Richard Liu Qiangdong, the billionaire founder of JD.com, has ended a low-profile period and stepped forward to lecture executives at the ecommerce giant, threatening to fire underperformers as business growth slows.
In two video conference meetings across November and December, Liu criticised the company’s executives and, without naming any specific individuals, described some as “liars”, according to people briefed on the meetings. Liu spoke from Hong Kong after settling a civil case involving a rape allegation against him in the US in early October.
One JD employee who attended the December meeting and who declined to be named due to the sensitivity of the matter, said Liu talked about a senior management reshuffle. “Liu said only one and half vice-presidents in the retail business unit tells him the truth,” the employee said. “That unit has about 40 vice-presidents, so you can imagine the pressure on them.”
According to a second person familiar with the matter, Liu criticised JD Digits – formerly known as JD Technology – for sluggish performance, putting pressure on chief executive Li Yayun. Li was chief compliance officer for JD.com before she took over as head of JD Digits in 2021, shortly after it cancelled an IPO application amid tighter regulation of online credit.
While Liu has quit many frontline positions at the business empire he created, the 49-year-old has maintained control of JD.com through voting rights as well as a strategic committee he chairs. The Strategy Executive Committee of JD.com is made of 18 top executives but Liu remains the undisputed decision maker, one of the sources said.
Some of the content from Liu’s internal meetings has been previously reported by local media. According to local media outlet Huxiu, Liu spent one-and-a-half hours lecturing aides, criticising them for using fancy PowerPoint slides to cover up business incompetence.
JD.com did not immediately respond to a request for comment on the matter.
Liu’s sudden display of anger, after stepping down in April to hand over the CEO role to long-time confidant and company veteran Xu Lei, signals his determination to tackle challenges for the firm as the country’s ecommerce industry struggles amid slowing economic growth and Covid-19 related supply chain disruption.
Beijing-based JD.com posted 11% revenue growth in the September quarter, higher than rival Alibaba Group Holding’s tepid 3% growth but lower than budget platform Pinduoduo’s 65%. Alibaba owns the Post.
JD.com’s Nasdaq-traded shares have dropped 12% this year. In comparison, Pinduoduo’s Nasdaq stock has climbed more than 51%.
According to the Huxiu report, Liu was particularly unhappy about the company’s pricing strategy.
“We need to go back to common sense, the five elements of business: product, price, service, cost and efficiency,” Liu told executives in a fourth-quarter management meeting, according to the report.
If JD.com is not able to win over the hearts of consumers, JD.com will become the next Suning.com, Liu warned. Suning.com is a home appliance maker based in Jiangsu Province, where Liu is from, which is currently going through a debt restructuring process.
Li Chengdong, founder and chief analyst at Beijing-based ecommerce consultancy Dolphin, said the reports show that Liu remains in firm control of his business empire. “He is on top of updates and the data from important businesses,” he said. – South China Morning Post