21st Century Business Herald. Reporter: ZHENG Di. Reported in Beijing
On Oct. 15, I had a special lunch. I had lunch with Mr. Mark Han Jia-Hwan, the Chairman of the Board of DaChan Food (Asia) Limited (DaChan Food). We were sitting in his office to eat a chicken on his office desk. Mark Han pointed to the newly roasted chicken, stared at me and asked “Do you want to know about this chicken’s life?” Without waiting for my answer, Mark Han gave me the answer “give you an reassurance code. You can log in the interactive website of ‘Sisters’ Kitchen’ and immediately you will know everything about the chicken, even the videos taken during the feeding and slaughtering”.
Consumers can easily trace back to the source of the food by simply inputting the “reassurance code” on the package of a bag of chicken meat products sold under the brand of “Sisters’ Kitchen” and. Mark Han says that the information that consumers can easily obtain via mobile phone include: ①Breeding farm, breeder, time of brooding and market availability; ②The production information about the lot of feeds; ③The information about the electric slaughtering, the lot of fresh chicken meat products and quality inspection; ④The information about the deep processing of food. The ubiquitous mobile phones and Internet enables a roast chicken to tell you that where it comes from, and where it goes to. Unintentionally, DaChan Food has explained the currently popular concept of “the Internet of things” visually. Before this, accelerated by security companies and analysts, “the Internet of things” made waves in the capital market, and some relevant or irrelevant listed companies went independent one after another.
“In the future, the society has to be a vast network with the connection of things. Thus the marketing place of any commodity will become wider. The chicken meat business, originating from the small-scale peasant economy, can totally rely on the digitalization and networking, and then become exceptionally promising”. Though Mark Han did not mention the popular concept of “the Internet of things”, but that he enabled a roast chicken to show the audience its whole life via the Internet seems a little bit into it.
A talking chicken
According to Mark Han, DaChan Food was listed in Hong Kong in 2007 (Stock Code.: 3,999.HK). So far, DaChan Food is the largest chicken meat supplier in China and masters the integrated industrial chain incorporating chicken meat, prepared foods, feeds, brooding and slaughtering and the largest chicken meat supplier to KFC and McDonald’s in China. Now, DaChan Food has successively invested in 12 provinces and cities including Liaoning Province, Tianjin Municipality and Shandong Province, processes 150 million broilers and has more than 4,000 contract chicken feeding farmers and achieved operating income of above 9 billion Yuan in 2008.
Though DaChan Food is very famous in the industry, yet Mark Han thinks that in recent years, there has been a general increase of food safety consciousness in consumers in mainland China, so as a leader in the food industry, DaChan Food should be keenly aware of such changes and offer safe foods that carry complete and thorough information to consumers with the application of scientific approaches.
In order to launch the food safety traceability system that can trace the entire processes from farm to table, Mark Han has started with the chicken meat source to forge the food safety guarantee system since 2006, undertaken electronic management in such links as selection of chicken feeding farmers, chicken coop management, dispatch of veterinarians, feeds, electric slaughtering and deep process, and vertically connected the chain series through telecommunication and the Internet. Annually, the investment in such a project is above several million Yuan.
Mark Han reveals that in order to realize the goal to present a chicken’s life via the Internet, firstly, DaChan Food has undertaken the technical innovation in the basic feeding and circulation links, including the increase of RFID and 2-D code equipments; secondly, DaChan Food has increased the amount of veterinarians and quality inspection personnel at the primary level; thirdly, DaChan set another 100 central control sites throughout the country to collect and transmit the information about different links of the chicken meat industrial chain, aiming to realize the network interaction finally.
Mark Han says that DaChan Food’s reassuring and traceable production control system is attributable to the construction of the enterprise for many years. Different from the poor management of chicken feeding farmers and extensive purchase of chickens in markets by other enterprises, DaChan Food has been adopting the contract feeding mode featuring concerted supply of chicks, concerted supply of feeds, concerted supply of immunity services, concerted usage of drugs and concerted purchase, and appointed more than 600 veterinarians, personnel and quality inspection experts throughout the country to control all processes. In Mark Han’s opinion, the safety traceability management system that has been set up with huge investment is to let the broiler chicken to interact with consumers and to automatically present its whole life.
“Currently, the website of ‘Sisters’ Kitchen’ is in its initial stage of operation. Besides the above-mentioned information of foods, we can also supply the trace of videos taken during the feeding and slaughtering”. Mark Han says that network is a highly interactive platform, and many links can be added onto the platform in the future. “Maybe the interaction between the chicken feeding farmers in Fushun and consumers in Beijing will create a new selling point”.
DaChan’s moneymaking proposition
“We have spent a lot of money in making a broiler chicken automatically present its whole life. So naturally, DaChan Food’s chicken meat will be a bit expensive than those of the competitors”. Mark Han frankly admits that the reassuring chicken featuring transparent source is sold under the newly introduced brand of “Sisters’ Kitchen”, targeting at the high-quality terminal consumption market.
What is DaChan’s plan since the Company has invested such vigor in selling the digitalized broiler chicken and even bringing thousands of chicken feeding farmers onto the highway of the Internet?
“Here is a set of data. Averagely, 1.9kg feeds can be transformed into 1kg chicken meat, while 1kg pork needs 3.5kg feeds, and 1kg beef needs 8.3kg feeds. A chicken, growing from the chick to market availability, only needs about 46 days, and it is unnecessary to say how long it will take for a pig or cow to grow to into the stage of market availability”. In Mark Han’s opinion, the chicken has collectively represented the idea of building a conservation-minded society (eat less, grow faster and contribute more) and sustainable development (the chicken lays eggs, and the eggs are hatched into chickens), and this conforms to the national situation of China in the primary stage of socialism. “In China, the consumption of pork per capita is as high as 33kg. In 2007, the price of pork suddenly surged, and even sold at 30 Yuan/1kg. Under such a circumstance, the consumption of pork has become an expense to be considered for ordinary families. But, in contrast, the price of chicken meat does not change too much in recent years”.
“We expect to let more Chinese know about the reassuring chickens and accept the chicken meat that is more economical, environmental friendly and healthier through hi-tech approaches including the Internet”. Mark Han stresses that the purpose for DaChan Food to launch the Internet food safety traceability system does not target at its competitors, but to let more Chinese know about the value of chicken meat and eat more chicken meat. “In next five years, if DaChan Food can obtain more than 15% share of China’s broiler chicken market, it will be a big business with an annual operating income above 40 billion Yuan”.
Prospect of “the Internet of chickens”
At the ITU World 2009 held in the beginning of October in Geneva, Switzerland, Mr. WNG Jianzhou, the CEO of China Mobile, expressed his support of the development of “the Internet of things” in China and thought that the market and technical conditions were mature. Mr. WANG believed that the conversation between men and things could be realized through giving intelligence to things by connecting the RFID, sensors, 2-D code equipments and other equipments that were installed on different things with wireless network through interfaces, and communication and conversation between things could also be realized in the same way.
Starting from the concept of “the Internet of things”, DaChan Food’s chicken meat safety traceability management system, to some extent, is “the Internet of chickens” that brings thousands of chickens together.
Mark Han comments that as for the enterprise development in the future Internet of things, in the initial stage, DaChan Food will mainly boost the digitalization and networking of the chicken meat industrial chain of the enterprise. At present, the Company has realized the thing-to-thing conversation and thing-to-man conversation from farm to table by means of mobile phone network, RFID and Internet videos.
With the promotion of chicken meat products sold under the brand of “Sisters’ Kitchen”, DaChan Food will take advantage of the interactive website of “Sisters’ Kitchen” and “Sisters’ Kitchen” roast chicken stores to realize the customized sales mode of “virtual + physical store” next. At that time, consumers can use mobile phones or websites to realize reverse interaction and conveniently purchase a series of fresh chicken meat products and cooked chicken meat products sold under the brand of “Sisters’ Kitchen” in an individualized way.
Mr. GU Wenjun, a senior analyst of semi-conduction industry with iSuppli, says that DaChan Food, whose integrated business incorporates planting, breeding, feeds, chicken feeding, electric slaughtering, meat, food processing, catering and retail, has already possessed the advantage to undertake the vertical integration of the industrial chain, thanks to the mature operating system of the information about different links inside the Company. The concept of “the Internet of things”, like the last mile of the cable, can help DaChan Food to break the last barrier in its way to the realization of the traceability from “the chicken feeding farm to the table” so as to realize the most effective coherence of the food chain system, and then there may be new marketing mode.
However, GUAN Dai, an analyst with In-Stat, thinks that “the Internet of things” is merely an empty concept for the time being. At present, only some “the Internet of things” related stocks in the capital market such as Searainbow Holding Corp. and Newland Group can make money from “the Internet of things”. Next, enterprises that control the chips-the core technology of sensor industry and operators that control communication network will make money from “the Internet of things”. What the concept of “the Internet of things” will bring to DaChan Food will be helpful to DaChan Food’s marketing, which is a mode of marketing of green, healthy and environmental friendly foods
The concept of “the Internet of things” was proposed as early as in 1999. Generally speaking, it is to connect one thing with another to realize intelligent identification and management through information sensing equipments, for example, RFID”. WANG Man, a senior engineer in No.3 Research and Development Department and person-in-charge of wireless sensing network research in Shanghai Institute of Computing Technology, tells the reporter that China has no domination in the patent of RFID bottom. In the world, the U.S., Japan and the Europe have possessed vast advantage in sensor technology, accounting for 53% of the total application of invention-type patents all over the world.
At the ITU World 2009, Mr. WANG Jianzhou stressed that China had huge market application of “the Internet of things”, which could be applied in the aspects of communications control, intelligent building, food management and future production process management. Besides, the realization of thing-to-thing conversation and thing-to-man conversation, increase of the social efficiency and conservation of public energy will be the most significant and distinctive role of “the Internet of things”. As for the technological catching-up, there is no need to look down upon ourselves, and it needs joint effort of different industrial chains and links in the whole society.
This article is from the 21st Century Website
