JD makes management changes in pursuit of ambitious growth plan
Chinese online retailer JD on Monday announced changes to its senior executive line-up, involving its logistic arm and healthcare unit, days after releasing ambitious growth targets at its 20th-anniversary celebration last week.
Hu Wei, former chief executive of JD Property, will succeed Yu Rui, who resigned for personal health reasons as CEO of JD Logistics, on June 26. Additionally, the chief financial officer of JD Health, the drug store operator, will assume the position of CEO for JD Property.
Why it matters: The top-level changes come at a time when JD experienced its lowest-ever pace of revenue growth. Just a month prior, the Beijing-based company made a surprise management reshuffle, with chief financial officer Sandy Xu replacing Xu Lei, who had served as CEO for only a year.
- Executives now face challenges on multiple fronts in their pursuit of JD’s ambitious growth goal, which it has called “35711 Vision” and was announced on June 18.
- As part of the plan, JD plans to establish three enterprises with more than RMB 1 trillion ($140 billion) in revenue and RMB 70 billion in net profit over the next two decades.
Details: In 2022, JD achieved a milestone by surpassing the trillion-dollar revenue mark, with revenues totaling RMB 104.62 billion. The company also recorded a net income of RMB 10.4 billion thanks to strict cost-cutting measures, compared to a loss of RMB 1.04 billion a year prior.
- JD currently has two Hong Kong-listed affiliates, JD Health, which went public at the end of 2020, as well as JD Logistics, which was listed a year later. The drug store operator’s total revenue amounted to RMB 46.7 billion in 2022 while achieving a net profit of RMB 380 million. However, the logistics unit has not yet recorded a profit despite having nearly three times the revenue of JD Health.
- JD also has majority control of Dada group, the Nasdaq-listed delivery and retail company, which is also yet to turn a profit.
- JD’s property and industrial units are gearing up for Hong Kong listings, according to the e-commerce firm’s March filing. A previous Reuters report cited sources as saying the two firms are valued at $1 billion each. Under the company’s “35711 Vision,” JD intends to bring seven publicly listed companies with at least RMB 100 billion in market cap over the next 20 years.
- Meanwhile, Yan Xiaobing, former head of JD’s international business, is reportedly back at the company after leaving a year ago. Yan will lead a newly-created team that merges grocery chain 7Fresh and group-buy businesses into a unit called “innovative retail.”
Context: Alibaba, a major rival to JD, has conducted several rounds of structural and management changes this year. Earlier this month, Alibaba appointed Joseph Tsai as chairman and Eddie Wu as CEO, succeeding Daniel Zhang. Alibaba also announced in late March that it will split its operations into six standalone units, each managed by a different chief executive and able to pursue separate IPOs or external funding.
- Both JD and Alibaba, as China’s leading e-commerce firms, have seen increased top-level reshuffles and ongoing restructuring efforts in recent months as they aim to stay competitive amid a larger economic slowdown and increased competition.
Cheyenne Dong is a tech reporter now based in Shanghai. She covers e-commerce and retail, blockchain, and Web3. Connect with her via e-mail: cheyenne.dong[a]technode.com.
More by Cheyenne Dong