China’s second-largest online gaming firm, NetEase, started with fewer than 20 people when the internet was still accessed using dial-up connections and has since grown into a multi-faceted player in the tech world. NetEase is the brainchild of Ding Lei, the company’s founder and CEO, which is one of the wealthiest men in China.
After graduating from the University of Electronic Science and Technology of China with a Bachelor of Science degree in communication technology, Ding, born in Ningbo, Zhejiang province in 1971, started to work at China Telecom, one of China’s three state-owned telcos. It was a comfortable job that could have defined his entire career, but in 1994, he logged on to the internet for the first time—and a new world opened up for him.
Ding quit his job to work in a series of tech-related jobs in Guangzhou, before setting up NetEase in 1997. The company’s first domain name was 163.com, named after the number that was dialed to log on in the early days of the Chinese internet. NetEase started out as an online content portal and hosted a bilingual email system.
In 2000, NetEase went public on Nasdaq (NTES), but after just a year, allegations surfaced about false revenue reports. The company’s stock was suspended from being traded for months, and it faced the possibility of being delisted. It was during this time that Ding decided that NetEase would move into gaming. In 2001, NetEase released the massively multiplayer online game (MMO) Fantasy Westward Journey, which became one of the most popular titles in China and would go on to spawn popular sequels and mobile versions.
NetEase then released some of the most popular foreign games in China, including Minecraft, Overwatch, and Starcraft.
Because of Ding’s leadership, NetEase also steered into online music with NetEase Cloud Music, as well as e-commerce with Kaola, which was acquired by Alibaba last year. NetEase has even invested in organic pig farming.
Today, games generate 73.4% of NetEase’s revenue, while “Innovative businesses and other net revenues,” including NetEase Cloud Music, cover 23.6% of its earning. The firm reported USD 8.5 billion in revenue in 2019.
The firm is still listed on the Nasdaq exchange and it is now also present on the Hong Kong stock exchange (HKG: 9999). Although less well-known than Tencent, Alibaba, Baidu, or ByteDance, NetEase remains a significant name in the Chinese internet ecosystem thanks to Ding.
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