Over the last decade, the capital value of the abalone quota units and the beach price per kilo for wild-caught Abalone has dropped by about 50% (after allowing for inflation). Historically Abalone consumption in China is strongly associated with status and prestige. While the overall volume of consumption is substantial Abalone consumption is very seasonal and there is a regular disconnect between supply and demand. This disconnect creates price elasticity and pushes importers and distributors to commit malpractices to improve their margins in turn compromising the product integrity.

Key market dynamics include:
1.Chinese consumers do not have any knowledge and awareness of the place of origin and depend on the restaurant recommendation;
2. Dishes cooked with Abalone are very traditional and the domain of highly experienced and skilled chefs.
3.The wholesalers and restaurants express common concerns regarding unstable supply, quality and product integrity and price fluctuations as a proportionate response to upstream volatility.
4. Hong Kong and Shenzhen importer practices exist due to high entry barriers and the invisibility of the supply chain.
5.Australian processors suffer from loss of control beyond Hong Kong and hence cannot track the actual consumption due to the invisibility of demand.

This project will test the following:

1. Whether a value proposition exists for Australian Wild Caught Abalone amoung the emerging affluent Chinese consumers particularly focusing on the fusion cuisine trend
2. That it is possible to differentiate Australian Wild Caught Abalone from competitor product by developing integrated B2B and B2C activation strategies
3. That it is possible for Australian Abalone producers and processors to collaborate to establish a profitable “white channel” for Australian Wild Caught Abalone