The Origin of E-Commerce

Written by Peter Li-Chang Kuo

I—Li-Chang Kuo (aka Peter Kuo) — founded the "Cheng Kuang Metal Works" in 1966 at the age of 13, after my father (A-Kun) was imprisoned, leaving me responsible for supporting a family of nine. I took on the extremely demanding requirements of Avnet Taiwan Ltd., outperforming competitors from the United States, Japan, and Germany, and helped secure NASA’s PTH orders. By the age of 14, I was nicknamed the “Dr. Blacksmith,” becoming a key component supplier in the "Kaohsiung Export Processing Zone" (KEPZ).

Fig 1: The 14-year-old Dr. Blacksmith and Products

In 1974, when Chiang Ching-Kuo visited my company, Cheng Kuang Precision Industry Co., Ltd., the combined facilities of my affiliated enterprises had already expanded to over 3 hectares. Owing to our achievements in automated precision manufacturing, he referred to me as the “Father of Taiwan’s Precision Industry”—I was only 21 years old at the time.

Fig 2: At 21, named the Father of Taiwan’s Precision Industry

Later, Chiang presented me with the inscription “Utilize for the Benefit of Society,” encouraging me to assist the government in promoting “Citizen Diplomacy.” I subsequently helped Tainan Mayor Chang Li-Tang establish a sister-city relationship with San Jose. In 1975, Mayor Janet G. Hayes led a delegation to Tainan, which included several engineers from IBM. Along the banks of the Yanshui River, at Cheng Kuang Company, we sketched the future form of the “Personal Computer” (PC). Using our expertise in deep-drawing techniques, I produced several connectors as presents for them.

Fig 3: Cradle of Future Technology—Cheng Kuang Precision

Amid the oil shocks of the 1970s, I collaborated with an American named "Dieska" to develop AV Connector and various Antenna Terminals. Ultimately, we decided to pursue the development of “Satellite Receiver” (Mr. Dieska and his wife welcomed their daughter Annie into the world in Kaohsiung). On the very day diplomatic relations were severed between President Jimmy Carter and Chiang Ching-Kuo, I flew to the United States to realize the development of “Satellite Receivers and PC.”

Fig 4: Peter Kuo and Annie Dieska

To extend Cheng Kuang’s reach into the United States, I established the "Blackstone BSC Angel Fund" in New York on March 13, 1979. From New York to Silicon Valley and Seattle, I supported entrepreneurs in realizing their dreams.

Unexpectedly, my father and my mother forced me to return to Tainan to marry a complete stranger, "Linda Din." We were married on February 21, 1980. On the night of May 4, they incited my younger brother, who was still under 18, to attempt to assassinate me with a three-foot blade. Linda’s left hand was slashed, bleeding profusely. This violent coup for property seizure came to be known as the “New Xuanwu Gate Incident,” and it was not an isolated occurrence.

After leaving Tainan empty-handed, Linda noticed a Taipei company recruiting an English-speaking “Specialist” through a newspaper advertisement. In November 1982, we moved to Taipei. The company was known for a famous product —"Barbie Dolls" — manufactured by Mattel Inc. in Taiwan, commonly referred to as MLT (Mattel Ltd. Taiwan).

My first task at MLT was to resolve, within five minutes, a problem with the “See & Say” toy that had persisted for over a month. “See & Say” was one of the creations of Ruth Handler, a pioneer of talking toys.

Soon after, I spent just ten seconds sketching a “Two-piece Leg Armature” to address the critical defect of Barbie’s legs breaking, and to replace the highly inhumane assembly process of the original "three-piece armature," which had caused injuries and deformities among female workers' fingers. It was then that I realized the professional managers at MLT had hired me not to fix Barbie—but to “prove that Barbie was beyond saving.”

I shared this with Linda, who said: “Barbie is so famous. Since you have time now, if you can save her, it would be an act of merit — and also prove that traditional industries can be transformed through technology.” This set me against three expatriate managers — collectively referred to as “ABP”—and placed me in a constant environment of conflict. I spent half a day drafting a comprehensive improvement plan for Barbie, from head to toe, only to have it repeatedly rejected.

By 1984, even Mattel’s lifeline product— "He-Man" —was facing production issues, and rumors spread that MLT would shut down. The issue centered on “tampo printing machines” used for producing the chest "Drum." I had initially sourced a local manufacturer in Luzhou, quoting NT$200,000 per unit. However, ABP instead purchased two machines from Hong Kong at ten times the cost. After more than six months, the machines failed upon startup, bringing the entire production line to a halt. Experts from around the world were brought in, but the machines remained beyond repair.

Fig 5: Mattel’s Lifeline Product— "He-Man"

When I proposed, “Let me handle it,” ABP glared at me and snapped, “Don’t interfere!”

Eventually, confirmation came that MLT would indeed shut down, and ABP displayed strange smiles. At home, I told Linda, who was shocked: “If the factory closes, thousands will lose their jobs!” She urged me to try once more. During her morning prayers, she had envisioned Ruth Handler in tears — helpless and distressed. She believed that if I could extend MLT’s life, I would be saving thousands of families.

I therefore submitted a final one-page report stating simply: “The He-Man drum tampo printors can be fixed. The real question is whether headquarters chooses ‘to be or not to be.’”

ABP summoned me and berated me—because the reply from headquarters read: “to be.” Pointing at me, they said: “You have one day to fix them!”

They had already spent the equivalent of ten thousand man-hours without success — and now ordered me to fix everything in a single day. Young and defiant, I replied without hesitation: “One day it is. Who’s afraid?”

The date was set: “May 20, 1984” — a national holiday marking Chiang Ching-Kuo’s presidential inauguration. That morning, one of my legs was inexplicably in such pain that I could barely move. Linda supported me to a taxi, and I rushed to the Taishan Meineng Plant (MLT).

By 5 p.m., both Hong Kong machines were started running. I observed their automatic operation until 10 p.m. before returning home. Early the next morning, I arrived MLT before 7 a.m. The guard’s salute felt different. As I entered the workshop, I saw a crowd gathered around machines that had transformed overnight from scrap into fully functioning systems. As they turned toward me, applause erupted — voices calling out “Doctor! Hero!” filled the air.

Fig 6: May 20, 1984 — Reviving He-Man in a Single Day

This story was recorded in my 2005 book “Open the Way for Next Generation” (pp. 66–91).

Fig 7: book “Open the Way for Next Generation”

After that, ABP no longer dared to obstruct my improvements to Barbie’s production process. I gifted Mattel Inc. the most critical capabilities —"Electroforming of Head Molds and Mask Fabricating." While ABP had declared this would cost several million U.S. dollars, I completed the entire section within one month without spending a single dollar of Mattel’s official budget. I also trained ten master technicians in mask engraving. In addition, I introduced the new “Two-piece Leg Armature” process and even donated the sliding-base machining equipment originally used for my AV connector production.

Fig 8: AV Connector machine repurposed for new leg production

With these contributions, the defect rate dropped to near zero, and the production cost of Barbie Dolls was reduced to just one dollar. Unfortunately, news soon arrived that Mattel had decided to shut down MLT and relocate to Malaysia—chasing a production cost of “$0.35.” Most absurdly, they told me: “Taiwan’s per capita income has already reached $3,000—there is no longer any investment value here.”

In 1985, I developed a “Talking Barbie” prototype to ABP in hopes of persuading Mattel to stay in Taiwan. I believed I could help Mattel transform and upgrade — Barbie could potentially become the world’s first “AI doll,” with projected annual revenues reaching the "Trillion-dollar level." Yet their response was layoffs beginning in 1985, followed by the complete closure of MLT in 1986. In short, I only managed to buy more than a year of time for 5,000 employees — while Taiwan’s advanced technologies were transferred abroad, eventually turning into competitors against Taiwan itself.

Ruth Handler once called me the “Gadget Master,” while Linda Din was respectfully addressed as “Madam Master.” Meanwhile, unemployed workers searched for jobs for months without success; those who turned to driving taxis were robbed. It was then that Linda stepped out of the kitchen and founded the world’s first “Social Enterprise,” SEL. She declared her intention to invent a “Cashless System” that would allow taxi drivers to earn a safe living without carrying cash.

With only a second-hand typewriter, Linda sold electronic components worldwide — including to Turkey’s Profilo Telra and “India’s Ahuja Radio” — eventually becoming close friends with Ambassador Bhatia.

Fig 9: Visiting the Indian Ambassador’s residence

Soon, Linda created 100 jobs — but she also saw that 4,900 more people still needed work. Recognizing unemployment as a "structural social problem," she devoted herself even more diligently to daily spiritual practice.

One day in 1986, after meditation, I saw her suddenly lean over a desk — drawing, cutting, and assembling a diagram. It became the first “TES Schematic.”

Fig 10: Linda Din creates the "TES Schematic"

She said: “This is Electronics + Commerce.” She emphasized that this new tech-economic system was a comprehensive economic solution, and named it “TES” (The eStore System). She asked me to imagine: a taxi as an “eStore,” operating through cashless transactions; using an “Interphone” (like an intercom) and satellite receivers to transmit transaction data to a control center; and when physical goods were involved, suppliers would be notified for replenishment via logistics systems. She stressed that this would enable "Taiwan to become a global originator of high-value orders" and a leader in the technology-driven economic world.

Looking at terms like “VAM, eStore, TSCM, B-B, B-C, Contactless, TranSmart” — a long list of unfamiliar concepts — my head spun. I was already known as the “Dr. Blacksmith,” the “Father of Taiwan’s Precision Industry,” and the “Gadget Master.” I pleaded with Linda: “If even I can’t understand this, don’t take it out and embarrass us!”

Yet she went out and held presentations everywhere. She was relentless in her search, but could not find a single expert or partner in the world who understood the TES schematic. Eventually, she placed the responsibility for this “Heaven-sent Mission to Save Society” on my shoulders.

Late one quiet night, as I deciphered the "TES Schematic" and transformed it into a “System Architecture,” I suddenly saw it clearly: two intersecting channels integrating the physical and virtual worlds. The substantial channel could create seamless links from production (origin) to market, generating new jobs; the virtual channel could transcend time and space, reaching across the globe. Using "Advanced Engineering Mathematics," I calculated its economic value — and the result was astronomical: approximately "36% of GDP."

Fig 11: TES System Architecture

I wrote the words “Heaven’s Secret” on the paper and began implementing what Linda called “Social Responsibility Investment” (SRI), aiming to transform Taiwan’s island-based economic destiny into a central force in the maritime century.

As my “BSC Angel Fund” continued to grow and appreciate, Linda had the resources to complete one invention after another under her social responsibility investment. Eventually, she was invited to speak at APEC 1998 Kuala Lumpur. Overcoming numerous obstacles, she presented "TES" from the podium, contributing to the formulation of what became known as the “E-Commerce Constitution.” She was later honored as the “Mother of E-Commerce.” Her vision helped mitigate the 1997 Asian Financial Crisis and the 2008 Global Financial Crisis, and during the COVID-19 pandemic enabled "1.5 billion people" to earn income from home, with annual cashless transactions reaching "USD 36 trillion" — fully validating her early predictions.

Fig 12: Linda Din at APEC 1998 proposing the “E-Commerce”

Linda Din (Ding Lin-Hong), starting from half-days in 1986 sketching the "TES Schematic Diagram," has tirelessly pursued social responsibility investment, evolving it into a trillion-scale economic powerhouse, thereby proving its irreplaceable value of "Universal Concern."

Peter Li-Chang Kuo, the author created Taiwan's Precision Industry in his early years. Peter was a representative of the APEC CEO Summit and an expert in the third sector. He advocated "anti-corruption (AC)/cashless/e-commerce (E-Com)/ICT/IPR/IIA-TES / Micro-Business (MB)…and etc." to win the international bills and regulations.