Xu Lei succeeded Liu Qiangdong as CEO of JD Group, and the new management team changed to the end

Economic Observation Network reporter Zhou Yingmei On April 7, JD.O (9618.HK) announced that Xu Lei, president of JD Group, would succeed Liu Qiangdong as CEO of JD Group. Since the major adjustment of JD.com's organizational structure in September 2021, Xu Lei's role has been further clarified, and Liu Qiangdong has only retained the position of chairman of the board of directors of JD Group.

JD.com also announced that Xu Lei will join the board of directors of JD.com as an executive director. Liu Qiangdong continues to serve as the chairman of the board of directors of JD Group, and will devote himself to the company's long-term strategic design, major strategic decision-making and deployment, young leading talent training and rural revitalization and career.

In December 2018, Xu Lei was given the authority to manage the business line for the first time, and after several adjustments from JD.com, Xu Lei still held the most important management role at the business level of JD.com. Today, Xu Lei is the CEO of Jingdong Group, which is seen by the outside world as the embodiment of the end of the wave of Jingdong's management team change, business line level, starting from December 2020, the helmsmen of Jingdong's four sub-groups have changed successively, and all of them have completed the change. What changes will the new management team bring to JD.com?

Xu Lei's history of ascension to the throne

Xu Lei has been with JD.com for more than 10 years, and since Xu Lei was promoted to rotating CEO of JD Mall in July 2018, he has become a "spokesperson" for JD.com. In February 2013, Xu Lei returned to Jingdong Mall as a senior vice president and was fully responsible for marketing; in April 2017, he served as the CMO of Jingdong Group; in July 2018, Xu Lei was promoted to rotating CEO of Jingdong Mall; in January 2019, Jingdong Mall was upgraded to a retail sub-group, forming a "troika" with Jingdong Logistics and Jingdong Digital (later renamed: Jingdong Technology), and Xu Lei was appointed as the CEO of Jingdong Retail.

From 2018 to 2021, since Xu Lei took charge of JD Retail, the number of jd.com's annual active users has increased from 300 million to 570 million. In 2021, JD.com's revenue was 951.6 billion yuan, an increase of 27.6% year-on-year, maintaining a good growth rate. However, JD.com suffered a loss after the third quarter of 2021, with a net loss of 3.6 billion yuan for the whole year of 2021 and a net profit of 49.4 billion yuan in the same period of 2020. JD.com, which has turned to real enterprises, has been busy building logistics warehouses in the past year, and has maintained greater efforts to obtain new users, JD.com, in the sinking market.

Fading out of management does not mean disconnecting from the company. Public information shows that at present, Liu Qiangdong is still the largest shareholder of JD.com, with a shareholding ratio of 11.9%.

It is understood that the organizational mechanism of JD.com is becoming more and more mature, after more than three years of operation, the strategic executive committee (SEC) composed of the heads of various business sectors and functional systems and the strategic decision-making committee (SDC) composed of dozens of heads of front-line business departments of the group have formed a good collective decision-making and rapid response mechanism. In terms of young talents, at present, the proportion of post-80s managers in Jingdong Group has reached 91%.

After Xu Lei took over as CEO of JD Group, he was more clear about his role as the head of the group. In fact, since December 2018, after the adjustment of JD.com's structure, the heads of each business line have reported to Xu Lei instead. After January 2019, JD.com divided its business into retail, logistics, and technology subgroups, and the basic retail was still managed by Xu Lei. By September 2021, Xu Lei will serve as the president of JD Group in this major adjustment of JD.com, and then determine that Xu Lei will be responsible for the daily operation and coordinated development of JD.com's various business sectors.

The four subgroups at the helm changed sides

The heads of various business segments of JD.com have also been basically replaced. On September 6, 2021, JD Retail WAS succeeded by Xin Lijun, former CEO of JD Health; CEO of JD Health was Jin Enlin, former head of JD Health Pharmaceutical Department. Prior to this, on December 21, 2020, the CEO of JD Technology was changed from Chen Shengqiang to Li Yayun, the former chief compliance officer of JD Group; on December 30, 2020, Wang Zhenhui, CEO of JD Logistics, resigned, and was succeeded by Yu Rui, the former chief human resources officer of JD.com.

Xin Lijun, the current CEO of JD Retail, joined JD.com in 2012 and previously served as the head of the apparel and home furnishing business department and the head of the life service business group under JD Retail, and served as the CEO of JD Health for two years from July 2019 to September 2021.

Yu Rui, CEO of JD Logistics, joined JD in 2008 as a management trainee, and became the chief human resources officer of JD.com in 2019, successively serving as the general manager of Central China, the general manager of East China, the vice president of JD Group and the CEO of No. 1 Store.

JD.com CEO Yayun Li joined JD.com in December 2007 after serving as CHIEF Compliance Officer of JD.com Group and Head of JD.com's Legal Team.

JIN Enlin, CEO of JD Health, joined JD.com in 2014 after previously serving in the strategy department and investment department, and then served as the general manager of JD Pharmaceutical at JD Retail.

In terms of business structure, after many changes, several business segments within the original JD Group have become independent sub-groups. JD Health was listed on the Hong Kong Stock Exchange in December 2020, and JD Logistics was also listed on the Hong Kong Stock Exchange in May 2021. Jingdong Health's revenue in 2021 was 30.682 billion yuan, an increase of 58.3% year-on-year, with an annual loss of 1.073 billion yuan; JD Logistics' revenue in 2021 was 104.693 billion yuan, an increase of 42.7% year-on-year, and Jingdong Logistics recorded an annual loss of 15.6 billion yuan in 2021.

After the independent listing, JD Health and JD Logistics have further strengthened their external cooperation and gradually reduced their dependence on JD Group. The profitability of these two sub-groups has also been presented, with non-IFRS adjusted annual profit of 1.4 billion yuan for 2021, and THE operating profit of Jingdong Logistics in the third and fourth quarters of 2021 was 727 million yuan and 730 million yuan, respectively.

On April 2, 2021, JD Digital's IPO on the Sci-Tech Innovation Board was terminated. In May 2021, JD Digital Industry and Commerce changed and officially changed its name to JD Technology. JD Technology integrates the cloud and AI businesses of the former JD Digital and JD Group. In the first quarter of 2021, after the completion of the closing of the merger of JD Group's cloud and AI businesses, JD Group held a 42% stake in JD Technology. According to the previously disclosed data, from 2017 to 2019 and the first half of 2020, jd.com's operating income was 9.07 billion yuan, 13.616 billion yuan, 18.203 billion yuan and 10.327 billion yuan, respectively. Correspondingly, the net profit figures were a loss of 3.82 billion yuan, a profit of 130 million yuan, a profit of 790 million yuan and a loss of 670 million yuan, respectively.

At present, JD Retail contributes the most revenue to JD.com, and the annual revenue contributed by JD Retail in 2021 is 866.3 billion yuan, accounting for 91% of the total revenue. JD Retail's operating profit contribution for the full year of 2021 was 26.612 billion yuan, compared with 20.6 billion yuan in the same period of 2020.