The Big fish eats the small fish?

Since I returned from China, I've got at least 4 companies consulted me regarding setting up some sort of big plant for Chinese market.  But the question is: will the future return pay off the investment and then keep making profit in the long run?

One of the questions people constantly ask me is: will Chinese market pay premium for it? My answer is Yes or No.  Yes to the retail market, No to the wholesale market.  The consumers are willing to pay big bucks for high end products, lobster is one of them; however, for manufacturers, the margin is not much at all, because they have to go through all those "filters". 

Currently, the whole frozen market is under test.  Personally, I don't think it's a great time to enter it with full force, because no one knows how the market is going to response after this initial period of time.  Besides, there are too many players in the market right now, and ultimately, as we expressed in Chinese sayings, "The big fish eats the small fish".  Even though I truly hate this part in the business world, it's a cruel fact.  When there are too much competition, the big player is going to lower their price until all the little players get pushed out of the game. Any investment involves risk, but I would want to know who the players are before I position myself in a more appropriate place, and then make business strategy accordingly.

For those companies have huge amount of capital and are willing to be in the "red" in the earlier years, the wholesale market is the way to go for sake of volume and long term steady accounts.  The trade off is the premium margin. For the less competitive companies, I would toward the retail market - sell smaller quantity but with higher margin.  Usually this way they get paid faster which allow the cash flows among the business cycles, but it's not always easy because it requires a lot of more work, especially in "building relationships". 

I'm no market expert, so above just a few thoughts of mine while I got to think if I were a company who wants to share a piece of pie in this market, what would I do.