The Qianjiang Lobster Festival and the Qianjiang Lobster Ecology City are both examples of how domestic consumption of seafood has evolved and how it’s being encouraged and exploited by local business.
Opening this month in the central province of Hubei, the Qianjiang Lobster Eco-City will feature a giant 100 square-meter red sculpture of a crayfish (in Mandarin the words for cray fish and lobster are interchangeable but in Qianjiang the word refers to crayfish). There will also of course be numerous vendors and restaurants serving up crayfish, an increasingly important freshwater cash crop in land-locked Hubei which has been competing with the higher-cost aquaculture region of Jiangsu, home to the Yangcheng Lake which is synonymous with quality crayfish in China.
It will also feature outlets of McDonald’s, Pizza Hut and the electronics retailer Suning – as well as a giant cinema. The Lobster Eco-City has been built by the Guangdong Zhong Hua Group, a giant real estate developer which like many developers in China is seeking a theme to help sell their buildings. Ecology is frequently used as a marketing ploy by developers but projects rarely display any authentic ecological innovation. The new “lobster park” seeks to attract day visitors and holidaymakers from the huge and bustling city of Wuhan, an hour’s drive away, according to Hu Zhonghua, chair of the Zhong Hua Group.
But while the park is seeking to cash in on rising incomes and spending power – and a hankering for seafood – It’s not alone. This is a strategy increasingly pursued by seafood firms in the region where freshwater aquaculture has been on the rise. Crayfish exports from the region have been hit by the appreciation of the yuan against the dollar and the rise of labor costs, explains Li Jun, CEO of the Hai Hao Group, which breeds and processes crayfish in Hubei and neighboring Jiangsu provinces.
Li says when he started the firm in 1996 he sought to capture sales in the United States as a low-cost player, but that strategy is now obsolete as Chinese, not Americans, have the cash for seafood. “Back in 1996 we were selling crayfish to the USA at one yuan per 500 grams. But even though now we sell at seven dollar per pound our costs have risen 63 fold in this time and the yuan is much stronger so that means local buying power is much stronger … there is little difference now between the export price and the price we can get locally. So we’re going to go down the road of domestic sales.”
With the rising power of the yuan Chinese exporters (who bill in dollars) are not so keen on overseas sales as before. His company’s exports sales have gone from USD 100 million (EUR 88.7 million) per year to USD 40 million (EUR 35.6 million) in 2014, says Li but he is also wary of the huge investment that will be required in logistics and in the range of processed products he says his firm will launch to take some of the ready-meals sales at supermarkets.
The Hai Hao Group has also opened four restaurants this year serving its products. It’s a good example of the path being taken by Chinese aquaculture and seafood processing firms as they try to capitalize on domestic market opportunities. Clearly, huge sums of money will be required to expand logistics and processing facilities in order to adapt to domestic markets.
That’s also the case for Liangzihu Aquatic Processing Co. which has also moved away from exports to focus on opportunities in the Greater China markets – mainland and Hong Kong as well as Taiwan – explains company chairman He Qiusheng. “We are spending a lot of money on building our brand and our logistical capabilities in China right now,” he explains.
