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Chinese tech CEO Richard Liu arrested, then released in US

Chinese language e-commerce firm JD.com is commonly overshadowed by its larger rival Alibaba. Now it is within the international highlight for all of the incorrect causes.

Richard Liu, the billionaire founder and CEO of JD.com (JD), made headlines all over the world this week after he was arrested in the USA 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 prime 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 undoubtedly take pleasure in a sort of celeb standing,” stated Benjamin Cavender, a Beijing-based analyst with China Market Analysis Group. “Shoppers are extra probably to concentrate on Richard Liu’s issues than they might be in most different markets.”

JD.com is China’s second-largest on-line purchasing web site after Jack Ma’s Alibaba (BABA). Getting in early on the rise of e-commerce in China has helped make Liu, 45, one in every of 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 stated he wished 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 every part from bicycles to drones, the corporate boasts that 90% of products purchased on JD.com are delivered the identical day or the following.

01 Richard Liu FILE RESTRICTED
Richard Liu is one in every of China’s richest males.

Promoting BMWs and watches on-line

JD.com sells merchandise starting from high-end style to contemporary groceries, focusing on China’s extra prosperous buyers. Huge identify manufacturers like Japanese retailer Muji, luxurious watchmaker Chopard and automobile producer BMW (BAMXF) have flagship shops on the positioning, which has greater than 300 million lively customers.

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

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

JD’s main buyers embrace 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, which 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 many years, Liu’s hometown and household remained poor for many of his youthful years. Throughout a speech at his childhood center faculty final yr, he advised children that he used to dream of consuming meat, as a result of he had pork simply a couple of times a yr.

When he received into Renmin College, a prime school 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 stated in an organization weblog publish.

When he graduated from school, most of Liu’s classmates wished to enter authorities, or research overseas. Liu did not wish 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 medication for his grandmother.

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“I wanted to make cash to pay for her medical care,” Liu stated in January on the World Financial Discussion board in Davos.

So in 1998, he arrange a enterprise promoting pc 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 have been reluctant to be open air, the place they could are available in contact with the lethal respiratory virus. Liu closed his outlets and advised a lot of the staff to remain residence whereas he huddled with managers to determine tips on how to transfer stock.

“Then someday, one in every of our managers stated: ‘Why do not we promote our merchandise from the web?'” Liu stated at a retail convention earlier this yr. “So we needn’t see our clients. [There] was no threat anymore, from either side,” he stated.

Liu based what would ultimately develop into JD.com the next yr at a time when e-commerce was simply beginning to take off in China as an increasing number of individuals gained entry to the web.

— Serenitie Wang and Jackie Wattles contributed to this report.

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

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