On May 27th, JD.com announced that starting from July 1, 2024, within a year and a half, JD's annual fixed salary for procurement and sales will be increased from 16 to 20, with no ceiling on performance incentives.
This salary increase measure was also mentioned in a previous internal speech by JD founder Liu Qiangdong. On May 24th, a video of Liu Qiangdong's meeting leaked. Liu Qiangdong stated at the meeting that employees who purchase and sell C1 to C3 have different increases, with a maximum increase of 100%. After announcing a salary increase, Liu Qiangdong said& quot; The best salary and benefits should be given to procurement and sales, as procurement and sales are the frontline of our battle& amp;quot;
While announcing the salary increase measures, Liu Qiangdong stated that the company has stabilized its downward trend, with positive data and profits in April far exceeding expectations. The fighting enthusiasm for the new quarter is igniting.
On the other hand, Liu Qiangdong also responded to JD's recent adjustments in attendance and other aspects, requiring employees to be the best in the industry and never being able to let a large number of employees lie down to sleep.
Over the past year and a half, JD has been continuously adjusting its employee income, business structure, and overall strategy. Liu Qiangdong's latest statement indicates that JD's adjustments are still ongoing.
JD Seeking Change
In addition to salary increases, JD.com has recently adjusted its employee lunch break time and introduced measures such as prohibiting proxy clock ins, which has attracted external attention. A person familiar with the situation told First Financial that the adjustment was indeed a matter of fact. In addition, previous attendance issues were not linked to performance, but if there are long-term attendance issues that violate company regulations, corresponding measures will be taken. From the perspective of caliber, the above adjustments may not be short-term, but they may not last too long. When the new regulations are transmitted to various departments for operation, they may sometimes deform.
Regarding the work attitude of employees, Liu Qiangdong stated in his speech; quot;  If employees have to turn off the lights for two hours a day at noon to get a good night's sleep, and their performance improves, it is impossible for their salaries to increase. If the performance is good, there is no need to work overtime. Employees who work hard but have poor performance will not be dismissed by the company. Any employee who performs poorly and does not work hard will not be tolerated by the company and will be eliminated through various means& amp;quot;
For employees who prioritize life and work, Liu Qiangdong stated that; quot; You're not wrong, but you're not our brother& amp;quot;
In addition to the above measures, JD.com has made various adjustments in the past year.
Before and after Double 11 in 2022, Liu Qiangdong criticized internally that JD.com was losing its low price advantage. Since the beginning of 2023, JD.com has successively launched a low price strategy; quot; Billion subsidies; 9 yuan free shipping; quot; Channels, as well as a series of low price measures such as lowering the threshold for free shipping. In terms of live streaming, the total number of viewers in JD's sales live streaming room exceeded 380 million on Double 11. In order to further expand its presence, JD.com has also collaborated with large-scale events such as the 2024 Spring Festival Gala and Hunan TV Mango TV New Year's Eve Gala.
In terms of architecture, at the beginning of 2023, JD.com will split the original 3C home appliance business group into two and reorganize the three major business units of computer digital, communication, and home appliances into the home appliance and computer communication business groups. At the same time, JD Logistics has adjusted its organization to establish four major business units and cancelled seven regional companies.
In addition, since 2023, JD.com has made multiple personnel adjustments. Last May, Xu Lei, who was then the CEO of JD Group, resigned from the company due to personal reasons, The position of CEO will be held by Xu Ran, the CFO of JD Group at the time. After implementing a low price strategy last year, JD.com has made adjustments to its discount strategy and other aspects. JD.com launched a billion dollar subsidy last year while lowering the free shipping threshold.
In addition, JD.com launched Liu Qiangdong's digital live streaming in April this year, focusing on its content business.
Regarding this, Zhang Yi, CEO of iMedia Consulting, told First Financial that measures such as salary increases and strict attendance regulations to some extent indicate that JD.com is strengthening internal management, enhancing salary and career attractiveness. In the past year, Liu Qiangdong has devoted great efforts to JD's management and internal core aspects, improving efficiency and enhancing the team's combat capabilities, which has been helpful for performance.
The new Q1 financial report shows that JD's revenue reached 260 billion yuan in the first quarter, a year-on-year increase of 7.0%. In the first quarter, JD's net profit attributable to common shareholders of listed companies under non US GAAP accounting standards was RMB 8.9 billion, a year-on-year increase of 17.2%.
External challenges
Before the arrival of 618, JD.com began to adjust again.
Zhang Yi believes that Liu Qiangdong's concerns stem from the challenges of the new platform, and the problems encountered by JD.com are similar to those of Alibaba. From an industry perspective, traditional e-commerce or shelving e-commerce lacks innovation, and companies face aging problems. The mindset of employees is aging, and equality is prevalent. In this context, new types of social e-commerce, such as Tiktok, Kwai, Xiaohongshu and even video numbers, have continued to exert their efforts, which has greatly changed the access channels for consumers to purchase information, and even the marketing strategies and channel construction of upstream manufacturers. This kind of change is difficult for traditional e-commerce to meet the challenge with the original shelf model. The decline of shelf e-commerce is obvious, and the development of social e-commerce can be used to; quot; Like a broken bamboo; quot; To describe.
The e-commerce business of content platforms is rapidly developing. At present, the growth rate of live streaming e-commerce platforms is far faster than traditional e-commerce. The first quarter financial report of Kwai shows that the GMV of e-commerce business increased by 28.8% year-on-year to 288.1 billion yuan, and the monthly active paying users of e-commerce in the first quarter increased by 22.4% year-on-year to 126 million yuan. On the supply side, the number of active merchants in the first quarter of 2024 increased by about 70% year-on-year, mainly due to the sustained activity of new merchants.
Zhang Yi said that relying solely on improving efficiency and internal organizational governance to improve performance is not a good thing for the platform in the long run, because when data continues to grow, people will lose their direction. If JD.com wants to embark on a sustainable development path, it needs to make efforts in innovative models to cope with the challenges from new e-commerce.
For some merchants, the current growth of brands on content platforms far exceeds that of traditional platforms.
Chen Lin (a pseudonym), the founder of a domestic beauty brand that has been established for four years, said to First Finance that in the first quarter of this year, the growth rate of his brand in Tiktok was 30% to 50%. From the overall sales, the overall sales of the brand Tiktok has exceeded the Tmall platform after the Double 11 last year, becoming the platform with the largest sales of tribute. The brand joined JD.com at the end of 2023 and is currently gradually developing on JD.com. Chen Lin believes that unlike shelf e-commerce, Tiktok's traffic attribute can be quickly scaled up. Regarding the upcoming 618 promotion, Chen Lin stated that in terms of support, Tmall's support for the fashion category is higher than that of JD.com.
Another food merchant also said to First Finance that from the perspective of growth rate, the growth of brands in traditional e-commerce platforms can no longer compare with Tiktok. This year, he will focus on Tiktok activities in 618.
While many businesses are shifting their focus to new platforms, others believe that JD's changes are effective.
A sports goods merchant told First Financial that from the perspective of event planning, JD.com has added a platform activity mechanism, including adding merchant super product days and canceling pre-sales and implementing spot sales on Double 11, which will help boost merchant performance. Especially evident is that JD.com is actively expanding its sources of traffic and seeking to collaborate with merchants in offline activities, attempting to feed back online traffic. In addition to self owned brand activities by merchants, they have also started to attract traffic and promote conversion through offline exhibitions and other means. For example, during the IWF period of the Shanghai International Fitness Exhibition in March this year, JD Health's procurement and sales actively contacted the organizers, changing from live streaming in the live room to offline exhibition visits. In fact, they all brought traffic and promoted conversion to merchants, and it can also be seen that the procurement and sales are also breaking through barriers.
In addition, the merchant stated that after prioritizing prices, JD.com has a more competitive advantage. Previously, JD.com Book faced a boycott due to its demand for publishers to participate in the event at a low price. In response to this, JD Book's sales and procurement staff responded on social media on the evening of the 21st, stating that they had received a letter from the relevant publishing house. The employee stated that the starting point is to sell cheaper books to consumers and create profits for partners through small profits and high sales.