China's seafood industry will enjoy an explosive growth over the next five years and could hold big investment opportunities rising from increasing domestic demand.

"Seafood purchases currently account for 40 percent of the restaurant industry's variable cost and will grow to 60 percent by the end of 2015, which means the industry will see more than 15 percent growth every year," Zhu Changliang, vice-chairman of the seafood branch at the All-China Federation of Industry and Commerce, said at a conference promoting the China Top 10 Frozen Seafood Awards and Forum, which will be held in May in Wuhan, Hubei province.

China is the world's biggest seafood producer, contributing 70 percent of the global total worth $100 billion. About $20 billion of that is for export.

"As demand in Western countries has decreased and the yuan has appreciated, China's seafood industry must gear its marketing strategy more toward the domestic market," said Wang Dawei, senior investment manager of the agriculture business department of Legend Holdings Ltd.

"By my calculations, that is a 300 billion yuan ($45.9 billion) market - almost equal to the value of the smart grid in China," said Tang Zhongcheng, a partner at Shenzhen Co-Win Venture Capital Investment Ltd, which invested in the nation's first and only listed seafood company, Zhanjiang GuoLian Aquatic Products Co Ltd. "It's hard to imagine that there won't be more listed companies coming out in this industry," he said.

According to Tang, there are more than 10,000 companies in the seafood production industry now in China, but most of them are small players. The next step for the industry must be consolidations.

Zhu said that in order to cultivate big brands in the seafood industry, companies should engage in e-commerce by developing electronic logistics systems and cooperating with cooking websites to understand the needs of restaurants and local customs.

"Using processed seafood for faster food preparation is the future trend," Zhu said. In China, one-third of seafood products are processed, while in developed economies it is two-thirds, he added.

"The investment environment in the seafood industry has improved since 2008," said Hu Honglang, director of the aquaculture department at the Ministry of Agriculture. Hu said that fishing and aquaculture were the fastest-growing sectors among food production industries in 2010.

China consumes 40 kilograms of seafood per capita annually, double the world's average. "The amount is incredible because of our population," Hu said.

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