JD.com's senior management undergoes major changes

Author | Zhang Chao Editor | Zhang Xiaoling

JD.com has been in control for 20 years and has never really let go. Since Xu Lei's "dismissal" and Xu Ran's appointment as the new CEO of JD.com, JD.com has once again launched a series of high-level personnel changes involving core management personnel in JD LOGISTICS, JD.com Production and Development, JD HEALTH and other companies. However, most of them are adjustments to job positions and business content, and no personnel have been dispersed.

The speed and scope of this personnel change are unexpected, and it also happened after June 18, echoing Alibaba's personnel change.

In fact, since JD.com returned to the public eye at the end of last year, the entire JD.com system has undergone a series of huge changes at a visible speed.

Strategically, JD.com has regained its "low price" advantage, and has developed both POP (Platform Open Plan, that is, third-party merchants) and self-operated businesses. From an organizational perspective, a large number of personnel adjustments have been made from top to bottom. And standing at the 20-year node, JD.com has proposed the "35711" dream blueprint, with an ambitious revenue target of 3 trillion yuan.

Behind the all-round adjustment is the survival pressure that the entire industry is facing due to the peak of e-commerce scale. Whether it is JD.com or Alibaba, adjustments to business, organization, and personnel in today's e-commerce red sea are a way for them to self-renew and seek self-help.

Shock

On the morning of June 26, JD LOGISTICS announced that CEO Yu Rui resigned as executive director, chief executive officer and authorized representative due to personal health reasons, and Hu Wei, former CEO of JD.com Production and Development, will serve as JD LOGISTICS CEO.

Regarding the reason for Yu Rui's resignation, an internal source of JD.com revealed, "I heard that General Manager Yu has not been feeling well recently. The company certainly hopes that he can recover as soon as possible, and the specific time for his return depends on his physical recovery."

Official data shows that Yu Rui joined JD.com in January 2010 and has served as the director of the human resources department of the logistics department of JD.com, the general manager of the southwest region of the logistics department of JD.com, the general manager of the North China region of JD LOGISTICS, and the CEO of JD.com Intelligent Production and Development Co., Ltd. He has rich experience in logistics industry operation and management.

Since serving as JD LOGISTICS CEO in 2021, Yu Rui has made achievements in major projects such as epidemic prevention and supply guarantee, Spring Festival Gala, and Beijing Winter Olympics, and JD LOGISTICS also expressed its gratitude to him in the announcement. Interesting to note that the new CEO of JD Logistics, who replaces Yu Rui, is not an internal logistics professional, but rather the former CEO of JD.com's production and development group, Hu Wei.

JD.com Production and Development, a subsidiary of JD.com that provides infrastructure asset management and comprehensive services, mainly provides modern high-standard warehouses, integrated intelligent industrial parks, data centers, and other comprehensive solutions for the logistics industry.

From a business layout perspective, JD.com Production and Development and JD Logistics have a cross relationship and are indispensable players in the express logistics industry. However, JD.com Production and Development submitted a prospectus for listing this year, and such a company in a critical period of development has rarely seen changes in its core management.

JD Logistics' new CEO, Hu Wei

However, Hu Wei also grew up in the logistics system, is familiar with various aspects of logistics business, and has deep industry management experience. It is understood that Hu Wei joined JD.com in 2010 and has successively served as the head of JD.com's logistics department's human resources department, the head of JD.com's logistics department in the southwest region, the head of JD Logistics in the North China region, and the CEO of JD.com's intelligent production and development.

With Hu Wei's departure, the CEO position of JD.com Production and Development is also vacant, and the successor is Cao Dong, the former CFO of JD Health, who has been with JD.com for more than 11 years.

At the same time, Yan Xiaobing, the former head of JD.com International, who is well-known outside the company, has also returned to the forefront as the head of the newly established JD.com Innovation Retail Department. It is reported that the Innovation Retail Department consists of Seven Fresh, Pinduoduo, and other businesses, and will deeply explore the offline retail business layout and explore innovative models.

If calculated by years of service, Yan Xiaobing may not be as long as Yu Rui and Hu Wei, but his reputation is very loud inside and outside the industry.

After joining JD.com in 2012, Yan Xiaobing built JD.com's leading position in the home appliance online shopping industry in less than a year. During his tenure as the head of the 3C home appliance retail business group, he also led the acquisition of Wuxing Electric, created JD.com's home appliance flagship store, JD.com Home, and other offline store models, and commanded JD.com's "618" home appliance war for several consecutive years, achieving JD.com's home appliance in 2019. Ranked first in the national online home appliance retail market share.

However, behind Xu Lei's "retirement" and JD.com's large-scale personnel adjustments is the growing pressure of performance, whether it is its advantage e-commerce business or the split logistics business, either growth is slowing down or still losing money. In 2022, JD.com's annual GMV increased by 5.6% YoY, the lowest since its listing in 2014. In contrast, the GMV of Kuaishou's e-commerce increased by 32.5% YoY, and Pinduoduo's GMV growth rate was 22.95%.

Meanwhile, JD LOGISTICS, as the largest non-e-commerce business, has slowed down its revenue growth and continued to lose money. In 2020, 2021, and 2022, the company's revenue was RMB 73.4 billion, RMB 1046.93 billion, and RMB 1374.02 billion, with YoY growth rates of 47.2%, 42.55%, and 31.24%, respectively; net losses were RMB 4.1 billion, RMB 158.42 billion, and RMB 1.397 billion, respectively.

JD.com urgently needs to expand and strengthen its new businesses to solidify its new goals.

At the recent 20th anniversary celebration, JD.com officially proposed the "35711" dream for the next 20 years: three companies with revenue exceeding RMB 1 trillion and net profit exceeding RMB 70 billion; five companies entering the Fortune 500; seven companies with a market value of no less than RMB 100 billion starting from scratch; paying more than RMB 100 billion in taxes to the country; and providing more than 1 million jobs.

A review of JD.com's subsidiaries reveals that there are currently four listed companies under the JD.com umbrella: JD.com, JD LOGISTICS, JD HEALTH, and Dada Group. JD.com's production and industrial businesses have also submitted prospectuses to the Hong Kong Stock Exchange. However, few of these companies meet the requirements of the "35711" dream based on their financial performance.

Undoubtedly, JD LOGISTICS is currently the most powerful company outside of JD.com to enter the "35711" dream. Its revenue exceeded RMB 100 billion in 2022, reaching RMB 137.4 billion, ranking second among JD.com's subsidiaries; its market value is also approaching HKD 100 billion.

In addition, JD LOGISTICS is also the foundation of JD.com's strategic positioning and business development.

According to JD.com's plan, it aims to become a "technology and service company based on the supply chain" and wants to use core supply chain technology to give back to the times. In the next 20 years, it will strive towards three directions: sinking markets, technical services, and international business. This means that JD.com will still rely on its supply chain capabilities built over many years and cannot do without the full support of JD LOGISTICS.

Therefore, it is not surprising that JD LOGISTICS, following JD.com, announced a major personnel adjustment.

This series of changes by JD.com is a well-thought-out action by the company and also a projection of the current pattern of the Internet industry. However, the market is always changing rapidly, and the extent to which organizational and personnel adjustments can help corporate development is still unknown. No matter what, today's internet and e-commerce world is no longer the era of JD.com and Jack Ma's dominance.