Ejiao good for ladies but spells doom for donkeys

March 09, 2017 17:34
The surging demand for ejiao, which is derived from the skin of donkeys, could lead to a drastic fall in the animal's population. Photo: Donkey Sanctuary

Ejiao, a kind of gelatin obtained from donkey's skin, is one of the most popular gifts for Chinese women celebrating International Women’s Day, or Queen Day in China.

It is a traditional Chinese health care product that dates back to the Qing dynasty. It is regarded as a good blood tonic, especially for women.

Dong-E-E-Jiao Co. Ltd. (000423.CN), a state-owned pharmaceutical company, controls the lion's share of ejiao supply in the country.

The company used to provide premium-quality ejiao for top party cadres. It later became part of China Resources Group before it was spun off and separately listed on the Shenzhen stock exchange in 1993.

The Shandong-based company specializes in ejiao products such as ejiao bar, compound ejiao, ejiao tonic and eiao mask. It controls nearly 80 percent of the market in China.

In recent years, ejiao has become increasingly popular among rich Chinese women who use it to help cure dizziness, insomnia, and anemia.

In essence, ejiao is an animal protein, similar to bird’s nest, deer antler, and hashima (a fatty tissue found in frogs).

Its popularity is partly due to Dong-E E-Jiao's shrewd advertising campaign.

The firm's advertisements are embedded in popular historical dramas like Empresses in the Palace and The Imperial Doctress, where the emperor is seen giving out premium-quality ejiao to imperial consorts as a gift to celebrate holidays or reward for their contributions.

Because of these plugs, Chinese women came to learn of ejiao's medicinal attributes and were keen to try it themselves.

Last year Dong-E-E-Jiao's revenue jumped to nearly 6 billion yuan (US$868 million), from 3 billion yuan in 2012, on robust demand for ejiao. Its net profit more than doubled during the period.

The company’s market value has reached 37.1 billion yuan.

The huge demand for ejiao has pushed up the price of donkey hide. A sheet of donkey skin can only produce 1.5 kilograms of ejiao.

One donkey hide now costs almost 3,000 yuan, or six times its price in 2010, according to data from an industry association. By comparison, horse or mule skin is around 200 yuan.

As domestic supply dwindles, Chinese businessmen have turned to Africa.

The donkey population in China has more than halved since 1990, according to animal welfare group Donkey Sanctuary.

China is now importing about four million donkey hides  year, and if the trend continues, the supply of donkeys from Africa could be wiped out soon.

This article appeared in the Hong Kong Economic Journal on March 9

Translation by Julie Zhu

[Chinese version 中文版]

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Hong Kong Economic Journal columnist