Richard Liu, a quiet but determined manager

When you think about e-commerce in China, the first names that come to mind are Alibaba and its founder Jack Ma. I have dedicated a video to the latter that I invite you to watch.

However, the daily life of Chinese people who do their shopping on their mobile is much more often punctuated by another player unknown in the West: JD.com.

The founder of this company, Richard Liu, may be less exuberant than Jack Ma, but his background is no less exceptional. Born into a very modest family, a brilliant student, he managed to build in 20 years a giant weighing 32 billion dollars on the stock market and employing 300,000 people.

If one were to look for a common thread in Richard Liu’s career, it would be an incredible ability to turn the most catastrophic situations into opportunities for success. Richard Liu is a kind of business alchemist able to turn lead into gold.

This is what I’m going to tell you in this video while noting a few lessons that can inspire each of us.

Richard Liu’s childhood and Lesson #1: Make the most of what you have

Richard Liu (Mandarin Chinese: Liu Qiangdong) was born on February 14, 1974, near the city of Suqian in the Jiangsu province. His grandparents were wealthy traders in the early 20th century, but his luck changed and when he was born, his parents were simple rice farmers.

While his parents were at work, his maternal grandmother took care of little Richard. She taught him to make the most of what he was given. Richard would help her prepare meals with what they could afford, usually simple sweet potato or corn dishes.

However, on very special occasions, Richard would accompany his grandmother to the nearest farmer’s cooperative, where she would get the fattest piece of pork possible. This way, when the meat was cooked, there was plenty of fat left over that could be used to cook other foods throughout the year.

Lesson #1: Make the most of what you have.

Richard Liu’s Early Training and Lesson #2: Know when to retrain

When Liu was old enough to go to university in 1992, his excellent grades in the Gaokao (the high school graduation exam) allowed him to enter the prestigious People’s University in Beijing, where he studied sociology.

But by the turn of the 1990s, China had entered a period of economic crisis and stagnation, making opportunities in this field scarce. On the other hand, as the country continued to modernize, the need for I.T. skills was enormous and qualified people were hard to find.

Liu decided to learn computer programming on his own. Thanks to this, he was able to save enough money to buy his own computer and cell phone, both very expensive at the time.

Lesson #2: Know when to retrain.

First time entrepreneurship and Lesson #3: Learn from your mistakes and don’t get discouraged

With the savings he accumulated from his computer programming business, Liu opened a restaurant at the entrance of his university. Unfortunately, his lack of management experience combined with a form of naivety caused him to put blind trust in his employees, who quickly took advantage of him.

Not only did they falsify expense reports, but they even dipped directly into the cash register. The restaurant went bankrupt within a year.

Despite this, Liu didn’t keep any bitterness about the experience but only kept a taste for entrepreneurship and a good lesson. This will be very useful to him a few years later to create his e-commerce company.

Lesson #3: Learn from your mistakes and don’t get discouraged.

Business training and Lesson #4: Don’t pit education against starting a business

After graduating from People’s University in 1996, Liu enrolled in an EMBA program at the China Europe International Business School so that he could continue his studies while pursuing his business ventures.

What is remarkable here is that Richard Liu was able to balance his education with learning to be an entrepreneur. Even though there were no openings in the field he had chosen to study in university, he went ahead with his studies and then completed them with another training more directly related to his professional project.

In this, he is opposed to many school dropouts often put forward, such as Steve Jobs or Mark Zuckerberg, who abandoned their studies along the way.

Lesson #4: Don’t pit education against starting a business.

Richard Liu’s experience as a corporate executive and Lesson #5: Do not oppose salaried employment and business creation

To put his new knowledge into practice and gain management experience, Liu went to work for Japan Life, a natural health supplement giant, where he worked his way up to IT manager.

By being an employee himself and then working in a management position at a large company, Liu was able to learn good business management practices that would serve him well later when he was his own boss again.

Lesson #5: Do not oppose salaried employment and business creation.

Founding JingDong and Lesson #6: Staying true to your principles in serving the consumer is a key to success

In June 1998, Liu embarked on a new entrepreneurial venture by setting up a store, Jing Dong, in a tiny booth in Beijing’s computer district. For the record, he created the name of his business from his first name Qiangdong and that of his then-girlfriend Xiao Jing.

Unlike the many shops in the area that often sold counterfeit products at negotiable prices, Liu refused to haggle but guaranteed reliable and authentic products in return. By sticking to this policy, Liu managed to grow his business rapidly within a few years.

In just five years, Jing Dong became a full-fledged storefront before growing into a chain of 12 stores in Beijing, Shanghai, and Shenyang, with annual sales of about 9 million dollars.

Lesson #6: Staying true to your principles in serving the consumer is a key to success.

JingDong moves to e-commerce and Lesson #7: With the right attitude, you can sometimes turn what at first seems like a disaster into an extraordinary opportunity

Jing Dong could have gone on its merry way and been a chain store like so many others, but history had other plans.

In 2003, the SARS health crisis broke out, forcing many companies, including Jing Dong, to stop welcoming customers. Rather than seeing this as a hindrance, Liu took the opportunity to develop his business in a new way by starting to offer his products for sale on online forums.

This initiative was so successful that Liu decided to keep a dedicated online sales employee even after Jing Dong was allowed to reopen its stores. In January 2004, Liu officially launched an online version of Jing Dong, and after a year, he decided that Jing Dong would now sell its products only on the internet.

Lesson #7: With the right attitude, you can sometimes turn what at first seems like a disaster into an extraordinary opportunity.

JD.com’s beginnings and Lesson #8: Get your hands dirty and never lose your sense of reality, nor contact with the field

Taking advantage of his self-training and computer experience which he had acquired a few years earlier, Liu wrote the code for the first version of jingdong.com himself. Sleeping in his office, answering all the questions new online customers asked him, he even hand-delivered all the orders for a while.

This relentless involvement allowed him to learn a great deal about the new type of customer that online shoppers were, at a time when modern targeting and audience measurement technologies did not yet exist.

Even today, as the head of a multi-billion dollar company, Liu makes it a point to work one day a year as a delivery boy so that he never falls into the trap of being disconnected from the market or from his employees’ daily lives.

Lesson #8: Get your hands dirty and never lose your sense of reality, nor contact with the field.

JD.com becomes a champion of logistics and Lesson #9: Take into account the specificities of your local market to best serve your customers, get ahead and block new entrants

With the rise of e-commerce in China and the presence of strong competitors such as Alibaba, it was crucial for JD.com (the new name of the company and for the Jing Dong website) to continuously differentiate themselves and stay ahead of the game in terms of service quality.

In this context, Liu realized that there was no logistics company in China that could deliver to every corner of the country. While China’s population was still largely rural, people in more remote areas could not enjoy the benefits of e-commerce and were forced to travel to the big cities to buy electronic devices.

That’s why Liu insisted that JD build its own domestic logistics system. By the end of 2014, JD had deployed 3,210 delivery and pickup points in 1,862 Chinese counties — nearly two-thirds of all counties in the country.

This effort has not only significantly increased JD’s number of potential customers but also enabled it to innovate in the logistics field, gaining a lead that its competitors would find hard to catch up with.

Lesson #9: Take into account the specificities of your local market to best serve your customers, get ahead and block new entrants.

The future of JD.com and Lesson #10: Don’t rest on your laurels and be able to constantly reinvent yourself

Liu’s foresight and efforts in cutting-edge innovations in areas as diverse as logistics, artificial intelligence, the internet of things, and robotics have helped JD.com consolidate its position as China’s leading e-commerce company.

But Liu doesn’t want to stop there. On the occasion of its 17th anniversary in 2020, JD.com announced an update of its mission and positioning. JD.com is now presenting itself not just as an e-tailer, but as a supply chain services and technology company.

In other words, just as Alibaba was able to leverage its data center management skills to become a cloud leader, JD aims to leverage its logistics expertise for more than just e-commerce.

Lesson #10: Don’t rest on your laurels and constantly reinvent yourself.

Key takeaways

Here is a short summary of the 10 key lessons we can learn from Richard Liu’s journey:

1. Make the most of what you have
2. Know when to retrain
3. Learn from your mistakes and don’t get discouraged
4. Don’t pit education against starting a business
5. Do not oppose salaried employment and business creation
6. Staying true to your principles in serving the consumer is a key to success
7. With the right attitude, you can sometimes turn what at first seems like a disaster into an extraordinary opportunity
8. Get your hands dirty and never lose your sense of reality, nor contact with the field
9. Take into account the specificities of your local market to best serve your customers, get ahead and block new entrants
10. Don’t rest on your laurels and constantly reinvent yourself

Conclusion

How will JD.com continue to surprise its customers in the markets? Only time will tell. What is certain is that it will be exciting to continue to follow Richard Liu’s journey in the coming years.

From your side, what do you remember about Richard Liu’s career that is particularly remarkable? Do you think he will be as universally recognized as Jack Ma tomorrow?

Don’t hesitate to tell me about your predictions in the comments, and if you like this video, don’t forget to subscribe and leave a thumbs up. It’s a great encouragement for me.

See you soon on this channel!