How Richard Liu built JD.com into a $45 billion tech giant

Chinese e-commerce company JD.com is often overshadowed by its bigger rival Alibaba. Now it's in the global ...

Posted: Sep 4, 2018 12:13 PM
Updated: Sep 4, 2018 12:13 PM

Chinese e-commerce company JD.com is often overshadowed by its bigger rival Alibaba. Now it's in the global spotlight for all the wrong reasons.

Richard Liu, the billionaire founder and CEO of JD.com, made headlines around the world this week after he was arrested in the United States on suspicion of sexual misconduct.

The company says Liu, who has since returned to China, was falsely accused. But the attention isn't going away.

His name remains a top trending topic on Weibo, China's Twitter-like social media platform, where users are sharing the police mug shot of Liu dressed in orange prison garb and discussing the future of his $45 billion company.

"Company founders in China definitely enjoy a kind of celebrity status," said Benjamin Cavender, a Beijing-based analyst with China Market Research Group. "Consumers are more likely to be aware of Richard Liu's problems than they would be in most other markets."

JD.com is China's second-largest online shopping site after Jack Ma's Alibaba. Getting in early on the rise of e-commerce in China has helped make Liu, 45, one of China's richest tech tycoons with an estimated net worth of more than $7 billion.

In an effort to distinguish himself from the competition, Liu has said he wanted his company to sell authentic goods and be in full control of delivering them.

JD has built a sprawling logistics network, tapping into hundreds of stores and warehouses around the country. Using everything from bicycles to drones, the company boasts that 90% of goods bought on JD.com are delivered the same day or the next.

Selling BMWs and watches online

JD.com sells products ranging from high-end fashion to fresh groceries, targeting China's more affluent shoppers. Big name brands like Japanese retailer Muji, luxury watchmaker Chopard and car manufacturer BMW have flagship stores on the site, which has more than 300 million active users.

The company's tag line — Authentic Products, Delivered Today — takes a dig at Alibaba and other rivals who have been plagued by complaints of not doing enough to pull fake goods from their platforms.

Like Alibaba, JD.com is trying to reach new customers overseas. The company has been spending heavily to expand operations to Southeast Asia and Europe.

JD's major investors include Chinese tech giant Tencent and US retailer Walmart, whose Chinese business it bought in 2016. Google invested $550 million in the company in June.

Liu owns about 16% of JD but controls 79.5% of its voting rights, meaning a scandal tied to him could have outsized repercussions for the company.

Dreaming of meat

The billionaire tycoon comes from humble beginnings.

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

He grew up just as China was beginning a sweeping program of economic reforms. While the country would experience explosive growth in the coming decades, Liu's hometown and family remained poor for most of his younger years. During a speech at his childhood middle school last year, he told kids that he used to dream of eating meat, because he had pork just once or twice a year.

When he got into Renmin University, a top college in Beijing, Liu recalled his entire village pitching in to help send him off.

"They donated a total of 76 eggs and 500 yuan to send me off for the opportunity that changed my life," he said in a company blog post.

When he graduated from college, most of Liu's classmates wanted to go into government, or study abroad. Liu didn't want to be a bureaucrat and he couldn't afford to go overseas. He was also keenly aware of the fact that his family was too poor to afford medicine for his grandmother.

"I needed to make money to pay for her medical care," Liu said in January at the World Economic Forum in Davos.

So in 1998, he set up a business selling computer accessories in Zhongguancun, a tech hub in northwest Beijing.

SARS outbreak drove Liu online

By 2003, Liu's business had grown to a dozen brick-and-mortar stores.

But then the SARS outbreak hit China. Customers and workers were reluctant to be outdoors, where they might come in contact with the deadly respiratory virus. Liu closed his shops and told most of the employees to stay home while he huddled with managers to figure out how to move inventory.

"Then one day, one of our managers said: 'Why don't we sell our products from the internet?'" Liu said at a retail conference earlier this year. "So we needn't see our customers. [There] was no risk anymore, from both sides," he said.

Liu founded what would eventually become JD.com the following year at a time when e-commerce was just starting to take off in China as more and more people gained access to the internet.

-- Serenitie Wang and Jackie Wattles contributed to this report.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 250869

Reported Deaths: 5481
CountyCasesDeaths
DeSoto17010171
Hinds16091318
Harrison13250193
Rankin10629208
Jackson10216182
Lee8759141
Madison8186161
Jones6222109
Forrest5917118
Lauderdale5808180
Lowndes5309111
Lafayette491192
Lamar480465
Washington4770123
Bolivar3955106
Oktibbeha390380
Panola365076
Pontotoc361152
Monroe3521104
Warren344597
Union341458
Marshall339165
Neshoba3357152
Pearl River323295
Leflore2992105
Lincoln295685
Sunflower280469
Tate269560
Alcorn262653
Itawamba261159
Hancock260458
Pike259977
Scott244745
Prentiss244052
Yazoo242654
Tippah239749
Copiah239149
Simpson233967
Leake229564
Coahoma228554
Grenada217070
Covington210471
Marion208371
Adams203270
Winston199464
Wayne198730
George197938
Attala193158
Newton189142
Chickasaw182944
Tishomingo182159
Holmes168167
Jasper167735
Clay158233
Stone141520
Tallahatchie139234
Clarke137460
Calhoun135121
Smith119423
Yalobusha116134
Walthall111736
Noxubee110222
Greene109129
Montgomery109134
Carroll104121
Lawrence102117
Perry100531
Amite96825
Webster91924
Tunica86021
Claiborne85525
Jefferson Davis84025
Humphreys82624
Benton81023
Kemper76620
Quitman6838
Franklin65815
Choctaw60013
Wilkinson58325
Jefferson53419
Sharkey42417
Issaquena1596
Unassigned00

Alabama Coronavirus Cases

Cases: 420681

Reported Deaths: 6119
CountyCasesDeaths
Jefferson61755921
Mobile30058548
Madison26852186
Tuscaloosa20652266
Montgomery18876305
Shelby18421114
Baldwin16176182
Lee12393101
Morgan12175113
Etowah11687168
Calhoun11078200
Marshall10158107
Houston8556148
Cullman7999105
Limestone796274
Elmore7783101
DeKalb767197
Lauderdale752883
St. Clair7502120
Talladega6145108
Walker5880174
Jackson578841
Colbert529873
Blount529283
Autauga515455
Coffee438156
Dale394381
Franklin365248
Chilton335365
Covington326968
Russell326810
Escambia316142
Dallas302896
Chambers281869
Clarke279633
Tallapoosa2607107
Pike247629
Marion244650
Lawrence242547
Winston225535
Bibb214447
Geneva199535
Marengo197829
Pickens196231
Hale175442
Barbour172336
Butler168458
Fayette167126
Cherokee160030
Henry152721
Monroe145017
Randolph138835
Washington137026
Clay126145
Crenshaw118644
Lamar117519
Cleburne117223
Macon114335
Lowndes109535
Wilcox102621
Bullock98728
Perry96919
Conecuh94220
Sumter88826
Greene75723
Coosa60515
Choctaw51224
Out of AL00
Unassigned00
Tupelo
Partly Cloudy
37° wxIcon
Hi: 55° Lo: 35°
Feels Like: 33°
Columbus
Clear
35° wxIcon
Hi: 58° Lo: 32°
Feels Like: 31°
Oxford
Partly Cloudy
28° wxIcon
Hi: 52° Lo: 30°
Feels Like: 28°
Starkville
Clear
34° wxIcon
Hi: 57° Lo: 30°
Feels Like: 34°
WTVA Radar
WTVA Temperatures
WTVA Severe Weather