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longliqi reappeared in the public eye.

but it was because of the troubles that happened one after another.

author: wang zhening

"the clouds from heaven, the rain from the south of the yangtze river, the love in the west, the hazy longing in the east. longliqi is a beautiful legend, a legend of the world..."

·screenshot of the longliqi commercial.

more than a decade ago, longliqi, once known as the "pride of domestic products", repeatedly broadcast advertisements comparable to blockbuster movies during cctv's prime time, and its reputation spread across the country.

more than a decade later, longliqi reappeared in the public eye, but it was due to a series of troubles: the dealer was suspected of pyramid selling, the founder was arrested for suspected illegal fundraising, and was fined 600 million yuan...

·longrich company building.

"chinese snake king"

before being frequently involved in controversial storms, longliqi was once a glorious company.

the founder of longliqi is xu zhiwei. he was born in jieshan village, changshu, jiangsu province in 1953. he left school at the age of 13 and returned home to become a farmer, earning nearly 60 yuan a year in the production team.

"when school resumed in 1969, it was not my turn to go to school because of my family's poor background. my father was an educated man and hoped that we could solve our own living problems, so he suggested that we learn a craft," xu zhiwei recalled in an interview.

·xu zhiwei.

after learning from a master, he became a carpenter and worked for 9 years. at that time, the daily wage for carpenters was 1.5 yuan. over time, xu zhiwei became a millionaire.

jieshan village is a famous snake catching village. once, xu zhiwei caught a big snake and sold the snake gall to a pharmacy, earning nearly 100 yuan. this made xu zhiwei realize that snake catching is a big business.

so xu zhiwei started to specialize in catching snakes. one year later, he organized a snake catching team of dozens of people and established a complete industrial chain of catching, collecting and processing snakes.

in 1986, xu zhiwei, who was less than 35 years old, founded changshu snake industry company, which was also the predecessor of longliqi group.

in order to expand his business, he not only set up snake collection points in shenzhen, chengdu and other places, but also hired relevant technical personnel, established a leather factory, and began to sell snakeskin products such as snakeskin bags, snake belts and snakeskin wallets.

in the early 1990s, japanese businessmen were keen on buying snake meat. after investigation, xu zhiwei found that the purchased snake meat was processed into snake powder or oral liquid, which was sold as health products in the local area, and the profit was many times that of selling snake meat.

xu zhiwei seized the business opportunity and established suzhou oriental snake garden co., ltd. in 1992 in a joint venture with foreign businessmen. he began to make snake powder health products and, while selling snake powder capsules, also gave away snake oil honey and snake venom enzyme facial cleansers.

·snake powder once sold by longliqi.

since then, xu zhiwei has paid much attention to marketing. he hired 20 sales girls to promote the brand on huaihai road in shanghai, and distributed more than 1 million flyers in total.

as the free facial cleanser and other products received good market response, xu zhiwei switched to daily chemical products again. the brand name "longrich" came into being, which means "long and noble".

in 1996, changshu snake industry company was renamed jiangsu longliqi group.

xu zhiwei made improvements based on the previous gifts and launched the longliqi snake gallbladder facial cleanser and pearl snake oil honey. he also successively developed popular products such as longliqi snake oil ointment and longliqi hand cream.

with these well-known products, longliqi won the first place in the ranking of the top ten leading companies in the domestic cosmetics industry in 2002 with sales of 1 billion yuan.

the following year, longliqi's sales revenue reached 2.5 billion yuan, and xu zhiwei became the veritable "chinese snake king".

hidden dangers amidst glory

in order to expand the brand, xu zhiwei turned his attention to television advertising. at that time, some private brands had increased their profits several times by advertising on cctv. xu zhiwei decided to take over the prime-time advertising space on cctv.

in the "2004 cctv prime time advertising tender", longliqi successfully bid at a high price of 140 million yuan, and the following year it successfully bid at a high price of 168 million yuan, winning the title of "bidding king" among domestic daily chemical brands.

in order to create an advertisement that would impress people, longliqi spent a lot of money and time, and invited many popular stars.

·advertising picture of longrich.

this made longliqi's fame soar: in the first quarter of 2004, longliqi's cash income increased by 100% compared with the same period in 2003, and the following year's sales increased from 3.8 billion to more than 5 billion.

after tasting the sweetness, xu zhiwei spent a lot of money again. in 2006, he won the exclusive naming rights of cctv national youth singer grand prix and the exclusive special naming rights of the prime-time tv series in the second half of the year for 56.06 million yuan and 93 million yuan respectively.

in 2008, longliqi's sales reached 7 billion yuan.

although the brand reaped a lot of advertising dividends, the huge costs made xu zhiwei feel uneasy: it was time to change the business model.

at this time, a model called direct selling came into his view. direct selling refers to a distribution method in which a direct selling company recruits direct sellers, who then sell products directly to end consumers outside of fixed business locations, eliminating the cost of middlemen.

xu zhiwei quickly introduced this model. in august 2008, longliqi obtained a direct sales license and reorganized the company into a large direct sales company. the original head office sales team was also transferred to form a new direct sales team.

·longliqi obtained a direct sales license.

according to reports, if you wanted to join the longliqi direct sales team at that time, you had to pay a membership fee of 26,000 yuan, and if you recruited two members, you could enjoy a reward of nearly 4,000 yuan. new members copied this model. this played a strong stimulating role, and for a time, many people flocked to the longliqi direct sales team.

in 2011, xu zhiwei held a grand annual meeting of the company in suzhou stadium, which can accommodate 6,000 people. he spent a lot of money to reward outstanding employees with mercedes-benz and bmw cars, and also took the core team to dubai for a seven-day, six-night luxury tour.

unexpectedly, this became the first step for longliqi to go astray.

after searching for longliqi direct sales online, global people reporters found that a large number of posts promoting direct sales were published between 2011 and 2016. many of the slogans were similar to "brainwashing" rhetoric.

a direct sales person who "recruits people" posted a message saying: "the money we pay is not an investment at all. why do i say that? our families also need personal care products, health products, etc. we just need to replace these products with longliqi products, and we can do it - spend the money we need to spend, buy the products we need to buy, register as a longliqi direct sales person, and earn money that we would not have earned otherwise..."

many netizens found out that they might have been cheated after spending money to join the direct sales team. a person who claimed to have worked at longliqi for many years said: "they deceive people under the guise of hard work and entrepreneurship, asking people to pay first, then luring people to the site in the name of inspection and training them for many days, which is actually brainwashing."

·longliqi’s direct sales training center.

wang yaoqian, a lawyer at yingke law firm in beijing, told global people that according to the "opinions of the supreme people's court, the supreme people's procuratorate and the ministry of public security on several issues concerning the application of law in handling criminal cases of organizing and leading mlm activities", "organizing and leading mlm activities" refers to the act of organizing and leading "mlm organizations with more than 30 mlm personnel and more than three levels of hierarchy". based on the specific behavior pattern, longliqi direct sellers may be suspected of organizing and leading mlm activities, illegally absorbing public deposits, or fundraising fraud.

in 2013, longliqi was repeatedly reported by cctv and the "product reliability report" of the state administration for market regulation for suspected illegal pyramid schemes, fraud, false propaganda, etc. in the same year, 22 longliqi dealers were imprisoned for "organizing and leading pyramid schemes", and the amount of pyramid schemes involved reached hundreds of millions.

·news reports of longliqi dealers being involved in pyramid schemes.

in response, longliqi made the following response: "this sales model is indeed illegal, but it is only the individual behavior of longliqi's distributor, the china international direct sales alliance, not the behavior of longliqi itself."

re-ignited controversy

seeing that the direct sales approach was not feasible, xu zhiwei began to think of new ways, and thus "juhao mall" was launched.

at that time, there were already successful online shopping malls such as tmall and jd.com. juhao mall took a different approach and started a membership system and financing.

the membership system is a "five-level, three-stage system". you pay 500 yuan to become a junior member, and spend 26,000 yuan to become a distinguished diamond card member.

not only that, longliqi also used listing to attract investors to buy original shares, promising to give away a small portion of shares after listing, but there was a requirement that they must purchase a membership first.

·the conditions for entry into juhao mall.

with the support of brand awareness, juhao mall received an investment of 16 million yuan from its original shareholders in 2019 alone.

after five rounds of financing, juhao mall was listed on the nasdaq in the united states in 2021. however, longliqi refused to cooperate with investors to realize their equity income, and reduced the value of investors' stocks to 1/40 of the original value.

this time, longliqi aroused public anger, and everyone called the police to protect their rights.

as a result, before the matter was settled, xu zhiwei set his sights on live streaming sales, wanting to get a piece of the pie, and even participated in live streaming in person.

·screenshot of xu zhiwei’s live broadcast.

soon, the live broadcast had problems again. after some consumers bought the longliqi bath soap liquid that claimed to "eliminate mites and relieve itching", they found that it did not achieve the effects described in the promotional slogan.

after verification, it was found that the slogan should be the efficacy that can only be claimed for products with the "xiao" mark, but it is not a product with the "xiao" mark, and it does not even indicate the cosmetics production license number.

in may 2022, the "product reliability report" publicly named and criticized xu zhiwei for bringing celebrities to release advertisements that were suspected of violating regulations.

in january of the following year, xu zhiwei was released on bail by suzhou police on suspicion of illegal fundraising, and he has not appeared since then. in february, a topic appeared on the hot search list - the old domestic company longliqi is deserted. in the same year, longliqi's equity was frozen 4 times for a total of 170 million yuan, and in june this year it was sentenced to execute 600 million yuan.

in response to the above situation, jiang han, a senior researcher at pangu think tank, told global people reporters: "longliqi group is currently facing serious financial difficulties or legal problems, resulting in its equity being frozen by the court or other relevant institutions. this shows that the company's capital liquidity may have problems and it is difficult to freely use the funds corresponding to these frozen shares. this may also affect the company's reputation and investor confidence, further exacerbating its operating difficulties."

so, what consequences will xu zhiwei face in the future?

according to the criminal procedure law of the people's republic of china, bail pending trial is a temporary measure that allows suspects or defendants to be temporarily released from custody and await further litigation procedures upon paying a deposit or providing a guarantor.

wang yaoqian said that because bail pending trial requires that the suspect "will not pose a social danger if bail pending trial is taken", if he is suspected of committing another intentional crime during this period, it means that the condition of "not being a social danger" is no longer met. if the court determines that illegal fundraising and pyramid selling constitute corresponding crimes, xu zhiwei will face multiple punishments.

longliqi, which was once a prosperous brand, has been declining in recent years. in jiang han's opinion, there may be several reasons: first, it failed to keep up with market changes and launch competitive new products. secondly, the company's strategy implementation was improper in the expansion of new channels such as direct sales and e-commerce, and it was even suspected of illegal and irregular activities, such as pyramid schemes and illegal fundraising, which seriously damaged the brand image and consumer trust. furthermore, longliqi relied too much on traditional marketing methods and failed to fully utilize the advantages of new media and internet marketing. finally, the company's management may have made mistakes in decision-making and failed to respond to market challenges and internal problems in a timely manner, causing the company to fall into trouble.

under the current situation, it will be extremely difficult for longliqi to make a comeback.