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From sea to air: the impact of wholesale seafood ecommerce in air freight

autoreBy Helen Gaoon 1 Dec 2016

As the pace of the world continues to pick up, trends in consumer expectations follow suit. Consistent and reliable goods delivered fast are the demands that shape the world today. When it comes to wholesale seafood, there are no exceptions.

Sky-high growth

These days, most roads (economically speaking, at least) lead to China. As China’s middle class grows, from five million people in 2001 to 300 million in 2015, so too does the desire for once limited goods. Fresh seafood, for example, is in such high demand in non coastal areas of China that markets in Chile, Canada, South Africa and New Zealand, to name just a few, have drastically increased their market share. In 2015, seafood exports to China reached $484.9 million, a 14.5 percent increase from the previous year. 

Coupled with the convenience and overall supremacy of eCommerce in China, the cross-border consumer tidal wave is officially unstoppable. According to eMarketer, a research consultancy, cross-border eCommerce sales in China will be worth $86 billion in 2016 with projections to reach $160 billion in 2020.

But, how?

It’s a done deal, so the next step is figuring out logistics. In the wholesale seafood market (and others like it), the question is: what is the most reliable way to get products to China, especially live seafood?

When it comes to delivery, every mode has seen booms and busts. After a lull, rail freight is once again gaining some steam as a local option for transporting non-perishable consumer goods. Trucking has seen growth and is still a necessary part of a larger supply chain. Container shipping is slow but reliable but, again, mostly for goods that don’t have an expiry date. 

But when it comes to the speed needed to deliver live wholesale seafood, airfreight forwarding beats the alternatives. But it’s not that simple. It’s never that simple. Especially in the case of airfreight, the balance between profit and practice is very delicate.

Trawling for opportunity

Live, wholesale seafood delivery has always been a difficult and congested undertaking with inconsistent results. Frozen fish became the norm to ensure dependability, but that simply won’t do anymore. A more educated consumer base has higher expectations for food. They want it fresh.

Enter airfreight. It’s officially back, not that it ever entirely went away. But it most certainly has hit a bit of turbulence in its goal of reaching ever higher heights in serving the globalized marketplace.

Big to small

The airfreight industry has undergone changes out of both necessity and circumstance. Simple factors like the size of planes has decreased. According to Boeing's Current Market Outlook, 2016-2035, large-size, wide-body airplanes accounted for 11 percent of the in-service fleet in 2016, down from 36 percent in 1995.

Smaller planes means a fight for space and less of a chance that large scale orders can be shipped together, creating headaches on the receiver’s end.

Fueling demand

Changes in the price of fuel have at times been at odds with the increasing demands of free, or as close to free as possible, delivery. According to Ti’s Global e-commerce Logistics 2016 report, “consumer expectation for ‘free’ delivery creates a damaging hurdle, as expectations are out of line with the economic reality of delivery.” What suppliers want to offer and what airfreight forwarders can actually offer are not always aligned.

Plus advanced technology allows suppliers and buyers to carefully monitor their packages in transit. Therefore, in order to reach rigid deadlines, container shippers might use airfreight for emergencies only, keeping airfreight constantly ready but seldom used. A sort of piteous understudy scenario.

It’s down, it’s up

Airfreight has faced some real setbacks, with Amazon and global market crashes changing much of the game. Data provided by the World Bank shows that the recently turbulent years between 2008 and 2012  saw base line airfreight carriage numbers decrease. The numbers have since readjusted into an upward trajectory, though not as sharp as in years past.

Convenience has a higher value than ever, though, and any platform that can provide it will find traction in the marketplace, even if they have to use airfreight. Gfresh, for example, is the world’s largest online seafood marketplace. The virtual platform allows small and large scale wholesale seafood providers access into consumer markets in China and Hong Kong. 

As always, convenience coupled with reliability equals profits. Gfresh has more than 6,300 wholesale seafood buyers in China and Hong Kong and has done over $200 million in sales, within two short years. The demand that Gfresh, and other platforms like it, feeds an insatiable appetite for “fast” markets like seafood or fashion. And they have given airfreight forwarders a little wind in their wings.

The plane truth 

As generations not knowing the alternative to living online start to mature and join the spending spree, eCommerce will undoubtedly increase. The immediate nature of eCommerce brings with it certain expectations, and the idea of fast delivery (as close to immediate as possible) at low cost isn’t going to go away.

This is the attitude into which industries must foray, wholesale seafood and airfreight alike, and they must do so by either reinventing old models or creating new ones from scratch. In the case of airfreight, the industry can catch the windfall if they partner up with industries like wholesale seafood destined for markets like China. But it’s up to them to seize the opportunity before drones replace them completely.

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Gfresh team