James O’Donnell runs the Shanghai office of Bord Bia, the Irish food promotion board. He talked to SeafoodSource on the sidelines of the 2018 Seafood Expo Asia in Hong Kong about current market conditions in China, how his office targets marketing of Irish seafood to Chinese consumers – and also about the need for a tighter supply chain in China to deliver a larger share of currently strong prices back to the Irish seafood supplier. China was the main source of visiting buyers for the expo’s annual Marketplace forum, hosted by Bord Bia for buyers of Irish agricultural and seafood products.
SeafoodSource: How have Irish seafood exporters fared in China this year?
O’Donnell: All this year, seafood prices have been rising in China. There is a strong market. Crab season is just starting. But most of our suppliers have already sold through. Five years ago, people didn’t know what to do with [Irish] brown crab. Now demand for them exceeds supply.
SeafoodSource: This sounds great for Irish suppliers, no?
O’Donnell: This is good news for Irish suppliers. However, we don’t want to see an increase in consumer prices, but we think the share of the retail price that goes back to the supplier should increase. Producers get CNY 10 (USD 1.46, EUR 1.25) for an Irish oyster that takes three years to produce but these are being sold at CNY 40 (USD 5.85, EUR 5.00) at the supermarket and CNY 78 (USD 11.40, EUR 9.75) at the restaurant level in China.
SeafoodSource: But how do you achieve that greater share for the producer?
O’Donnell: China has a convoluted supply chain. Too many people in the chain are taking supply and a share of the price. We think that this number [of people in the supply chain] will drop. We need a tighter supply chain.
Also, we expect to see more clarity around the pricing. If a consumer is spending CNY 40, it should be clear what they’re getting. For instance, we want to remove the product which is falsely being claimed to be Irish.
SeafoodSource: Is this a commonplace problem?
O’Donnell: Yes. We find a lot of oysters being sold as Irish on Chinese online stores which are not Irish and we get them taken down.
SeafoodSource: Is it easy to get the online retailer to comply?
O’Donnell: Yes. They are keen to cooperate because for them it’s a reputational issue. After all, several of them [Chinese online retailers] are listed [publicly] in places like New York.
SeafoodSource: Isn’t it theoretically possible for an Irish seafood supplier to cut out the middlemen and sell their product directly to one of the big online operators like Tmall.com or JD.com, which have global sourcing teams and who can handle the import process?
O’Donnell: Platforms like Tmall still occupy a minority of the trade in China. In China, large retailers don’t tend to import directly. They prefer to leave that to experts. This is different to other markets. [British based multinational retailer] Tesco, for instance, would handle imports in most of its global markets. In China, they [retailers] may perhaps handle some high-volume items but certainly not lower-volume shipments of oysters, for instance.
SeafoodSource: How does a smaller country like Ireland compete in a huge market like China in terms of promotional resources?
O’Donnell: By focusing our marketing budgets and activities. The awareness of Ireland is very high among a certain age cohort in China, the 25- to 40-year-old age group. This is in large part because Ireland is a key source of infant milk formula. So we target our message at this age group and we use social media and key opinion leaders on Chinese social media.
For instance, we brought a range of Irish products to a top restaurant in Shanghai and worked with a key opinion leader who was streaming live from the restaurant as the chef was preparing the various dishes. This opinion leader has over three million followers. And we are able to see how many are engaging as they’re streaming.
SeafoodSource: How do you go about finding the right key opinion leader?
O’Donnell: We use an agency in China which is expert in online marketing and selects the opinion leader according to the demographic or income group we are targeting. We have another key opinion leader, for instance, to promote Irish dairy produce. She traveled to Ireland and was streaming live from a farm to her followers in China.
SeafoodSource: How will China rank as a purchaser of Irish seafood in 2018?
O’Donnell: China is in the top three with France and the U.K. Catches were down because of the hot summer. Volumes are down but the value of seafood exports to China is up this year.
SeafoodSource: Aside from brown crabs, what are some of the Irish seafood species in demand in China?
O’Donnell: Whelk razors from Ireland are very popular. Shellfish give you visibility. We also did a lot of marketing around blue lobster. The idea is you bring something new each year.
SeafoodSource: Have you had much luck growing a market for fish in China?
O’Donnell: Whitefish isn’t a priority as we don’t have the volumes. Likewise, salmon from Ireland isn’t being targeted at China, where the market is very much a volume game dominated by supply from Chile and Norway.
Photo courtesy of Bord Bia
