Liu Qiangdong changed the commander again: dissatisfied with JD.com's performance, a more fierce price war is coming

Source: Visual China

Author: Ye Hao

Edited by Kang Xiao

Produced by|Deep Web.Tencent Xiaoman Studio

Xin Lijun, the helmsman of JD Retail, changed hands, casting ripples again on the e-commerce rivers and lakes that had just ended Double 11.

On the evening of November 15th, JD.com announced a personnel appointment, Xin Lijun no longer holds the position of CEO of JD Retail, which is concurrently held by Xu Ran, who was just promoted to CEO of JD Group half a year ago, effective immediately. Xin Lijun's whereabouts, the announcement said, "There will be another appointment in the company." Some JD insiders revealed, "JD Health may be Xin Lijun's next destination." ”

JD.com's financial report for the third quarter of 2023 shows that JD.com's growth is under pressure and the reality it faces is grim, especially JD.com's retail, whose growth has stagnated. JD Retail contributed 87% of the group's revenue, with a revenue of 212.06 billion yuan, a slight increase of only 0.1% year-on-year. The revenue of goods was 195.304 billion yuan, a year-on-year decrease of 0.9%, of which the revenue of electronic products and household appliances almost did not grow, and the revenue of daily necessities was 75.9 billion yuan, a year-on-year decrease of 2.3%.

Change of commander at this time, "Liu Qiangdong must not be satisfied with the performance, Lao Liu has always been performance-oriented, Xin Lijun was replaced and has something to do with the business, there is no doubt about this, the performance of Jingdong's retail business in the first three quarters is not very good, and the person directly responsible has to take the blame." Li Chengdong, founder of the Dolphin Society, analyzed the "Deep Web".

A JD insider told "Deep Web": Xin Lijun's resignation as CEO of JD Retail this time is a continuation of JD's structural adjustment after Liu Qiangdong's return at the end of last year.

After Liu Qiangdong returned to the front line, the first card he played was "low price". JD insiders revealed, "Low price is the most important weapon for JD's success in the past, and it will be the only basic weapon in the future." ”

A month earlier, JD.com also experienced "pessimistic expectations" in the secondary market, and a number of banks downgraded JD.com. On October 13, JD.com's Hong Kong stocks fell more than 11%, hitting a new low this year. After the release of the third quarterly report, on November 15, JD.com's share price rose 7.04% to close at $28.59 per share, and the total market value increased by $2.959 billion (about 21.4 billion yuan) overnight.

Xu Ran, who has a financial background, will oversee JD.com's core business and retail business, and she is facing a more complicated situation - how to implement Liu Qiangdong's strategy and bring JD.com's main business back on the growth track.

"In terms of retail business capabilities, Xu Lei and Xin Lijun's abilities must be above Xu Ran, these two people have fought hard in the past years of JD.com, and they are not airborne executives. A person close to the top management of Jingdong told "Deep Web", "Maybe Liu Qiangdong just lacks a person who can implement his strategy in place, and Xu Ran is the most suitable person." ”

Jingdong Retail is under pressure and Xin Lijun resigns

JD.com released its financial report for the third quarter of 2023. According to the data, JD.com's total revenue reached 247.7 billion yuan, a year-on-year increase of 1.7%, operating profit increased by 6.6% year-on-year to 9.3 billion yuan, and the net profit attributable to the company's ordinary shareholders was 7.9 billion yuan, compared with 6 billion yuan in the same period last year.

In the proportion of revenue in JD.com's third-quarter financial report, JD Retail contributed 87% of the group's revenue. As we all know, 3C products are the basic plate of JD Retail. In the 3C market, the main position of JD.com, the decline in growth rate is an indisputable fact.

According to public information, in October 2012, Xin Lijun joined JD.com and successively served as the general manager of the home improvement department of the open platform of JD Mall, the president of the home life division of JD Mall, and the president of the life service business group of JD Mall. Since 2019, Xin Lijun has served as the CEO of JD Health. In September 2021, he succeeded Xu Lei as the CEO of JD Retail.

In the past "Double 11", Jingdong Media Open Day, Xin Lijun, who stood on the stage, expressed his dissatisfaction with the head anchor's "lowest price on the whole network", and said, "Jingdong is the largest retailer in the country, and can provide the best cost to suppliers. ”

The origin of the incident is: on October 24, the staff of Jingdong procurement and sales posted on Moments that they had received a lawyer's letter from the brand, and the screenshot he posted showed that the brand Haishi accused JD of changing the price without permission, which led to a passive breach of contract between Haishi and other customers, and there was a risk of huge compensation.

After Liu Qiangdong returned last year, the first card played by JD.com was "low price". "This 10 billion subsidy has a first-level entrance to a channel, covering all categories of goods, and self-operated and POP (Platform Open Plan, especially referring to third-party merchants) merchants can participate in it. A JD insider told the Deep Web. In addition, in January, JD.com lowered the entry threshold for merchants.

On March 8, JD.com's 10 billion subsidy was launched. It is understood that Jingdong's "10 billion subsidy" project is led by Xin Lijun. Obviously, this project is directly aimed at Pinduoduo. Not only Pinduoduo, but also the rising stars of Doukuai e-commerce are creating a "low-price mentality", and they are also sharing the cake of the old e-commerce.

Since 2018, when the company began to exert tens of billions of subsidies, Pinduoduo's Apple and other digital devices have begun to gain a firm foothold in the minds of consumers with tens of billions of subsidies, and this is the main battlefield of JD.com, which is known for its 3C digital. Although JD.com has followed up, the results are not obvious. For JD.com, the pressure on the 10 billion subsidy is that JD.com's revenue growth continues to be under pressure.

On November 23 last year, JD Retail and other business lines started high-level structural adjustments. According to public information, Yan Xiaobing, the former head of the 3C home appliance business group, was transferred to the head of international business, Yao Yanzhong, the former head of the life service business group, was appointed as the head of the 3C home appliance retail business group of JD Retail, and Miao Qin was appointed as the head of the JD retail life service business group.

In addition, JD Retail's largest 3C home appliance business group was split into home appliance business group and computer communication business group, the new home appliance business group was headed by the former JD Retail Group CFO Li Shuai, and the new person in charge of the computer communication business group was Wu Shuangxi, the former president of the computer digital business department. And now, Xin Lijun, the CEO of JD Retail, has stepped down.

How JD.com will return to growth

The CEO of JD Retail has become Xu Ran. Xu Ran joined JD.com in July 2018 and was promoted to Group CFO in June 2020. In May this year, Xu Lei, CEO of Jingdong Group, announced his retirement, and Xu Ran took over as CEO, reporting directly to Liu Qiangdong.

In fact, for Liu Qiangdong, it is more about the lack of a person who implements the decision-making and the person who implements Lao Liu's strategy in place. Li Chengdong's analysis of the "Deep Web". After Xu Ran became the CEO of JD.com, he is now in charge of the retail business, and the burden on his shoulders is heavier, and the retail business is still very complicated. ”

"If you stop driving and give the steering wheel to someone else, you'll actually give up," Mr. Liu once told the author of "The Deep Web." "If I can't control this company, I'd rather sell it," Liu Qiangdong also said bluntly.

However, in recent years, under the influence of various reasons, Liu Qiangdong's management philosophy has changed, and he no longer has to do everything himself, and has learned to delegate power appropriately. Since 2019, Liu Qiangdong has faded out of front-line management, except for high-level management meetings. In the eyes of grassroots employees, Liu Qiangdong is becoming more and more like the spiritual leader of JD.com.

However, even after Xu Lei became the CEO of JD.com, he still reported to Liu Qiangdong, and the steering wheel of JD.com has always been in Liu Qiangdong's hands.

In recent years, JD.com has formed a collective decision-making mechanism of SEC+SDC: the SEC is a strategic executive committee composed of the heads of various business segments and functional systems, and SDC is a strategic decision-making committee composed of the heads of the group's front-line business departments. A senior person close to JD.com said, "After stepping down as CEO, Liu Qiangdong will still participate in JD.com's monthly SEC and SDC meetings." ”

During his tenure as CFO of JD Group, Xu Ran and his team completed the mergers and acquisitions of listed companies such as Dada, Debang and China Logistics Real Estate, the business restructuring of JD Technology, further improved the strategic layout of JD Group's business, and promoted the secondary listing of JD Group in Hong Kong, the spin-off and listing of JD Health, JD Logistics and JD warehousing facilities.

Xu Ran's expertise can help JD.com improve its financial efficiency. At present, Xu Ran's answer sheet after becoming CEO is not bad.

JD.com's financial report shows that JD.com's net profit attributable to ordinary shareholders was 7.9 billion yuan, a year-on-year increase of 32%. Non-GAAP net profit was RMB10.6 billion, up 6% year-on-year. In the third quarter, JD.com's operating costs grew at a slower pace than revenue, with R&D expenses and administrative expenses down 7.8% and 5.6% year-on-year, respectively.

In terms of expenses, in the third quarter, JD.com's fulfillment expenses expanded from the previous quarter, increasing by 6.1% year-on-year to 15.2 billion yuan. Due to the end of "6.18", JD.com significantly reduced its marketing spending, with 8 billion yuan of spending increasing by 4.6% year-on-year. Marketing spending in the last quarter was $11.1 billion.

At JD.com's Q3 earnings call, the growth of JD.com's retail business, which has almost come to a standstill, is also a topic of public concern. Xu Ran said that the retail business is the core business of JD.com, with the highest proportion of revenue, and it is the foundation of JD.com's diversified business.

Now that the e-commerce industry is rising, Liu Qiangdong feels the pressure of growth, how can JD.com return to growth?