JDcom CEO Encourages Employees to Stay Resilient and Bounce Back from Adversity
JDcom's founder, while acknowledging his own mismanagement, is inspiring his employees to embrace change in the face of fierce competition in the Chinese online shopping industry
Please subscribe to CNN's Meanwhile in China newsletter, which delves into the country's growth and its global impact.
The founder of the Chinese e-commerce company JD.com is urging for change within the company, taking responsibility for "mismanagement."
JD.com chairman Richard Liu has informed employees that the company is confronting significant challenges and must address them to avoid dire consequences. This follows a similar call for change at Alibaba by rival Jack Ma, who expressed concern over the impressive performance of competitor PDD.
Liu addressed several pressing issues facing the firm in a post on JD.com's internal forum on Saturday, including concerns about the current promotion strategy and lack of support for platform merchants. The remarks, reported by Chinese news outlet LatePost, were confirmed by a person close to JD.com, who spoke to CNN on the condition of anonymity.
"He said that each of the company's challenges is a genuine issue that needs to be addressed," he stated.
"Certainly, many issues stem from my mismanagement; I take full responsibility," Liu admitted in writing.
He encouraged workers to avoid "lying flat," a Chinese colloquialism for rejecting an exhausting work environment in favor of embracing a more straightforward lifestyle.
Liu wrote that the company is large, sluggish, and ineffective, and that transforming it will take time, but he noted that the organization's core is still strong.
Founder and CEO of Alibaba Jack Ma is interviewed by Maurice Levy in the VivaTech Exhibition in Palais des Expositions of Porte de Versailles, Paris, France on May 16, 2019.
Abaca Press/SIPAPRE/Sipa USA/AP
Pay any price. Alibabas Jack Ma urges reform as rival rattles e-commerce giant
Liu expressed his gratitude to the employee, referring to them as a "brother," for their comment.
"I have confidence that we will rise above our current position. Both individuals and companies experience ups and downs on the path to achieving success," he continued. "Let's collaborate to bring about change!"
Rising competition
According to a spokesperson from JD.com on Tuesday, "this is a regular communication, which reflects the trust of our leadership and the collective effort of our team in resolving issues and conquering obstacles."
Ma recently addressed employee comments about a stock rally in the internal Alibaba forum. He congratulated PDD on its performance and encouraged employees to share more constructive comments and suggestions in light of the fierce competition.
PDD is now competing with JD.com, the second largest e-commerce firm in China after Alibaba. Recently, PDD has seen a sharp increase in sales and profits, posing a significant challenge to both JD.com and Alibaba. PDD's stock has surged by 75% this year, surpassing Alibaba in market capitalization for the first time last month, with JD.com now trailing in a distant third place. In comparison, JD.com and Alibaba have seen declines of 54% and 19% in their shares, respectively, in 2023.
Colin Huang, the founder of PDD, has seen a significant rise in the ranks of the rich lists. In the annual ranking of China's wealthiest people by the Hurun Research Institute, he was the fastest riser this year.
According to Hurun, Huang's estimated net worth has surged to $37.2 billion, making him the country's third richest person after shooting up seven spots. The institute attributes this 59% increase in wealth to the growth of Pinduoduo domestically and the success of its Temu platform in the United States.
JD.com's headquarters in Beijing.
According to a November report by Morningstar's senior equity analyst Chelsey Tam, JD has faced challenges as consumer demand shifts towards value-for-money products, an area in which the company is not as strong.
JD's stock experienced a 3.2% decrease in New York on Monday after news of its removal from the Nasdaq 100 Index, which is made up of the largest non-financial companies on that exchange.
This statement was made by Liu more than a year after he resigned as CEO of JD.com. His resignation came after his arrest in the United States on suspicion of rape, which led to a high-profile #MeToo allegation in China. He reached a settlement with the alleged victim in October.
CNNs Martha Zhou and Juliana Liu contributed to this report.
