ECOMMERCE CATCHES ON
Getting seafood to Asian markets
A burgeoning ecommerce platform is looking to get B.C.’s small- and medium-sized seafood producers better and more secure access to the Asian market, where Canada’s products are seeing ever-rising demand, officials said.
Gfresh, an online logistics company with operations in Shanghai, Vancouver and Australia, said this week that increasing demand for fresh seafood in markets like China has driven the firm’s deep penetration of several Chinese urban markets in recent months.
Major players in the ecommerce industry appear to be taking notice. On Thursday, Gfresh said it has secured US$20 million ($26.8 million) in its first major round of venture capital financing, sourced from Riverhill Fund (Chinese online giant Alibaba’s venture firm) and Legend Capital in China. Simon Xie, Alibaba’s co-founder, now sits on Gfresh’s board.
“I think, first and foremost, it signals their confidence in the Gfresh model,” said Gfresh co-founder Anthony Wan. “While Alibaba makes a lot of investments, it’s rare that a top executive would sit on the board. And it reflects their confidence in what we do and this particular industry that we are in.”
Gfresh, launched in 2014, is now used by about 60 small-scale B.C. seafood producers to sell products directly to restaurants in China. The model involves the removal of “middlemen” importer and exporter agencies, allowing a restaurant owner in China to buy small quantities of seafood directly from a B.C. producer.
The website uses an escrow payment system to ensure the buyers and sellers are protected, and Wan said the removal of intermediate agencies also dramatically reduces the time for delivery — a key factor for seafood due to the rapid rate it spoils. “Let’s take oysters, for example,” he said. “People eat it raw, so its freshness makes a massive difference — actually in whether or not you get sick. In the old days, a batch of B.C. oysters would be transferred to the tanks of different exporters and agencies along the way, but it only has a shelf life of about seven days. This is the closest that a consumer in Asia can get to eating a fresh B.C. oyster without standing next to the ocean in British Columbia.”
According to company data, the website now accounts for 70 per cent of the market for B.C. Dungeness crabs in Shanghai; fresh salmon from the site, meanwhile, already makes up 20 per cent of the market in China’s largest city, three months after being introduced. In total, about $268 million in seafood — from markets such as Canada and Australia — has passed through Gfresh’s portal in the last two years.
The company is already planning to double the Chinese markets it reaches from the current number of 15 by year’s end, and Wan added the demand is so strong that the firm is moving into (or planning entries) in Hong Kong, South Korea, Singapore and Vietnam at the moment. Some B.C. companies have also approached Gfresh on going into the U.S. seafood market, and the platform can ostensibly be used to sell other fresh food products beyond seafood, he added.
“To be honest, I don’t know how to answer the question about the market potential,” Wan said. “Even if you just look at the Chinese seafood market, it’s a staggering amount … The goal was never just seafood; we chose seafood because it was the hardest to move. If we can move B.C. Dungeness crab to Shanghai within 24 hours without problems, you can get do any other type of perishables.”