The Chinese vending machine full of live crabs

One more way China is out-innovating the US: with a vending machine full of live crabs

By Gwynn Guilford @sinoceros 3 hours ago

guylooking-at-crabs

It’s that time of year again, when the people of China unite in tearing apart exoskeletons to suck up the flesh of hairy crabs. From August to October, the crabs—which get their name from the hair-like tendrils that grow on their claws—sell like hotcakes throughout China. Except, hotcakes don’t sell in vending machines. Live hairy crabs? Apparently, yes. On September 11, a vending machine stocked with live crabs appeared on a street in Hangzhou, the capital of Zhejiang province. The machine, which is restocked daily, sells crabs for around 20 yuan ($3.27), along with the appropriate accoutrements (crab vinegar and two bags of ginger tea).“It arrived just this evening—we’re the first company in Hangzhou to have one!” Mr. Liu, the vending machine’s owner, told City Express. Liu, who owns the shop next door, is hoping to capture after-hours demand for crabs with the self-service machine. ”Crab shops like ours, they generally close at night,” said Liu. “But what are people to do at night when their stomach starts to feel empty and they want to chow down on a hairy crab and knock back some booze?”

If you assumed this cutting-edge invention was brand new, you were wrong. In 2010, another crab vending machine appeared in a Nanjing subway station, pictured below:

From “Crab Villa” to “Golden Armor”

Liu bought the latest crab machine from a man named Shi Tuanjie, chairman of the Gaochun Double Lake Crab Company, who owned the original machine pictured above. In its heyday, Shi’s original machine sold 200 crabs a day and boasted crab-savvy innovations, such as climate control and packaging:

The machine’s temperature of 5-10° C preserved the crabs in a dormant state longer than was possible in a stall, leading many people to call them “sleeping crabs.”

But the machine’s winning characteristic was the crab packaging. Sellers typically bind the claws of hairy crabs, which supposedly hurts the flavor. To fix this, Shi built a “Crab Villa,” a multi-tired box designed to make crabs feel like they’re in a cave. Shi says he came up with this idea one day, long after hairy crab season had ended, when he found a crab hiding under his sofa.

What stocked the Nanjing machine, though, was Shi’s upgrade of “Crab Villa”: an edible container that neither broke the crabs’ legs nor suffocated them. Dubbed ”Golden Armor,” Shi’s new container could be dropped in boiling water at home, minimizing pinching risk.

Of bound claws and “bath crabs”

But when hairy crab season rolled around in 2011, Double Lake didn’t restock the Nanjing vending machine. It’s not clear why, but local media reports suggests it was more successful as a marketing stunt than anything else. “Since more people ogled the vending machine crabs than actually bought them, the crab mortality rate was fairly high,” said the Yangzi Evening News (link in Chinese).

Even if Hangzhou’s vending machine isn’t all that profitable either, Liu, like his predecessor, is banking on the machine’s marketing benefits in the hopes of boosting his store’s crab brand.

But Liu may have a sales advantage over Shi: the brand integrity of his merchandise. Shi’s crabs came from Gaochun Lake, an area where crabs are considered inferior to those of Yangcheng Lake, the origin of Liu’s crabs. (Gaochun Lake has been associated with so-called “bath crabs” (paywall)—which are raised in questionable habitats and sold shortly before harvest season to upmarket farms in Yangcheng or Taihu Lakes. Those farms then mix the inferior crabs in with the higher-pedigree crabs, passing them off as the latter when they sell them to distributors.) But there may be a weak spot in Liu’s endeavor. It looks like Golden Armor wasn’t part of his deal.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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