What's cooking with Chinese billionaire Jack Ma? A look at his new food business

Alibaba founder Jack Ma may be the poster boy for China’s tech industry, but he is jumping the ship now.

Last Wednesday, the billionaire seeded a startup, whose name roughly translates to “Hangzhou Ma’s Kitchen Food,” to process and sell farming produce, according to Chinese public records.

His latest setup is located in his hometown in eastern China Hangzhou, which also serves as the base for his e-commerce and tech giant Alibaba (BABA).

Let’s take a closer look.

About Jack Ma’s latest food setup

According to the National Enterprise Credit Information Publicity System, a government-run corporate registry, Hangzhou Ma’s Kitchen Food will focus on the sale of pre-packaged food and selling “edible agricultural products.”

With a registered capital of 10 million yuan ($1.4 million), the new company is entirely owned by Hangzhou Dajingtou No 22 Arts and Culture, the entrepreneur’s another venture set up in 2019 for investment deals in his country. He owns 99.9 per cent of its stake, according to South China Morning Post.

According to South China Morning Post, senior officials of his Jack Ma Foundation, the philanthropic organisation established in 2014, will be holding top positions at the new firm.

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Details on its business model and the kind of food that will be sold is yet to be known.

Ma founded Alibaba in 1999 and stepped down as a chairperson in 2019. This came a year before landing a hot water with Chinese authorities for criticising the country’s financial regulators and banks.

He remained an Alibaba shareholder but stayed away from the limelight since then, as per Bloomberg.

In the meantime, he also shifted his focus to agriculture as his South China Morning Post newspaper reported him visiting agricultural laboratories in the Netherlands, a tuna farm in Japan and a night market in Thailand to understand the thriving industry.

The news of his latest venture comes at a time when investors are paying close attention to his business activities.

Booming pre-packaged food industry in China

The ready meals, food that is ready to heat and eat, industry is growing massively in China.

According to Euromonitor International, the country’s market was worth about 71.1 billion yuan ($9.9 billion) last year, a rise of about 28 per cent from 2018.

The Euromonitor data suggests that there has also been an increasing demand for other types of pre-packaged food such as meal kits, food boxes that require simple assembly or cooking. The industry nearly tripled from 10.6 billion yuan ($1.5 billion) in 2018 to 29.1 billion yuan ($4 billion) in 2022.

According to SCMP which cited a report by iiMedia Research, the industry is further expected to grow with sales of about 510 billion yuan this year, and has the potential to double in the next three years.

Some experts are believe that Ma looks forward to grab this huge business opportunity.

“Packaged meals are becoming increasingly popular. Consumers in some cases are choosing these meals as they are trading down and not dining out as much, but are also choosing them for access to variety and due to time constraints,” Ben Cavender, managing director of China Market Research Group, a strategy consultancy told CNN.

He highlighted how the businessman can use his association to e-commerce to innovate and add more value to the business and the industry.

“If, instead, this ends up being more about sales of fresh foods like fruit, there is also demand for a wider variety of high-quality options and reasonable prices, and this is a space where his ties to e-commerce … would add value,” Cavender added.

Jack Ma’s disappearance from public view

Ma’s whereabouts and activities have been the topic of discussion since 2020 when he stepped away from the limelight.

China was clamping down on both of his companies – Alibaba and Ant Group Co – in a campaign to compress an increasingly powerful private sector. This was triggered by his remarks on the country’s unfashionable financial system.

Since then the businessman has devoted majority of his time to agriculture through his foundation.

His visit to a school in his hometown in March was regarded as a sign he was beginning to resume public activities, as per SCMP.