Continued demand for high-grade seafood in China alongside a clampdown on import “grey channels” (access points that are neither legal not clearly illegal) demand that exporting countries get behind national brands, said one marketing expert in Shanghai.
An ongoing crackdown on grey channels by Chinese authorities may mean bonding together is the best way to tackle the China market. Grey channels (often coming through Hong Kong) proliferated as demand for foreign food products — seen as safer and a premium gift option among the growing middle class — has soared in China. This has encouraged importers to use grey channels to avoid China’s high import tariffs, difficult regulatory hurdles, and inefficient distribution networks.
Norway and New Zealand are examples of suppliers coming together under one flag to increase market share, according to Scott Brown, head of Redfern Associates, which has advised the New Zealand government trade authorities on the Chinese seafood market.
Countries need to promote national brand image as well as sales as China will continue to crack down on all so-called “grey-channel” goods “primarily because it wants to collect taxes on those goods,” said Brown. Beijing is also seeking to meet global food traceability requirements.
A recent research report produced by Redfern that examines the collective marketing efforts of Canada, New Zealand and Norway in China suggests promotion of a national brand in the country is key to protecting profit margins and sales. However, the methods do differ.
In-store promotions as well as research gleaned from retail outlets has helped NSEC boost Norwegian seafood sales by an amazing 3,600 percent since 2005. A constant flow of PR and events coordinated by the NSEC helped ensure a 120 percent increase in seafood exports to China from 2008 until the 2011 drop-off caused by China’s backlash to the award of the Nobel Peace Prize to a Chinese dissident. NSEC, points out Brown, has been clever at PR marketing through celebrities like Nobu — the famous Japanese chef — and Chinese actor Jackie Chan, celebrity chef Dong Zhenxiang and Hong Kong TV host Icy Wong Yuen-man.
Collaboration has also worked in the case of New Zealand’s seafood export sector, which had lost market share and profitability in China due to “ankle tapping” by firms that caused a drop in prices for New Zealand product in China. Brown notes that the lack of coordinated brand management also contributed to a proliferation of non-authentic “New Zealand” product by Chinese competitors. Set up as a local company in China, Pure NZ Greenshell Mussels Trading Co. is owned by four of New Zealand’s largest mussel producers, including Sanford and Greenshell New Zealand and markets all New Zealand mussel imports under a single brand, “Pure.” Currently operating on a commission, the firm is seeking an import license from the Chinese government that will allow it handle all aspects of the import and distribution process. Aside from lifting exports in value terms, the Pure NZ Greenshell Mussels Trading Co. venture has “allowed sharing of information and will be extended to other seafood categories,” explained Brown.
The challenges of getting everyone under one national flag in China is obvious in the case of Canada which, noted Brown, is one of the few major export nations not to have a national pavilion at the annual China Seafood Expo, held last winter in Dalian. While several Canadian provinces have promoted in China — New Brunswick and Prince Edward Island have both conducted media campaigns and chef trainings to promote lobster sales in China — similar efforts have been made by the Nova Scotia Fish Packers Association and Newfoundland provincial authorities. A centralized effort is emerging in the form of the Canadian Lobster Council. Getting everyone under a national flag is worthwhile but takes expense and effort, said Brown.
“This process is long, as evidenced by the time it has taken to set up the Canadian Lobster Council, and the time it is taking to find a model to fund it.”
With New Zealand promoting “Pure,” others have been reporting efforts to collaborate: among them Ireland, which has a “Jade” brand for China exports, managed by the country’s food exports promotion agency, Bord Bia.
No such effort has yet been mounted by Russia, China’s leading supplier of aquatic products with a 28 percent market share in 2011, followed by the U.S. (an 18 percent market share). Canada, Norway and Japan follow these market leaders. Norway and Japan have, however, seen the value of their imports fall significantly, due to political reasons.
