Pig Raised By NetEase Sells For ¥100,000 On Online Auction

摘要: A team of six people is now able to manage 20,000 pigs thanks to NetEase’s technology. But how it exactly works? Ding Lei, NetEase’s founder, hasn’t revealed much details about their technology yet, but stated that NetEase would videostream the process of how the pig farm deals with the waste water. Perhaps in time we will see the intelligence of NetEase’s pig farm.

(Chinese Version)

Ding Sanshi’s black pig was officially on auction on November 25th at 10 am.

Yep, you heard it right. We are talking about the must-have pork of NetEase’s founder Ding Lei.

So far, the whole black pig that NetEase raised was auctioned at ¥108,001 after 60 biddings. Up till 22:00, one gift package of the braised black pork was auctioned at ¥4,060 after 48 biddings.

On the third World Internet Conference, NetEase’s black pig business already gained lots of attention as industry leaders praised highly of the pork. Gu Yongqiang for example commented that Ding Lei’s pork was indeed incredible and that his son really liked it. Yang Yuanqing on the other hand said in an interview that Ding Lei’s pork was incredibly delicious. Shen Hongfei and Chen Xiaoqing who are very picky also commented that the pork had a good taste to the mouth.

After seven years of making, NetEase’s Weiyang(the company’s food platform) pork is finally launched into the market. It seems that the pork has a rather good reputation whether it’s from the perspective of the market bidding or the comments from people who had tasted it.

It’s reported that NetEase’s Weiyang black pigs go through a 300-day slow raising plan. The farm house is located in a natural surrounding among bamboos and the pigs are fed entirely natural food free of chemicals. The farm house is under 24-hour monitoring and the pigs can even use the toilet themselves. The facility is kept in a hygienic condition. Shen Hongfei and Chen Xiaoqing etc. even commented that NetEase’s Weiyang pig farm is as clean as Aman Resorts. By far, NetEase Weiyang has completed its exploration in the 4th generation of international breeding model and achieved over ten innovations on the process of breeding and waste processing.

Ding Lei once stated in an interview that he wanted to enter the pig breeding sector for the fact that he wanted to transform the traditional breeding industry with the Internet spirit by applying technologies in agriculture and changing the horrible food safety issue in China. In March 2011, after one whole year of selection process, NetEase chose to set the pig farm in Anji, Zhejiang province. Then NetEase established an independent brand named Weiyang. The Weiyang black pork had gone through a long process of four years from the internal dinning halls of NetEase to the dinner of World Internet Conference.

NetEase Weiyang’s relevant director stated that the auction wasn’t aimed for getting a specific pricing when asked about opinion on the expected final bidding. Weiyang set the beginning price at ¥1 since this is the first time that the brand enters the public arena and it’s hoping to share its outcome on raising pigs with the general public. The brand also wants to attract consumers to once again notice the value of safe and quality pork.

Some might wonder if Ding Lei is just big givers that wants to improve the food safety issue in China or he just senses the potential in the pig breeding sector. According to third-party research institute Zhiyan’s report, the scale of the Chinese pig breeding sector is around ¥1.4 trillion while live pigs are valued at ¥1.2 trillion and pork products account for ¥200 billion. At present, the tendency in the Chinese pig breeding market is the growth of scale after applying new technologies in the breeding process. So can Weiyang become a leading force in this market?

The following is FreesFund’s research on the pig raising market

FreesFund’s research shows in 2015 China produced 54.87 million tons of pork, which was four times more than that in the early 80s (11.34 million tons in 1980), with an average growth of 11%. Chinese people on average last year ate 700 million pigs, which means everyone on average ate half of a pig(40 kilograms) in one year. The production of pork is still on the rise and it will only continue. On contrast to that the pork production in Europe and the U.S is rather stable and is in a relatively lower lever compared with China.

Compared with the Chinese market, the scale of the pig breeding sector in the U.S is around $50 billion, while pork products account for $37 billion and live pigs account for $13 billion. That said, the downstream pork products have a bigger say than the upstream. The Chinese market on the other hand is quite the contrary. The scale of the Chinese pig breeding sector is around ¥1.4 trillion while live pigs are valued at ¥1.2 trillion and pork products account for ¥200 billion.

Technology powers the breeding sector, pushing it to gain scale

It took the American pig breeding sector about 20 years to accumulate scale, from 1980 to 2000. Before that, the American pig breeding sector was similar to that of China as the market was a mess and individual farms scattered. In 1980 there was 700,000 pig farms and the number was cut to 70,000 to 80,000 in 2000, a 90% slump.

The pig breeding sector in China today is similar to the American pig breeding sector in the 80s. According to statistics in 2011, the number of pig farms that output less than 50 pigs had been changing at the reduction rate of several hundred every year. However, the Chinese pig breeding industry only outputs a couple million pigs on average. What really changes is the number of the farms that output more than 500 pigs. The change started in 2013.

The turning point was in 2013, when the price of pork suddenly dropped drastically. It had been dropping until 2014. In 2015, the government rolled out special regulations for pig breeding in some regions with consideration concerning environmental protection. The government this year even brought about a five-year plan for pig breeding, making the Yangtze river basin a development restricted area.

The result was the pork output of ten provinces had been reduced by 20 million. Small and med-sized pig farms suffered the most since large-scale pig farms have the capacity to process pigs’ waste and are able to meet the requirement of environmental protection.

From our perspective, pig farms have been shrinking both in scale and number. In contrast to that, the number of large-scale farms that output more than 500 pigs per year has been increasing. Leading companies like WENS and MuyuanFoods etc. have been growing by 30% in output.

According to NetEase’s data, besides technologies the technologies that have been revealed before, such as the smart cameras and sensors etc., Weiyang’s facility also has other magic. "Pigs at our production base use the toilets, sleep in apartments, they never take injections and medicines. In other words, their living habits are healthier than many people," Ding said.

When asked about Weiyang pork during the World Internet Conference in Wuzhen, Ding Lei said to the media that it only took less than ten technicians to manage 20,000 pigs in Weiyang’s farm. From that, we can pretty much tell NetEase’s pig farm has reached a certain scale. The adoption of such technology pumps in more potential for future expansion and business value.

To highlight the quality of NetEase’s pork, Ding Lei stated that Weiyang pig farm would be the first Chinese pig farm that would make the whole breeding process transparent, and that Weiyang would videostream the breeding process to the public.

And of course, to cater to Chinese people’s picky taste on delicacy, Ding Lei also sets a taste standard for his pork business. As a foodie himself, Ding Lei is able to appreciate good dish and ingredients. The Old Beijing Shaobing Shop he recommended has actually become the most popular booth at NetEase’s dinning hall. Just recently, rumor has it that Ding Lei was teaming up with Grandma’s founder Wu Guoping to enter the catering sector to build a high-end restaurant chain called Papa Pig. Ding Lei hopes to set up a high-end restaurant by the west lake in Hangzhou for the Internet industry.

It’s apparent that Ding Lei has his pig business brewing for long, and he has penetrated the pig raising process, from pig raising to the dining table.

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[The article is published and edited with authorization from the author @TMTpost, please note source and hyperlink when reproduce.]

Translated by Garrett Lee (Senior Translator at PAGE TO PAGE), working for TMTpost.

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