In the last few years, popularity for salmon has gone up noticeably thanks to the Chinese.
Most like to enjoy the dish at a Japanese restaurant or cook it at home. You likely know someone who cannot stand it. But its popularity in China isn’t all that puzzling.
Not only is it a clean healthy food. Salmon is rich in omega-3 fatty acids, a great source of protein and a good source of potassium. The fish is also pleasant to the Chinese pallet.
But according to a recent report, about a third of the salmon in China isn’t actually salmon. It’s rainbow trout caught on the Tibetan plateau.
Fish is fish, so no big deal right?
But this little stunt has produced a good deal of outrage in the Red Kingdom.
Blockchain fish to come…
South China Morning Post (SCMP) picks up the story:
‘On social media, angry consumers said they had been misled by fish sellers marketing their salmon as imported from northern Europe or North America, with some vowing to stop buying the fish altogether.
‘It has also tapped into widespread fears about food safety in China, with many online commenters saying they did not trust the Chinese farmed freshwater fish being sold as salmon, and worrying about parasites in the raw fish.’
Consumers aren’t worried about fish. They’re worried about being sold fakes or derivatives passed off as the real deal.
Over the years, it’s happened with various domestic products. Infant formula, wine, and now fish. Trust has broken down. And Chinese consumers no longer know what they’re getting.
Fakes of the former has led to thousands of deaths. In 2004, around 50–60 babies died in rural China after drinking fake baby milk powder. Several companies making the fake formula sold their products to village markets.
100–200 babies who took the formula developed ‘big head disease’. This is where a baby’s head grows abnormally large and the rest of their body is just skin and bones.
If that wasn’t enough for parents, just four years later it happened again.
Six infants passed away, with a further 50,000 hospitalised.
Now it seems domestic salmon is also off the menu too. SCMP continues:
‘That prompted the China Fisheries Association to put out a statement on Thursday in a bid to allay fears about the safety and authenticity of salmon on the market. It said several types of fish were considered to be salmon, including Atlantic salmon, Pacific salmon and also the rainbow trout being raised at fish farms in Qinghai province.
‘The association also said that parasites were not a product of seawater or freshwater, but were rather to do with the cleanliness of the water and what the fish ate.
‘It added that the authorities supported the farmed salmon industry in China.’
There is, however, a new technology sweeping China ridding the nation of fakes.
You’ve probably already heard the technology before. It allows transactions and data sharing without relying on trust.
The technology I’m talking about is the blockchain.
Before we go any further let’s talk about the basics.
The best way to describe blockchain is to think of a digital ledger. This digital list can contain transactions, identity, or any kind of data really.
This list is then distributed, not copied, to various holders, making up a network. Each holder of the list then constantly verifies the information on the list.
In our fish example, farmers could digitally tag their fish. Then consumers can track any fish they buy from farm to plate.
They would know instantly if the salmon is from Europe, or if it’s rainbow trout from Qinghai.
Alibaba Group Holdings Ltd [NYSE:BABA] is a company that’s stepped in to rollout this kind of digital tracking across China’s entire food network. Of course there are other companies in the wings trying to do the same thing.
But a food blockchain venture isn’t the most amazing thing about Alibaba.
With Tencent Holdings Ltd [HKG:0700], they form China’s largest ecommerce duopoly. And what these two plan to do could create one of the biggest wealth opportunities within the decade.
Creating a mini China
China has a massive population. Millions of households are growing wealthier by the year. They’re moving to cities, buying smartphones, purchasing goods online.
Two companies that have benefited beyond their wildest dreams are Alibaba and Tencent.
It’s not unusual for both to see earnings growth of 50–100%.
At some point, growth will have to slow down. It’s why both companies are looking abroad for even more consumers to bolster future growth.
Where are these tech goliaths looking to secure growth?
Both are moving south, to Southeast Asia.
Like China, Southeast Asia is an untapped region. There is a massive population growing wealthier by the year.
Countries like Thailand and Indonesia are not super consumers…yet. But Alibaba and Tencent are intent on them becoming so.
It’s why both are gobbling up promising start-ups. They’re introducing unique payment systems to help consumers spend more where ever they are. They’re also building out the infrastructure that will help get more people online, looking at ads, consumer goods and entertainment.
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Editor, Money Morning