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China's internet tiger NetEase aims to make retail as big as games

Understanding consumers key to future growth, says CEO Ding

NetEase is seen as one of the most promising internet companies outside China's big four.   © Imaginechina/AP

BEIJING -- One of China's most promising internet companies, NetEase, will try to maintain double-digit growth by making its online retail arm as large as its core mobile games business, according to CEO and founder William Ding Lei.

In an interview, Ding said the company would also boost overseas investment with the aim of developing virtual reality games.

The future of China's internet industry will be shaped by technological innovation, according to Ding, who highlighted self-driving cars as one of the most promising areas being developed. The technology had the potential to resolve several problems the country faces, such as air pollution, traffic congestion and high logistics costs, he added.

The company, Ding said, is focused on innovation that can solve some of the issues faced by society. Going forward, this will involve an emphasis on virtual reality and artificial intelligence, which he foresees being key areas in gaming and the education industry.

Ding puts the country's online retail growth down to two factors. Firstly, consumers are more prepared to spend on quality and want a higher standard of living than in the past. The other is the development of infrastructure such as logistics and electronic payment services.

William Ding, CEO and founder of NetEase (Photo by Shunsuke Tabeta)

China's retail market has undergone a fusion of online and brick-and-mortar channels, and NetEase plans to ride on this wave.

As NetEase's strength lies in retail, said Ding, the company has a deep understanding of Chinese consumers, and is

The company's Knives Out title has consistently ranked in the top ten games in Japan since its release in November.

Ding aims to increase the percentage of online retail as part of overall revenue, targeting a breakdown of roughly 40% each for online retail and games, and 20% for the company's media business.

NetEase launched in 1997 and debuted on the Nasdaq Stock Market in 2000. Its net profit totaled 10.7 billion yuan ($1.68 billion) on revenue of 54.1 billion yuan in 2017. With its market capitalization reaching about $39 billion, it is regarded as one of China's most dynamic internet companies outside the big-four of Baidu, Alibaba Group Holding, Tencent Holdings and JD.com.

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