BEIJING (AP) – Before he became a billionaire in e-commerce, Richard Liu was a failure.
As a student, Liu started a restaurant in Beijing but went bankrupt. He blames employees who he said stole from him, and when he took a second stab at business by opening an electronics store in 1998, Liu insisted on honesty. After seeing other shops overcharge customers and pass off counterfeit goods, he says he sold only genuine merchandise.
“I felt this was an opportunity to establish a new kind of business,” said Liu in an interview. He said his shop became the first in northwestern Beijing’s Zhongguancun neighborhood, a center for technology companies, to use price tags to avoid haggling with buyers.
After Liu went online in 2003 and expanded into selling home appliances, clothing and other goods, that focus on reliability helped his company, JD.com, grow into China’s biggest Internet-based direct retailer. It is a powerful selling point for Chinese consumers who have endured repeated scandals over fake and sometimes deadly milk, medicines and other products.
In contrast to China’s dominant e-commerce brand, Alibaba Group, which provides platforms for companies and consumers to sell directly to each other and leaves the handling of goods to outside delivery companies, JD.com operates like a department store, buying goods from suppliers and re-selling them to shoppers. The Beijing-based company controls the flow of merchandise from the supplier to the customer’s door. It operates its own distribution network of more than 100 warehouses and a fleet of thousands of bright red delivery vehicles emblazoned with its logo of a grinning dog named Joy.