Richard Liu | E-commerce tycoon part of celebrity tech elite

The e-commerce billionaire who was arrested and released by Minneapolis police is a prominent member of a Chinese tech elite who enjoy the glamor of movie stars in their homeland.

Admirers know Richard Liu’s story well: The son of peasants built a Beijing electronics shop into JD.com, China’s biggest online direct retailer, selling everything from clothes to toys to fresh vegetables. He appealed to customers by promising genuine products in a market buffeted by scandals over fake and sometimes deadly milk and other goods.

Like a pop star keeping fans up to date, the 45-year-old Liu shares some details of his life on social media, including his 2015 marriage to a woman 19 years his junior.

That celebrity meant Liu immediately attracted attention when news broke that police in Minneapolis arrested him Friday and released him a day later.

JD.com said he was falsely accused and police found no misconduct. The company said Liu was back in Beijing on Monday. A police report said the charge stemmed from a felony rape accusation but gave no details.

Liu, known in Chinese as Liu Qiangdong, was the top search topic online Monday, according to Baidu.com, the country’s most popular search engine. By Tuesday, he had dropped to No. 35 for the day but still was the most popular topic of the week.

Liu, with a fortune of USD7.5 billion, is part of a generation of entrepreneurs who have created China’s internet, e-commerce, mobile phone and other technology industries since the late 1990s. They include rival Jack Ma of e-commerce outlet Alibaba Group and Ma Huateng of Tencent, a games and social media giant.

Admirers of their success make their memoirs and books on management best-sellers.

Liu has said his business plan was based on bitter experience. He started a restaurant as a university student but said it failed because employees stole from him.

In his second try, Liu opened an electronics shop in Beijing’s university district in 1998. He said he was the neighborhood’s first merchant to use price tags and skip haggling over prices. He went online in 2003.

“I felt this was an opportunity to establish a new kind of business,” he told The Associated Press in a 2015 interview.

JD.com purchases directly from suppliers and delivers using a fleet of thousands of bright red electric delivery vans emblazoned with its logo, a cartoon dog called Joy. Its workforce of 158,000 includes thousands of employees who monitor suppliers and product quality.

JD.com operates 486 warehouses and says its drivers can reach 99 percent of China’s population. It is experimenting with deliveries by drone to the most remote rural customers.

With its own online payments system, JD.com is the equivalent of Amazon.com, Federal Express and Visa combined.

Alibaba, China’s biggest e-commerce company by total sales volume, acts more like a shopping mall, providing online platforms to merchants who deal directly with customers. But Alibaba also has begun to imitate JD.com by investing in product-handling operations and setting up anti-piracy and customer service units.

JD.com’s 2014 initial public stock offering in New York was the biggest to that point by a Chinese company, though it was surpassed by Alibaba later that year.

The high cost of doing everything itself means JD has struggled to make a profit despite explosive sales growth.

It reported a 2.2 billion yuan ($334 million) loss for the quarter ending in June while revenue rose 31 percent over a year earlier to 122.3 billion yuan ($18.5 billion).

Despite that, JD has attracted new investors and partners. Google agreed in June to invest $550 million in the company. Tencent owns a 20 percent stake and Walmart almost 10 percent after merging its struggling China online operation into JD.com.

While other companies embrace its strategy, JD.com is branching out in new directions including creating technology the ruling Communist Party is eager to promote.

It opened an experimental automated supermarket in Beijing without human cashiers and robot warehouses with few employees. AP