Chinese tech CEO Richard Liu arrested, then released in US

Chinese language e-commerce firm JD.com is usually overshadowed by its greater rival Alibaba. Now it is within the world highlight for all of the fallacious causes.

Richard Liu, the billionaire founder and CEO of JD.com (JD), made headlines around the globe this week after he was arrested in america on suspicion of sexual misconduct.

The Red Tea Detox

The corporate says Liu, who has since returned to China, was falsely accused. However the consideration is not going away.

His identify stays a high trending matter on Weibo, China’s Twitter-like social media platform, the place customers are sharing the police mug shot of Liu wearing orange jail garb and discussing the way forward for his $45 billion firm.

“Firm founders in China positively get pleasure from a form of movie star standing,” mentioned Benjamin Cavender, a Beijing-based analyst with China Market Analysis Group. “Customers are extra probably to pay attention to Richard Liu’s issues than they’d be in most different markets.”

JD.com is China’s second-largest on-line procuring website after Jack Ma’s Alibaba (BABA). Getting in early on the rise of e-commerce in China has helped make Liu, 45, one among China’s richest tech tycoons with an estimated internet value of greater than $7 billion.

In an effort to tell apart himself from the competitors, Liu has mentioned he needed his firm to promote genuine items and be in full management of delivering them.

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JD has constructed a sprawling logistics community, tapping into lots of of shops and warehouses across the nation. Utilizing the whole lot from bicycles to drones, the corporate boasts that 90% of products purchased on JD.com are delivered the identical day or the subsequent.

Richard Liu is one among China’s richest males.

Promoting BMWs and watches on-line

JD.com sells merchandise starting from high-end vogue to recent groceries, concentrating on China’s extra prosperous customers. Massive identify manufacturers like Japanese retailer Muji, luxurious watchmaker Chopard and automotive producer BMW (BAMXF) have flagship shops on the positioning, which has greater than 300 million energetic customers.

The corporate’s tag line — Genuine Merchandise, Delivered At this time — takes a dig at Alibaba and different rivals who’ve been affected by complaints of not doing sufficient to drag faux items from their platforms.

Like Alibaba, JD.com is attempting to succeed in new clients abroad. The corporate has been spending closely to increase operations to Southeast Asia and Europe.

JD’s main buyers embody Chinese language tech big Tencent (TCEHY) and US retailer Walmart (WMT), whose Chinese language enterprise it purchased in 2016. Google (GOOGL) invested $550 million within the firm in June.

Liu owns about 16% of JD however controls 79.5% of its voting rights, that means a scandal tied to him might have outsized repercussions for the corporate.

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Dreaming of meat

The billionaire tycoon comes from humble beginnings.

He was born Liu Qiangdong in Suqian, a village round 250 miles northwest of Shanghai.

He grew up simply as China was starting a sweeping program of financial reforms. Whereas the nation would expertise explosive progress within the coming a long time, Liu’s hometown and household remained poor for many of his youthful years. Throughout a speech at his childhood center faculty final 12 months, he informed youngsters that he used to dream of consuming meat, as a result of he had pork simply a few times a 12 months.

When he bought into Renmin College, a high faculty in Beijing, Liu recalled his complete village pitching in to assist ship him off.

“They donated a complete of 76 eggs and 500 yuan to ship me off for the chance that modified my life,” he mentioned in an organization weblog publish.

When he graduated from faculty, most of Liu’s classmates needed to enter authorities, or research overseas. Liu did not need to be a bureaucrat and he could not afford to go abroad. He was additionally keenly conscious of the truth that his household was too poor to afford drugs for his grandmother.

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“I wanted to earn a living to pay for her medical care,” Liu mentioned in January on the World Financial Discussion board in Davos.

So in 1998, he arrange a enterprise promoting laptop equipment in Zhongguancun, a tech hub in northwest Beijing.

SARS outbreak drove Liu on-line

By 2003, Liu’s enterprise had grown to a dozen brick-and-mortar shops.

However then the SARS outbreak hit China. Clients and staff had been reluctant to be outdoor, the place they could are available in contact with the lethal respiratory virus. Liu closed his retailers and informed a lot of the staff to remain house whereas he huddled with managers to determine learn how to transfer stock.

“Then in the future, one among our managers mentioned: ‘Why do not we promote our merchandise from the web?'” Liu mentioned at a retail convention earlier this 12 months. “So we needn’t see our clients. [There] was no danger anymore, from either side,” he mentioned.

Liu based what would finally change into JD.com the next 12 months at a time when e-commerce was simply beginning to take off in China as increasingly folks gained entry to the web.

— Serenitie Wang and Jackie Wattles contributed to this report.

CNNMoney (Hong Kong) First printed September 4, 2018: 5:39 AM ET



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