On June 18, 1998, Liu Qiangdong founded JD.com in Zhongguancun. 6.18 is JD.com's birthday. 6.18 has since become a powerful tool for e-commerce platforms to exploit consumers.

Back then, 24-year-old Liu Qiangdong took the money he had saved from two years of work and rented a 4-square-meter stall in Zhongguancun, Beijing, to start his own business. His main activities were pyramid schemes and selling pirated CDs.

That's right, Liu Qiangdong started out doing pyramid schemes.

In the 1990s, many people believed that pyramid schemes were a novel business model, attracting a large number of today's star entrepreneurs, including internet celebrity CEO Liu Qiangdong, entrepreneurial star Luo Yonghao, and internet mogul Shi Yuzhu. They were all deceived by pyramid schemes, some even becoming deeply entrenched and unable to extricate themselves.

Luo Yonghao, who didn't even attend university, started navigating the social world early on. It's rumored that he worked as a "lecturer" in a pyramid scheme for over six months, essentially brainwashing members. "Giving lectures on pyramid schemes is actually similar to Lao Yu's (Yu Minhong's) approach—both are about finding hope in despair," Luo Yonghao claims, adding that he has particular insight into this.

Shi Yuzhu had also considered pyramid schemes, even expressing "great anticipation for the pyramid scheme model." He once tried to promote a "water-free" lipstick he encountered in the United States in China through a pyramid scheme, but after the government introduced policies to ban pyramid schemes, his pyramid scheme department, which had only been established for six months, completely shut down, and the pyramid scheme plan failed.

Another heavyweight figure is even more remarkable. Not only did he enter the world of pyramid schemes, but he also thrived in it. That person is Liu Qiangdong. Current reports about Liu Qiangdong's entrepreneurial journey are all about a young underdog's rise to a multi-millionaire, but his involvement in pyramid schemes is little known. During his senior year of college, Liu Qiangdong failed in his restaurant business. Coming from a poor background and burdened with hundreds of thousands of yuan in debt, his desire for money was exceptionally strong.

In July 1996, after graduating from university, Liu Qiangdong joined Shenzhen Ribaolai Magnetic Health Products Co., Ltd., a company that can be considered the "originator of pyramid schemes" in mainland China.

This company's entry requirement for joining the pyramid scheme is that you must purchase a Ribaolai magnetic mattress worth only 3,000 yuan for 15,000 yuan. Then, the upline recruits downlines, the upline receives commissions, and the downlines recruit even more downlines…

At the time, the main force behind pyramid schemes was college students, who were attracted by the dream of getting rich. Many of them borrowed money at high interest rates to buy mattresses. Moreover, Ribao Laifu developed rapidly at that time, and within just one year, it had multiple branches, with more than 30,000 distributors and a monthly turnover of more than 1 billion yuan.

As a result, Liu Qiangdong and his ilk in management naturally lived a comfortable life. Not only did they receive high salaries, but the company also provided them with computers and mobile phones, several hundred yuan in allowances for business trips, and five-star hotel accommodations.

Then, unsurprisingly, Dongzi ran into trouble. In 1997, the government began cracking down on pyramid schemes, and Ribaolaifu's performance began to decline, quickly becoming unsustainable. Liu Qiangdong thus experienced his first job failure. In the latter half of 1997, Liu Qiangdong was unemployed in his hometown, feeling depressed for a long time. Perhaps Liu Qiangdong had also been lured by pyramid schemes; who doesn't like a high salary? It wasn't until 1998 that Liu Qiangdong truly woke up and returned to Zhongguancun to start his own business.

At that time, JD.com was called "JD Multimedia". Its main business was to provide hardware and systems for video editing in wedding photography studios. Later, as the company's business expanded, JD.com began to sell CD products, CD burners and video recorders.

Liu Qiangdong's counter was called "Jingdong Multimedia," which was the predecessor of "JD.com."

That year, Google was just born across the ocean; NetEase was just one year old; Sohu and Tencent were established; and Alibaba and Baidu were still nowhere to be seen.

In June 2001, JD.com became the most influential distributor in the field of optical and magnetic products, with sales volume and influence ranking first in the industry.

When Liu Qiangdong opened his stall in Zhongguancun Market, he insisted on selling genuine products, and he issued official invoices for every purchase. At that time, counterfeiting CDs was very simple; all it took was using blank CDs, screen printing a logo, and making packaging exactly like the genuine product. The profit margin was dozens of times that of the genuine product. However, Liu Qiangdong felt that he was doing a long-term business, so he always insisted on selling genuine products.

In addition, Liu Qiangdong also liked to engage in "price wars." When he was an offline distributor of CD burners, JD.com would often change its price every morning and afternoon, crippling other distributors and eventually making him the exclusive distributor.

JD.com's turning point came in 2003.

That year, SARS raged, and the once bustling Zhongguancun became deserted. Liu Qiangdong's shops saw a sharp drop in customer traffic, with almost no customers.

JD.com lost 8 million yuan in less than a month. At that time, the company only had 20 to 30 million yuan in cash on hand. It was going to go under in another two or three months. This was a fatal blow to Liu Qiangdong.

The saying goes, "Misfortune may be a blessing in disguise, and a blessing may be a misfortune in disguise." SARS also made JD.com a success.

With no customers visiting physical stores, JD Multimedia employees started posting online to promote CDs. Initially, JD employees used paper and pen to record orders, had customers make payments, and then sent the CDs out through the postal system.

Liu Qiangdong developed a great passion for the internet, spending day and night online, even replying to posts at four or five in the morning.

When we first decided to go into e-commerce, not everyone supported us.

In 2003, JD.com already had sales of 80 to 90 million yuan, making it far from a small company. Transitioning to e-commerce would have been very risky. Moreover, at that time, Suning and Gome were busy expanding rapidly across the country, opening stores at breakneck speed.

However, Liu Qiangdong was very decisive and acted unilaterally, deciding to withdraw from offline operations and focus all his efforts on developing online e-commerce. As it turned out, Liu Qiangdong made the right choice.

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