Summary of Key Points
This summer, shrimp specialty stores faced a downturn, with a closure rate as high as 37.2% (one out of every three stores shut down). However, the shrimp itself has not disappeared; it has shifted from being the star ingredient in these stores to becoming a side dish in other types of restaurants or a pre-packaged food for home consumption. The reasons behind this include an oversupply on the supply side, changes in consumer demand, and a transition in the industry from rapid growth to more refined operations. Small and medium-sized businesses failed due to following trends without proper support systems, while leading brands survived by focusing on their core competencies. Shrimp has now become more "invisible" in people's daily diets.
Why Did One-Third of the Shrimp Specialty Stores Fail?
The high closure rate was mainly due to the instability of small and medium-sized businesses. Over 90% of these stores were small or medium-scale, with low levels of chain operation, and many closed within one or two months. The common issues they faced included:
- Following trends without real expertise: They opened shops simply because shrimp was popular, lacking reliable sources of supply and the ability to innovate in flavors. They relied on low prices to attract customers (e.g., 15 yuan per pound or 99 yuan for six pounds). Once the peak season passed, consumers lost interest, and their businesses couldn't sustain themselves. For example, a new store near me that offered discounts attracted crowds but quickly changed to a marinated dishes shop after a month.
- Overreliance on a single product: Shrimp is a seasonal item, traditionally allowing stores to make a year's worth of profit in summer and then close for the winter. But now, shrimp is available throughout the year, diluting the peak-season traffic, making it difficult for such businesses to survive. Even established stores like Old Li's saw a 50% drop in sales.
Shrimp Is No Longer “Scarce”
The reason shrimp has lost its appeal is the oversupply that has eliminated its scarcity:
- Expansion of farming: Shrimp is now farmed in more regions across the country, with production increasing from 2.63 million tons in 2021 to 3 million tons in 2025 (an increase of nearly 400,000 tons). This has led to lower prices; a package of three pounds used to cost 83 yuan is now common.
- Surging production: The increased supply has caused prices to plummet. Consumers can eat shrimp at any time, and the early-season (February-March) varieties have taken much of the demand, reducing interest during peak seasons.
More Nighttime Snack Options for Young People
Consumers are less inclined to visit shrimp specialty stores because of a wider range of choices, which has diminished its social significance:
- Shift from a status symbol to a common dish: Eating shrimp with beer at night used to gain attention on social media; now it's just another ordinary meal. Young people prefer nightclubs with live music, budget-friendly dumpling restaurants, or fine-dining options like sushi, making shrimp less of a focal point.
- Diverse nighttime snack options: Grilled meats, hot pots, and Sichuan cuisine have become more popular, overshadowing shrimp as top choices for dining out. Young people value the atmosphere and social interaction more than the traditional shrimp-eating experience.
How Did the Leading Brands Survive?
Leading brands survived by moving away from price competition and focusing on quality and refined operations:
- Hu Da Restaurant: They use standardized methods to select high-quality shrimp and avoid low-price tactics, relying on word-of-mouth to retain customers.
- Fei Fei Xia Zhuang: They diversified their menu by combining shrimp with other dishes and extending operating hours, reducing its seasonality.
- Tian Bao Brothers: They expanded their menu to mitigate the seasonal impact of shrimp.
Shrimp Has Just Become More “Invisible”
Although there are fewer shrimp specialty stores, they haven't disappeared from the market; instead, they have integrated into a broader range of dining scenarios:
- Side dishes in other restaurants: Shrimp sales account for 10% of grill restaurant revenue, and combinations like “shrimp + hot pot” are becoming popular. It's also found in Hunan, Sichuan, and Zhejiang cuisine.
- Home consumption: Pre-packaged shrimp (seasoned or in tails) is selling well, with delivery services through e-commerce and live streaming. Consumers prefer to eat shrimp at home, further reducing foot traffic for offline restaurants.
Conclusion
The decline in shrimp popularity is a sign of the catering industry maturing. It no longer relies on short-term trends; success now requires focusing on product quality, operational excellence, and meeting consumer needs. This transformation applies not only to shrimp but to the entire industry. The era of quick wealth has passed, and only by building solid foundations can businesses endure market changes.
(The text is written in plain language for a non-financial audience.)