Some say Chinese internet industry is kind of like a zoo. There's "penguin factory", a nickname for Tencent; "cat factory" for Alibaba, "dog factory" for JD, and so on. And the Guangzhou-based NetEas, which is dubbed the "pig factory" won its name fair and square by having a founder who is actually involved in pig farming.
As a veteran of China's internet industry, Ding Lei founded NetEase at the age of 26, and became the richest man in China at 32. But at 38, Ding, who's worth over 100 billion yuan, embarked on his "obsession" with pig raising.
Under his leadership, NetEase has been on a rollercoaster ride of dramatic twists and turns. Founded in 1997, NetEase modeled its development after Yahoo.It went on to launch China's first all-Chinese search engine, the first site to offer free personal homepage, and first free mailbox. NetEase once became the most popular website among Chinese netizens.
However, when it went public on NASDAQ in 2000, the dot-com bubble bursted. At the brink of survival, in 2002, NetEase once again took the market by storm with the game "A Chinese Odyssey", propelling its stock price steadily to 72 USD by 2003, crowning NetEase as the "No.1 stock on NASDAQ". As time went on, NetEase's developmental trajectory grew more and more perplexing for onlookers. At times, it ventured into the music industry; At other times, it delved into education. One moment, the CEO was selling towels, and in the next, he's raising pigs.
Many people struggle to define what company NetEase is, but its financial reports provides a clear answer. In the third quarter of 2023, NetEase achieved a net revenue of 27.27 billion yuan, with income from gaming and related services accounting for almost 80%. NetEase is without a doubt a gaming company. It has developed numerous top-tier IPs. And its "on-again, off-again" relationship with Blizzard has also drawn significant attention. In the global mobile gaming market, Tencent leads by a wide margin in revenue. While NetEase ranks fourth, closely trailing Blizzard and Playrix.
However, NetEase's gaming business is not without its challenges. In 2022, Ding Lei proposed an overseas strategy supported by self-developed games and investment. Despite owning more than 30 studios overseas. NetEase's self-developed games didn't quite match up to local alternatives, it struggled to compete with industry giants like MiHoYo and Tencent in overseas markets, and even lagged behind Tier 2 gaming companies like 37 Interactive Entertainment.
Fortunately, these setbacks have limited impact on NetEase's overall performance. In the third quarter of 2023, NetEase achieved a net revenue of 27.27 billion yuan, with a net profit of 7.8 billion yuan, and a year-on-year growth of nearly 18%. Meanwhile, the gross profit margin for the same period reached an impressive 62%. On December 13 of last year, NetEase briefly surpassed Meituan with a market cap of HKD 542.5 billion, to be the fourth-largest internet company in China, ranking only behind Tencent, PDD, and Alibaba.
Despite being "gaming-centric", NetEase also has noteworthy achievements in other businesses. NetEase Cloud Music went public in 2021, becoming the first listed music community globally, and turned losses into profits in the first half of 2023.
Among today's multitude of Chinese internet companies, when compared to rising stars like ByteDance, NetEase may not be the most shinning one, but it certainly stands out as one of the most unique with its inherent distinctiveness and innovation, as part of the rise, develop, and flourish of China's internet industry.
出品:南财国际传播中心 21新媒体中心 创意互动中心
策划统筹:于晓娜 丁青云
内容统筹:谭婷 谢珍
执行统筹:黄欣然
设计统筹:林军明
视频统筹:白宇航
监制:施诗
英文翻译amp;配音:李莹亮
海外运营监制: 黄燕淑
海外运营内容统筹: 黄子豪
运营支持:曾静娇
审校:强燕 魏雯静 黄志明
