Behind Xu Lei's appointment as CEO of JD.com, it is actually the change of JD.com's management mechanism.
Wen 丨 BT Finance Zhang Jinjing
From president to CEO, Xu Lei finally turned positive after 214 days.
At 8:06 a.m. on April 7, 2022, JD Group issued an announcement that Mr. Xu Lei, President of JD Group, as CEO of JD Group, will be responsible for daily operation management and report to Mr. Liu Qiangdong, Chairman of the Board of Directors of JD Group, and Mr. Liu Qiangdong will devote more energy to long-term strategic design, major strategic decision-making deployment, young leader talent training and rural revitalization.
Such a short announcement of 100 words caused quite a stir in China's Internet circles on the same day, and some media even used headlines such as "Prince Returns to The Position".
But in fact, Jingdong issued a press release on the WeChat public account of "Jingdong Blackboard Newspaper", which has some detailed explanations that are particularly clear.
First of all, Xu Lei, who has joined JD.com for more than ten years, is a talent cultivated by JD.com itself. This is in line with the employment concept that JD.com has always adhered to. Secondly, Xu Lei established a very good business philosophy of "trust-based and customer-centric value creation" for JD.com, especially the core JD Retail, and led the entire JD Retail to achieve three years of high-quality growth, which is a result.
The key is that since he was appointed president of Jingdong Group on September 6, 2021, Xu Lei's actions have continued to clarify the ideas of Jingdong's future development, so that this big ship has achieved high-quality growth.
So based on these three reasons, Xu Lei was appointed CEO to be responsible for daily operations, which is a very simple choice for everyone.
Although many times the president and the CEO are synonymous with the two sides of the same coin in some small companies, in fact, in large groups, the CEO can be only one president. The reason is that the CEO must have both the authority of a director on the board of directors, can participate in discussions and decision-making on the board of directors, and has risen to the core management of the company, while the president is a senior manager responsible for day-to-day administrative affairs, and there is still some power distinction between the two.
Therefore, Xu Lei's appointment to the CEO of Jingdong Group means that from now on, he will make efforts at the decision-making end and the executive end at the same time, and do a good job as a bridge between the board of directors and the management team and employees.
Liu Qiangdong also "added a lock" to this.
According to a press release issued by JD.com at the same time, the Strategic Executive Committee (SEC) composed of 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 established after more than three years of operation have formed a good collective decision-making and rapid response mechanism.
The core significance of this sentence lies in the decision-making and implementation of JD.com's daily business strategy, which is not directly decided by someone, and must be collectively decided through relevant organizations to make decision-making more scientific and reasonable.
In other words, jd.com will enter the era of collective decision-making and Xu Lei's execution.
What happened in 214 days?
Now Liu Qiangdong suddenly made such a decision, completely giving Xu Lei the work of jd.com's daily operations, also based on the excellent performance of this "Beijing old cannon" in the 214 days since he was appointed president.
On the one hand, the financial report just released last month showed that Jingdong's annual revenue in 2021 was 951.6 billion yuan, an increase of 27.6% year-on-year; of which the annual revenue contributed by Jingdong retail in 2021 was 866.3 billion yuan, accounting for 91% of the total revenue.
From the perspective of a single quarter in 2021, the revenue contributed by JD Retail to JD.com has also been more than 90%. The retail business is also JD.com's profit cow, and the profit contributed by JD Retail in the first three quarters of 2021 was 7.34 billion yuan, 5.987 billion yuan and 7.942 billion yuan, respectively.
This actually shows that JD Retail is still enjoying the growth dividends left by Xu Lei.
On the other hand, one of the things that JD.com is quietly doing in 2021 is to raise the cage for birds, or it is looking for a second curve of development.
The first principle in the theory of the second curve is actually that companies should find those high-speed development markets related to the business and convert them, so that the success rate is higher.
JD.com also operates in this way. They have only continued in two directions, and are working in the same direction, hoping to find a new driving force that can really push the huge locomotive of JD.com forward.
One is the traditional advantage of logistics.
In fact, JD.com's net loss in 2021 does have the impact of factors that bring losses from logistics investment. According to the financial report, the operating loss of JD Logistics was 1.827 billion yuan. However, in exchange for such investment, the revenue of JD Logistics exceeded 100 billion yuan, and 600 logistics warehouses were added a year.
According to the financial report, Jingdong's logistics revenue in 2021 reached 104.693 billion yuan. Year-on-year increased by 42.7%, of which revenue from external customers reached 59.1 billion yuan, an increase of 72.7% year-on-year, accounting for 56.5% of total revenue. JD Logistics said that it completed ahead of schedule the strategic goal of "five-year revenue scale of more than 100 billion yuan and external customer revenue accounting for more than half" formulated when it officially became independent in 2017.
And because Jingdong Logistics has passed the cultivation period and is now close to the final overall profit, the financial report shows that the operating profit of Jingdong Logistics in the third and fourth quarters has reached or is close to 730 million yuan, which also makes Jingdong Group willing to inject funds into Jingdong Logistics to promote its rapid development.
The revenue of third-party customers of JD Logistics services exceeds 50%, and the positioning of supply chain solution providers that JD.com once set for JD Logistics has gradually become a reality, which has also deepened JD Group's determination to promote JD Logistics as a new business entity and promote the rapid development of the Group.
The other is an extension model for new consumption areas.
This piece includes new businesses such as community e-commerce Jingxi, overseas business, and JD production and development, with annual revenue of 26.063 billion yuan in 2021, an increase of 48% year-on-year. From the perspective of single-quarter revenue, the revenue of new business in the fourth quarter also increased by 44% compared with the same period last year, and the revenue from the first quarter to the fourth quarter was 5.154 billion yuan, 6.963 billion yuan, 5.733 billion yuan and 8.213 billion yuan, respectively.
However, the loss of the new business has not yet been reversed. The operating losses of new businesses from the first quarter to the fourth quarter of 2021 were, respectively, 2.281 billion yuan, 3.02 billion yuan, 2 billion yuan and 3.224 billion yuan. The operating loss of new business for the whole year of 2021 was 10.6 billion yuan, which was further expanded from the operating loss of 4.723 billion yuan in the same period of 2020.
The third is to work science and technology. As a traditional e-commerce platform, JD.com will have a large amount of funds for scientific research investment every year to ensure the competitiveness reflected in the field of technology. According to the data, since the comprehensive transformation to technology in early 2017, the JD system has invested nearly 80 billion yuan in technology.
Finally, there is user growth. With the development of e-commerce platforms today, with the peaking of the growth rate of Internet users in China, the competition for e-commerce platform users has been very fierce. However, JD.com has achieved user growth in 2021. As of December 31, 2021, the number of active purchase users in the past 12 months was about 570 million, a net increase of nearly 100 million in one year, and 70% of the new users came from the sinking market.
This actually shows JD.com's ability in user operation, and it also shows that at present, at least the basic capabilities of JD.com in the consumer field are still very normal.
Of course, this also shows from another perspective that Xu Lei has done a good job in these 214 days, and Jingdong's daily strategy is also on the right path, and the ability and direction of finding the second curve are gradually fixed and are constantly advancing.
Keyly, during this time, Xu Lei promoted JD.com to clarify the strategic positioning of "supply chain-based technology and service enterprises" and achieved 10 million SKUs with 30.3 days of inventory turnover days.
Therefore, Xu Lei said after the financial report press conference, "In the 19 years of business history, Jingdong has never valued the gains and losses of one moment, one city and one pool, and the core business logic of Jingdong is very clear, and the business model and strategic choices have always revolved around users and partners." ”
Why choose Xu Lei
In a sense, Xu Lei is the first pure Beijinger CEO of all the Internet manufacturers. His early life in the army compound brought him a special character and temperament.
One of the most important personality traits is obedience.
This has two meanings, one meaning, in the relationship between superiors and subordinates, although Xu Lei is debauched, and plays rock and roll, tattoos, smokes and drinks, he talks most about the rules here. Liu Qiangdong once said that if you want to drink, you must find Xu Lei, "because he is the most disciplined."
Xu Lei was particularly clear about how to deal with the relationship between his superiors and subordinates, especially with Dongge, and how to arrange his work. After leaving JD.com last time and returning, because there was no job arrangement, he deliberately chose the wireless business unit that no one else was willing to bring.
As a result, Xu Lei just used the way of establishing rules to bring this department out of the quagmire, and finally formed the locomotive of JD.com's growth, which is the Jingdong Mall, which is the predecessor of the mobile terminal JD.com.
It is precisely because of the work performance at this time that Liu Qiangdong completely recognized Xu Lei.
The other is that Xu Lei, a person who attaches great importance to thinking, also knows how to think.
After returning to JD.com for the second time, Xu Lei, who was almost sidelined by the "airborne" executives, did not react passively, but used such an empty window period to seriously consider his own positioning and the organizational structure of JD.com.
During that time, he read a lot of books and thought a lot.
At an event in 2014, he expressed his vision of JD.com's organizational restructuring, using Lego toys as an analogy. "My kids are young and love to play with Lego toys. I found Lego this company particularly scary. Their products have several large series, in which spare parts can be freely combined. ”
In Xu Lei's eyes, the most important thing for Internet companies is to have an organizational structure strengthened by the Internet and be able to assemble freely.
Therefore, he envisions that in the future, the organizational structure of JD.com should be able to respond quickly across departments, optimize processes, and coordinate with each other, which is the significance of the new JD mall architecture adjustment to the front, middle and back office in 2018.
At the same time, he also proposed that such adjustments must also ensure the controllability of business, the controllability of marketing costs, the controllability of risks, and the balance of many things to make very painful and keen judgments, both to have new changes and to control risks.
Xu Lei did not expect that the suggestions he made after deep thinking four years ago, Liu Qiangdong would land in this way four years later, let alone that Liu Qiangdong would hand over the task of structural adjustment to his hands.
It is precisely because this system of adjustment is gradually playing a role, the development of Jingdong is on the right track, and Xu Lei has also formed an indispensable center in the group.
Eventually becoming CEO is a natural choice.
JD.com has changed
People who are familiar with Xu Lei know that he is a person who is excited when he encounters difficulties.
JD.com can't say it's smooth sailing now, and it encounters more and more problems. But Xu Lei was also getting more and more excited.
Even in the face of a loss of 3.6 billion yuan in financial reports, because of the confidence in business adjustment, Xu Lei said that Jingdong does not pursue the rapid growth of a single indicator, but pays attention to the health and sustainability of the overall business growth; secondly, the development of China's Internet industry is becoming more and more mature, and will abandon the extensive traffic-based growth mode such as subsidies, and enter the stage of refined operation.
After all, JD.com is now getting heavier. Originally just an Internet company, through investment in the logistics end, as well as continuous investment in hardware equipment and other directions, a large part of JD.com's assets have now become real industries and fixed assets.
In the future, Jingdong will definitely adhere to such a transformation from C2M2B, and more and more emerging products will gradually expand to the market of 2B, which may be Xu Lei's idea and strategy to trace back to the supply chain and even the field of enterprise management to find jd.com's next growth point.
It is no exaggeration to say that after Xu Lei becomes CEO, JD.com will become more and more inclined to the enterprise market, and is likely to use its advantages in the field of supply chain management and e-commerce to form digital products that serve the marketing and production of enterprises.
According to the information, Jingdong Retail has helped enterprises to upgrade and transform digitally through C2M, and has built a C2M reverse supply chain for more than 1,000 manufacturing enterprises, and will serve more than 10,000 brands and factories and other manufacturing enterprises in the next three years; successively launched "one city, one policy" urban special services throughout the country, launched the "Industrial Belt Factory Direct Premium Product Plan", "Jingxin Helping Farmers", etc., to help small and medium-sized enterprises reduce costs and increase efficiency; continue to build high-quality agricultural product brands, and realize the positive cycle of consumption upgrading and farmers' income.
According to such a demand, it will definitely push back the development of some other basic businesses of JD.com.
First, the original digital supply chain of JD Logistics only guarantees the operation of JD Mall itself, and all standards can be implemented with JD's customized standards, which greatly reduces the difficulty in the field of digitalization.
But now if the ability to open the digital supply chain to all enterprises in the production field, it will inevitably go through a period of adjustment, and according to the characteristics of the entire industry and the needs of enterprises, personalized customization of some sectors in the digital supply chain, which will test the ability of Jingdong R & D personnel.
Second, from the perspective of the business direction that Xu Lei has focused on in the past, JD Digital, or JD Technology, which has gradually been marginalized, will return to its sight. From all aspects, JD Technology is the only business department of JD Group that has mastered the establishment to serve B-end customers. Previously, too much emphasis was placed on the services of the financial field, and many projects that were actively operated were fruitless.
At present, whether from the field of new products, or from the field of ability to serve users, or from the strategic level of JD C2M2B, JD Technology will become the focus of Xu Lei's attention in the future.
The core business here may learn from Ali's experience, Jingdong cloud resurrection is a possible thing, and if it really becomes the main product of Jingdong, it will definitely adjust its business and products for Jingdong's overall digital strategy, and will cooperate with Xu Lei's series of product-oriented customer capabilities to build its own core.
Of course, Jingdong will also grasp the grasp of retail and not relax, will still launch a variety of products and a variety of sales methods, using the original advantages to continuously promote the development of the retail business, for other new product testing design and strategy landing time to win time.
People who are familiar with Xu Lei feel that he is actually a very crisp Beijing grandfather.
Some people say that he is very fashionable, playing music and getting tattoos; some people say that he can talk, typical of Beijingers; some people joke about his age, saying that he is the group of small handsome people in the uncle level...
And there is no tragic and inspirational childhood experience, nor is it a clumsy kid who likes to comment on football and loves music movies. His temperament is straight forward, he does not talk much, and he is a "scribble hand" with a good voice.
"I am a craftsman who travels all over the world to eat with his craft, hates to pretend to be forced to hold himself, and simply and directly loves to hate and has a clear personality and independence. I don't like to talk, but I talk a lot. Xu Lei once said this about himself.
This is true temperament.
Xu Lei, who has a true temperament, is about to become the operator of the big ship of Jingdong, and whether he can repeat Liu Qiangdong's comment that "Jingdong is the most effective person" requires the joint efforts of Xu Lei and all the management teams.
The only thing that can be confirmed is that JD.com wants to open a chapter in the new era.
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