Liu Qiangdong stepped down as CEO!

Author 丨 Yang Qingqing

Figure Source 丨 Figure worm

JD.com's management has changed.

On the morning of April 7, Jingdong Group announced that Xu Lei, president of Jingdong Group, succeeded Liu Qiangdong as CEO of Jingdong Group and will be responsible for daily operation management, reporting to Liu Qiangdong, chairman of the board of directors of Jingdong Group. At the same time, Xu Lei joined the board of directors of JD Group as an executive director.

Liu Qiangdong will continue to serve as the chairman of the board of directors and will devote more energy to long-term strategic design, major strategic decision-making and deployment, the cultivation of young leaders and the revitalization of rural areas.

Some people familiar with Jingdong revealed to the 21st Century Business Herald reporter that Liu Qiangdong is "willing to take the initiative to retire." Some insiders also told the 21st Century Business Herald reporter that Liu Qiangdong's resignation as CEO does not mean that he is completely away from the company's business, but more focused on the long-term strategic level. Liu Qiangdong will still attend JD.com's monthly SEC (Strategic Executive Committee) meetings and business analysis meetings.

On the other hand, a clear fact is that after joining JD.com for more than 10 years, Xu Lei has gradually approached the top of JD.com in recent years.

Xu Lei went one step further

Whether it is from Xu Lei's appearance or the circle of friends, you can feel the freedom of this person.

It is rare to see Xu Lei wearing formal clothes. Most of the time, he dressed casually: flatheads, hoodies, jeans, sneakers, rings, gold bracelets, and Buddha beads. Very rocky, very mixed.

His circle of friends style is also idle strolling, listening to Zhang Guorong's concert to hear "tears running", and also commenting on the official soundtrack of the Qatar World Cup. "Love to play football, love K songs, hipsters." Some people familiar with Xu Lei commented.

But this does not mean that Xu Lei is just a playmaker. In fact, during his tenure as CEO of JD Retail, even at many meetings of secondary business units, Xu Lei would not only attend as an observer, but also often give targeted opinions.

The outside world has mixed praise and criticism of Xu Lei. Some people have commented that he is proud and even arrogant, but there are also many insiders who think that he has strong business ability, decisive action, and is a "desperate three langs" and should be awarded a "super CEO".

The recognition of Xu Lei is not an empty phrase. At the beginning of 2019, Xu Lei just took over as ceo of Jingdong Retail for only half a year, and before and after that, Jingdong was controversial inside and outside, the founder's image hit the corporate brand image, and Jingdong itself was also deeply involved in negative rumors such as organizational structure changes, stagnant growth of active users, and slowdown in revenue growth, which can be described as the "darkest moment".

Xu Lei in early 2019, to a certain extent, has some "backwater war". At the annual meeting of Jingdong Mall at that time, Xu Lei, who stood on the podium for the first time as the "number one" of the mall, proposed four major changes from the simple pursuit of digital to the pursuit of quality growth, from simple goods-centric to customer-centric, from vertical vertical integration organizational structure to the front, middle and back office of building blocks, and from creating digital to creating value.

Either way, it is based on thinking about the underlying business logic of JD Retail. The implementation of such reforms also means strong pain and even resistance. In the first half of 2019, the internal management of Jingdong continued to be turbulent, a number of CXOs have left, and Liu Qiangdong has issued a number of internal letters in a rare row within a week, explaining the cancellation of the basic salary of couriers and emphasizing that "it is not my brother who mixes up the days".

But in the end, the results speak for themselves. After Xu Lei took over as CEO of JD Retail, he successfully reversed the downward trend of revenue growth. Two years after taking over as CEO of JD Retail, JD.com in 2020 not only achieved large-scale profitability, but also accelerated growth. In the second quarter of 2020, JD.com's active users achieved a single quarterly increase of 30 million, a year-on-year growth rate of 29.9% also hit a new high in the past 11 quarters.

It was also after this that Xu Lei was further recognized. In September 2021, JD Group announced that Jingdong Retail CEO Xu Lei was promoted to president of JD Group, responsible for the daily operation and coordinated development of various business segments, reporting to Liu Qiangdong, chairman and CEO of JD Group. Until now, 7 months later, Xu Lei has gone further and been promoted to CEO of JD Group.

In addition, JD Group has just released its 2021 annual financial report. According to the financial report, the company's net income in 2021 reached 951.6 billion yuan, approaching the trillion mark. In terms of the number of annual active users, JD.com maintained a rapid upward trend, from 471.9 million in 2020 to 569.7 million, an increase of 20.7%.

Xu Lei took over as CEO at this time, which is reasonable and expected.

Internal talent echelon

"Mr. Xu Lei is a representative leading talent who grew up in JD.com." In JD.com's announcement to the outside world today, there is such a sentence, which also has a deep meaning behind it.

Judging from Xu Lei's professional resume, he is indeed a veteran-level figure who followed Lao Liu to fight in jiangshan together. In May 2007, shortly after attending the first mid-year summary meeting of JD Mall, Xu Lei began to work as a marketing consultant for JD.com, and officially joined JD.com in January 2009.

After briefly joining Belle, Xu Lei returned to Jingdong Mall in 2013 and was fully responsible for marketing work; since the end of 2014, Xu Lei has also served as the head of the wireless business department, and is fully responsible for the research and development and operation of the wireless business.

For Xu Lei, 2017 was a turning point. At that time, Jingdong Group established a CMO system and appointed Xu Lei as the CMO of Jingdong Group. JD.com said that since Xu Lei served as senior vice president in 2016, he has improved the company's marketing and operational efficiency through organizational innovation, and led the team to make major breakthroughs in multiple core projects such as double 11, three super projects, Kepler plan, brand power improvement, etc., building a strong operational and marketing competitiveness for the mall.

Since then, Xu Lei has gone farther and farther down the road of CXO. In July 2018, JD Mall announced the rotating CEO system, with Xu Lei, CMO of JD Group, concurrently serving as the first rotating CEO of JD Mall. It is said that it is a rotation, in fact, in the following 3 years, Xu Lei was promoted to the sole CEO of JD Retail before becoming the president of the group.

This step-by-step promotion is actually the result of JD.com's internal talent selection mechanism. Jingdong said in the announcement that Jingdong has more than 400,000 employees, and has formed many management echelons with reasonable structure and orderly echelons, and the proportion of managers after 80 of Jingdong Group has reached 91%, which is becoming the backbone of Jingdong Group.

JD commented: Since joining JD.com for more than ten years, especially since he became the CEO of JD Retail in July 2018, Mr. Xu Lei has established the JD retail business philosophy of "trust-based and customer-centric value creation", led the retail business to achieve high-quality growth for three consecutive years, and since becoming the president of JD Group in September 2021, he has made outstanding contributions to the daily operation and coordinated development of various business segments. At the same time, after more than three years of operation, the Strategic Execution Committee (SEC) composed of heads of various business sectors and functional systems and the Strategic Decision Committee (SDC) composed of dozens of leaders of the group's front-line business units have formed a good collective decision-making and rapid response mechanism.

Win the next decade

AFTER 2020, JD.com, relatively speaking, is smooth sailing.

According to the latest financial report released by JD.com a few days ago, the number of active users of JD.com in 2021 is close to 570 million, with a net increase of nearly 100 million new users a year, of which more than 70% come from the sinking market; and for old users, the repurchase rate and ARPU value have increased significantly.

But that's all in the past. If we look at the next five years, ten years, or even longer, how can JD.com maintain a stable growth trend? Where is the new space for growth?

Some analysts will start from users and markets: continue to deepen the sinking market, open up overseas markets, and obtain multiplication effects from geographical space; or grasp young users, so that they can both gain increments and enjoy longer user life cycle value.

Admittedly, these JD.com are doing it. But the crux of the matter is that simply to grab these markets and users, there will still be a time to the top, and even that moment will come quickly. There are always general stories like this, after which the feast will disperse and leave.

JD.com's strategy is clearly not. A clear fact is that in recent years, JD.com has placed more and more emphasis on using supply chain technology to help entity merchants reduce costs and increase efficiency, improve consumer experience and obtain incremental value. Since 2017, JD.com has proposed a comprehensive transformation to technology, and has invested nearly 80 billion yuan in technology in the past 5 years, comprehensively upgraded its own supply chain infrastructure and digital technology capabilities, and has been taking the road of continuous optimization of cost, efficiency and experience of the supply chain.

And this point, Xu Lei as early as 2019 or even earlier, has a far-reaching thinking. "I've been saying that a great company needs to go through two economic cycles, one of which is about 8-12 years," Xu Lei, who is still the CEO of retail, admitted in an interview with the media, including 21st Century Business Herald, "If JD.com wants to cross the economic cycle, we will always position ourselves as a retailer." ”

Xu Lei stressed that JD.com's opponents are neither Pinduoduo nor Alibaba, but JD.com itself. In fact, JD.com is also doing something completely different from other e-commerce platforms: with nearly 10 million self-operated SKU goods and more than 1,300 warehouses, JD.com has compressed the number of inventory turnover days to a world record of 30.3 days, at the same time, JD.com has helped partners improve operational efficiency and accelerate capital turnover through a large amount of infrastructure investment and digital technology innovation.

The data shows that in the fourth quarter of 2021, JD.com's accounts payable turnover days further decreased to 45.3 days, shortening by nearly 15 days in the past three years.

In November 2020, JD.com released long-term goals for the next ten years: empowering the real economy, serving 1.5 billion consumers and nearly 10 million enterprises worldwide; improving social efficiency, driving customer inventory turnover days by 30%, and promoting social logistics costs to less than 10%; promoting environmental friendliness, reducing Jingdong Group's carbon emissions by 50% compared with 2019 in 2030, and promoting sustainable consumption.

Under such a ten-year goal, JD.com needs to provide a strong organizational guarantee for strategic decision-making and business deployment. Let Liu Qiangdong, who is most familiar with JD.com, jump out of the business perspective and examine JD.com with a more macro strategic pattern, and at the same time, let Xu Lei, a leader who has grown up from within JD.com, take the helm of various businesses and achieve high-quality growth. This may be the best choice for JD.com.

Editor of this issue Wang Tingting Intern Huang Jingshan