E-commerce and the rise of casual dining restaurant chains are driving demand for cheap whitefish in China

Chinese whitefish processors, as well as exporters of pangasius and other low-cost whitefish around the world, are benefiting from increased demand for these products in China as informal restaurant chains and e-commerce services expand both at home and abroad.

Li Zhiwen, deputy general manager of Yangjiang Xincheng Aquatic Producers, said at a forum on pangasius in Wuhan that the sales potential of whitefish is now virtually limitless due to the rise of China’s mass seafood restaurant chains. He said this trend shows no sign of stopping as softer economic growth is likely to continue to drive demand for lower-end whitefish species.

In China, informal restaurant chains serving inexpensive seafood dishes are becoming increasingly popular. Chains such as: Tai Erwhich aims to open up to 100 more restaurants in China and 20 abroad this year, and Xiao Yu Hao, aimed at consumers looking for a casual dining experience, offers a casual setting and a menu of stewed and grilled fish dishes.

Speaking at a forum in Wuhan, Xiao Yu Hao co-founder Huang Junben said there is huge potential for further expansion of China’s informal restaurant chains. He said the sector’s appeal is greatest among younger consumers, women and the lower and middle classes. Like Tai Er, Huang plans to expand his restaurant chain abroad, especially in Southeast Asia.

The main reason why restaurants are now finding a good time to expand is the sharp increase in sales in China’s takeaway restaurant sector since the introduction of Covid-19 regulations have been abolished in the country. According to the National Bureau of Statistics, sales in this sector in 2023 were CNY 5.2 trillion ($728 billion, €676 billion), up 20.1 percent year-on-year.

However, it is not only the development of restaurants that is causing a sharp increase in demand for whitefish.

Chinese e-commerce channels have increased demand for companies processing cheaper varieties of seafood. The growth of Chinese e-commerce, thanks to its huge user base and cheap goods, has enabled key players such as Alibaba and Temu to expand into other Asian markets.

Taking advantage of this ever-increasing sales path, Guangdong Mingji Aquatic Products, a company specializing in grilled fish doubling its catfish production capacity to increase exports and sales to regional consumers through cross-border e-commerce, according to Zheng Zhuofeng, president of Guangdong Mingji Aquatic Products.

This expansion of both e-commerce and foodservice chains is good news for producers of key species such as pangasius and catfish. Snakehead has also become a popular alternative to whitefish, although its price is at a higher level compared to the other two species.

The main producers of snakeheads in China include aquaculture conglomerate Guangdong Evergreen, which announced in 2021 joint venture with Nansha Modern Agriculture Industry Group for breeding sea bass, snakehead and catfish.

Zeng Lin Bin, head of domestic promotion at Guangdong Evergreen, said the trade value of marinated and grilled fish restaurants is more than CNY 1 trillion ($140 billion, 130 billion euros) annually, mainly due to the expansion of franchise chains.

However, while demand is high, increasingly intense competition in the processing sector has resulted in falling fish prices. As producers feel pressured by lower prices for their fish, they also face rising feed prices, requiring them to use alternative strategies such as species diversification.