On April 7th, JD.COM issued an important announcement on coaching change. Xu Lei, President of JD.COM Group, succeeded Liu Qiangdong as CEO of JD.COM Group, and will be responsible for daily operation and management, reporting to Liu Qiangdong, Chairman of the Board of Directors of JD.COM Group.
Meanwhile, Xu Lei will join the board of directors of JD.COM Group as an executive director. All appointments take effect immediately.
The founder retired behind the scenes, and the second master took the "No.1 position" on the tooling, which is not a new drama in the Internet circle. Ma Yun, Liu Qiangdong and Huang Zheng, the core founders and leaders of the e-commerce Jianghu "Cat and Dog Fight (Ali, JD.COM and Pinduoduo)", all "retired behind the scenes".
However, JD.COM insiders said that Liu Qiangdong’s resignation does not mean that he is far away from JD.COM’s business, and Xu Lei still reports to Liu Qiangdong. Ma Yun and Huang Zheng, as the founders of the company, also firmly grasp the fate of the company. The "post-wave era" may not have really arrived, but Xu Lei’s internal and external exams have arrived.
Rock Youth at the helm JD.COM: Leading Design 618, taking over the core work of JD.COM began three years ago.
On the morning of April 7th, the news that Liu Qiangdong stepped down as CEO of JD.COM Group rushed to the hot search.
Not surprisingly, Xu Lei, the second-in-command in JD.COM, became the CEO. Xu Lei joined JD.COM Group for more than 10 years. In the eyes of colleagues, he is always less "businessman" and more "rock". It is well known that JD.COM, the "second master" in the Internet circle, likes rock and roll.
According to the observation of the Beijing News Shell Finance reporter, in many public meetings, Xu Lei rarely wears formal clothes. He likes to wear hooded sweaters, "Goro’s" necklaces and "strings", and his social media profile is not business to outsiders. "I never walk in the rain without an umbrella; I have my own sky, and it never rains.
During his tenure as President of JD.COM Group, Xu Lei was mainly responsible for the daily operation and coordinated development of various business segments. Previously, Xu Lei served as CEO of JD.COM Retail, Chief Marketing Officer of JD.COM Group, Head of Wireless Business Department and Head of Marketing Department of JD.COM Mall.
According to the JD.COM Group’s public information combed by the Beijing News Shell Finance reporter, Xu Lei grew up in the military compound and worked for Lenovo Group from 2000 to 2002, responsible for the network promotion of Lenovo Group brands and products; From 2002 to 2007, he worked for Haoye Advertising Network, the largest professional online marketing service provider in China. In 2007, he worked as a marketing consultant for JD.COM Mall, and was responsible for establishing the marketing public relations department of JD.COM Mall; From 2009 to 2010, he served as the vice president of marketing of JD.COM Mall, and was fully responsible for public relations promotion, brand building and government public relations of JD.COM Mall.
In February, 2013, Xu Lei returned to JD.COM Mall as Senior Vice President, fully responsible for marketing. In mid-2016, he served as senior vice president of JD.COM Group, and started to promote the closed-loop integration of front-end businesses and teams such as APP, PC and WeChat in JD.COM Mall, and established the mall marketing platform system.
In April 2017, he officially served as CMO of JD.COM Group, reporting to Liu Qiangdong, Chairman and CEO of JD.COM Group. On July 16th, 2018, JD.COM Mall announced the implementation of the rotating CEO system, with Xu Lei, CMO of JD.COM Group, as the first rotating CEO of JD.COM Mall. On February 1, 2019, JD.COM Mall was upgraded to JD.COM Retail Group, with Xu Lei as CEO.
According to the internal information of JD.COM Group, Xu Lei led the establishment of JD.COM’s marketing and public relations system and platform operation system, which promoted JD.COM’s strategic transformation to mobility. He also led the design of JD.COM 618 marketing activities, and took the lead in opening up JD.COM’s supply chain capabilities. Xu Lei also serves as the director of Dada Group and Everything New Life Group.
Xu Lei’s appointment is not unexpected. On September 6th, 2021, JD.COM Group made an important personnel adjustment. It was announced that Xu Lei was appointed as the president of JD.COM Group, Xin Lijun was appointed as the CEO of JD.COM Retail and Jin Enlin was appointed as the CEO of JD Health Co., Ltd., with immediate effect.
At that time, the Group disclosed that Liu Qiangdong, Chairman and CEO of JD.COM Group, would devote more time to long-term strategic design, young talent training and rural revitalization.
In fact, Liu Qiangdong’s retreat from the background can be traced back to November 2019. After jingdong cloud Computing Company stepped down as a manager, by November 2019, Liu Qiangdong stepped down as an executive of dozens of companies. Xu Lei took over as the legal representative, executive director and general manager as early as 2020, which is the main operator of JD.COM Mall, which is responsible for more than 90% of JD.COM Group’s revenue.
Xu Lei joined JD.COM Group in 2009 and served as CEO of JD.COM Retail, responsible for the development, operation and strategy of JD.COM Group’s retail business. As the most important activity in JD.COM every year, 618, formerly known as the "Black Moon and High Wind" promotion activity in JD.COM, was designed by Xu Lei, and now it has become one of the landmark events in the e-commerce industry every year.
One of the important events that made him lay a solid foundation in JD.COM was that Xu Lei became the CEO of JD.COM Retail in July 2018, established the business philosophy of "value creation based on trust and customer-centered" and led JD.COM Retail to achieve growth for three consecutive years. In November 2019, the financial report of JD.COM in the third quarter of 2019 showed that under the leadership of Xu Lei, the profit rate of retail operation in JD.COM increased to 3.3%, the highest since its initial listing.
Since 2019, Xu Lei has attended many important events in JD.COM, including JD.COM’s secondary listing in Hong Kong and the listing of JD Health and Jingdong Logistics. Xu Lei has replaced Liu Qiang East Station in an important position.
At present, Liu Qiangdong will continue to serve as the chairman of the board of directors, and devote himself to the company’s long-term strategic design, major strategic decision-making, young leading talents training and rural revitalization.
The core management realizes the adjustment of "rank system"
In addition to the latest CEO change of JD.COM Group, Xu Lei was appointed as the president of JD.COM Group in September 2021, the latest major personnel adjustment of JD.COM.
Xu Lei, a former CEO of JD.COM Retail, took the post of group president, Xin Lijun, a former CEO of JD Health, took the post of CEO of JD.COM Retail, the core business, while Jin Enlin, a former general manager of JD Health Pharmaceutical Department, successfully took the post of CEO of JD Health. JD.COM’s core management has realized the personnel adjustment of "ranking system".
However, no matter how other senior management positions change, JD.COM is still under the control of Liu Qiangdong. Insiders in JD.COM said that Liu Qiangdong’s resignation this time does not mean that he is far away from JD.COM’s business, and Xu Lei still reports to Liu Qiangdong.
In the Internet age, the founders of the company have a close relationship with the company. When it comes to Alibaba, Tencent, JD.COM and other people, they will naturally contact the "No.1 position", Ma Yun, Ma Huateng and Liu Qiangdong. In the public psychology, the words and deeds of these bosses have long been linked to the company image.
A management person in JD.COM told the Shell Finance reporter of the Beijing News that in recent years, Liu Qiangdong is still "resolute" and basically participates in the company’s routine executive breakfast meeting at 8 am every day. This breakfast meeting requires all senior executives to participate and has been implemented for more than ten years.
On February 3rd, JD.COM announced that Liu Qiangdong, the chairman of the board of directors of the company, would donate 62,376,643 shares of Class B common stock to a third-party foundation for charitable purposes, and has submitted relevant documents to the US Securities and Exchange Commission. According to JD.COM’s closing price of $73.2 per share on February 2, the donation is worth nearly 15 billion yuan.
However, after this donation, Liu Qiangdong still has control over JD.COM. In April, 2021, JD.COM’s documents submitted on the Hong Kong Stock Exchange showed the latest equity situation of JD.COM. Among them, Liu Qiangdong holds 434.5 million ordinary shares, accounting for 13.9% of the shares and 76.9% of the total voting rights.
Other JD.COM executives Xu Lei, Xu Ran and Zhang Wei hold less than 1% of the common tradable shares. After this donation, Liu Qiangdong’s shares have been reduced to 360 million shares, which is still higher than Wal-Mart’s, and the voting rights are still dominant. Moreover, JD.COM’s internal letter, staff letter and other important information are still issued by Liu Qiangdong.
Can the "New No.1 Position" lead JD.COM through the storm?
Last year, in 618, which is of great significance to JD.COM, Liu Qiangdong issued a shareholder’s letter, saying that in the next decade, JD.COM will devote itself to building a new generation of infrastructure-JD.COM Digital Intelligence Society Supply Chain. The overall development planning and direction of JD.COM Group is still controlled by Liu Qiangdong.
According to JD.COM’s financial report, in 2021, the total revenue of JD.COM Group was 951.6 billion yuan, an increase of 27.6% compared with 2020. Among them, the commodity income was 815.654 billion yuan, an increase of 25.1% compared with the whole year of 2020, and the service income was 135.937 billion yuan, an increase of 44.7% compared with the whole year of 2020.
In fiscal year 2021, JD.COM’s performance turned from profit to loss. Affected by losses for two consecutive quarters, JD.COM’s net loss attributable to common stock in 2021 was 3.6 billion yuan, and its net profit for the whole year in 2020 was 49.4 billion yuan. Xu Lei said at the performance meeting that JD.COM did not pursue the rapid growth of a single indicator, but paid attention to the health and sustainability of the overall business growth.
According to the data of the National Bureau of Statistics, the national online retail sales in 2021 was about 13.09 trillion yuan, a year-on-year increase of 14.1%. Affected by the big environment, the financial report of the e-commerce industry is generally not bright enough. The three sectors that support JD.COM Group’s revenue are retail business, logistics business and new business, among which retail business is still the most important source of revenue, accounting for 91% of the revenue.
The financial report shows that the operating profit of logistics business and new business has turned from profit to loss. The loss of logistics business mainly comes from the first half of the year, because of the strategic investment layout of core resources such as logistics infrastructure, technology and personnel. The new business mainly includes JD.COM production and development, Jingxi, overseas business and technological innovation, and it is also a money-burning business that people in the industry agree. Since the comprehensive transformation to technology in early 2017, JD.COM has invested nearly 80 billion yuan in technology.
However, the sinking market business including Jingxi business has brought a large number of active market users to JD.COM. 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 a year, and 70% of the new users came from the sinking market.
In terms of logistics, in 2021, the total revenue of Jingdong Logistics reached 104.7 billion yuan, up 42.7% year-on-year, of which the revenue from external customers reached 59.1 billion yuan, up 72.7% year-on-year, accounting for 56.5% of the total revenue. Jingdong Logistics overfulfilled the strategic goal of "five-year revenue exceeding 100 billion and external customer revenue accounting for more than half" formulated at the time of formal independence in 2017.
In 2021, the customer income of Jingdong logistics integrated supply chain reached 71.1 billion yuan. Revenue growth comes from the increasing number of customers in the integrated supply chain and the improvement of the average income of single customers. In 2021, the number of customers in the external integrated supply chain of Jingdong Logistics increased by 41.7% year-on-year, and the average income of single customers exceeded 340,000 yuan.
Xu Lei repeatedly mentioned at the performance meeting that JD.COM’s logic is to maintain sustainable and quality growth, pay more attention to the quality and refined operation of user growth, and will continue to actively adjust the user strategy. At the same time, he thinks that the ceiling of user growth in JD.COM is still very high, and users will maintain a healthy growth in the next few years, which is very confident.
In the past three years, JD.COM has clearly defined the strategic positioning of "technology and service enterprise based on supply chain". In terms of organizational mechanism, after three years of operation, it has formed a strategic executive committee (SEC) composed of heads of various business sectors and functional systems and a strategic decision-making committee (SDC) composed of dozens of heads of front-line business departments of the Group to make collective decisions and respond quickly.
Obviously, JD.COM is not someone’s JD.COM, but as the president and CEO of the group, Xu Lei will be faced with the reality that the growth of mobile Internet has peaked and how to lead JD.COM’s "brothers" out of the low-profit operation stage and new business difficulties. Not only that, Xu Lei’s internal and external exams have come, and the post-wave drama in the electric business circle is still being staged. While consolidating their own cities, you "post-waves" need to face the rising of external emerging e-commerce places such as Tik Tok and Aauto Quicker.
Beijing News Shell Finance Reporter Cheng Zijiao Editor Song Yuting Proofread Liu Baoqing