The Humbling Of Jimmy Lai

Jimmy Lai is used to taking long odds and coming out on top. Beginning with a single garment factory in 1975, the Hong Kong entrepreneur then created Giordano, a Gap-like retailer of casual clothes that is now one of Asia's top brands. Later, he challenged Hong Kong's press lords by launching a flashy weekly magazine, Next, and a muckraking newspaper, Apple Daily. They quickly became two of Hong Kong's most popular publications. And unlike other Hong Kong tycoons who kowtow to Beijing, Lai publicly savages Chinese leaders. On one occasion, he attacked former Premier Li Peng as a "son of a turtle egg," the Chinese equivalent of an S.O.B. In spite of a heavy-handed counterattack from the mainland, Lai emerged richer than ever.

So it's no wonder that Lai oozed bravado last year when he unveiled adMart, a direct-marketing business that sells everything from Coke to computers by Internet, telephone, and fax. Sure, he was taking on Hong Kong's retail powerhouses, a duopoly of billionaire Li Ka-shing's Hutchison Whampoa (HUWHY) and the colonial British conglomerate Jardine Matheson Holdings (JARLY). Other retailers hadn't been able to challenge the entrenched giants, largely because setting up brick and mortar stores was simply too expensive given Hong Kong's skyrocketing real-estate costs. Lai figured that a virtual store would solve the problem. Lai boasted that adMart would smash the status quo and bring price relief to local consumers.