014, while the growth rate is 4.2% from 2010 to 2014. There is an increase in the supply of both farmed and wild seafood. And the average growth rate is only 1.7% for wild seafood from 2003 to 2014, but it skyrockets to 3.1% from 2010 to 2014.

The country’s main imported seafood include Chilean king crabs, Norwegian salmon, Canadian northern prawns and cod. And the major exporters are Russia, America, Norway, Japan and Peru.

As to seafood, their wholesale prices have been on the rise since 2005. But the prices are stable for aquatic products which grow up in freshwater owing to sufficient supply. This shows consumers’ increasing preference to high-end seafood. This seafood used to be sold mainly through restaurants, while the proportion was low of household consumption.

But the situation has changed around 2012 to 2013 for the two reasons below. First, China’s anti-corruption campaign has taken a toll on the business of high-end restaurants. Second, the year of 2013 has witnessed the beginning of seafood e-commerce. High-quality and reasonably priced seafood, especially the imported ones, are available to ordinary consumers thanks to great efforts of e-commerce companies.