Xu Lei succeeded in taking over the baton, and Liu qiangdong was elated

On August 17, JD released its latest quarterly financial report. In 2020, Q2 achieved a net income of 2011 billion yuan (about US $28.5 billion), with a year-on-year increase of 33.8%. The growth rate reached a new high in nearly 10 quarters, and the revenue reached a new high in more than two years. At the same time, the net profit of shareholders increased by 16.44 billion yuan to RMB 17.44 billion in the same period of last year. < p > < p > 2011 billion yuan of revenue, creating a new record of China’s retail and Internet industry revenue in a single quarter. Even in the global technology Internet companies, this figure is among the best – only Amazon (Q2 total revenue of 88.9 billion U.S. dollars), apple (Q2 revenue of 59.7 billion dollars), Google, Microsoft (the same is 38 billion dollars) and other small technology giants, the revenue exceeds Jingdong. < p > < p > Jingdong has returned to the track of rapid growth and become a big winner, which makes Liu qiangdong very satisfied: “I am very grateful to the employees and business partners of Jingdong. With the joint efforts of all of us, Jingdong group achieved steady performance in the second quarter and realized the accelerated growth of revenue. ” < / P > < p > for Liu qiangdong, the good performance not only proves that Xu Lei, CEO of Jingdong retail group, succeeded in taking over, but also makes Jingdong and itself completely away from the “dark moment” in 2018. Just as on May 22 this year, when he sent an internal letter to the old staff day of Jingdong, he explained “who is Jingdong” in nearly 7000 words, saying: “when there is no rebellion in adolescence, the prodigal son will not change his money, and we will have no complaint or regret!” < p > < p > in an open letter in May this year, Liu qiangdong admitted that after listing in 2014, there were problems in JD’s business and management. Finally, internal and external conflicts broke out in 2018, and JD came to the “dark moment”. < / P > < p > in 2018, in the face of the disappearance of Internet dividends and e-commerce dividends, the double attacks of Taobao and pinduoduo, and the “black swan incident”, from the beginning of the year to the end of the year, the share price of JD dropped to nearly $19, the growth rate of revenue was less than 30% for the first time in nine quarters, and the number of active users declined for the first time since its listing in 2014. The morale of Jingdong was once very low. < p > < p > at the Q3 financial report meeting of that year, Liu qiangdong stated that he wanted to adjust his personal role. The Jingdong management team has been stable and formed. In the future, he will focus on new business, focusing on four things: strategy, culture, team and new business. < p > < p > a few months later, Jingdong Mall carried out an important structural adjustment. The key points of the adjustment are as follows: first, reduce the reporting level and flatten the organization; second, build a large middle platform. At the same time, Xu Lei was promoted to serve as CEO on duty in front of Taiwan, and the three internal business groups of Jingdong changed to report to Xu Lei. < p > < p > on January 23, 2019, under the leadership of Xu Lei, Jingdong has upgraded Jingdong Mall to a retail sub group, forming Jingdong group together with Jingdong Logistics and Jingdong Shuke. < / P > < p > change continues. At the opening management meeting a month later, Liu qiangdong said at the meeting that Jingdong was faced with many problems such as “overstaffing and ganging up” in the development of its organization, and announced that Jingdong would implement the system of eliminating the last senior executives, accounting for 10%. “You are not my brother! I have no choice! ” < p > < p > Liu qiangdong said that he would launch the plan of cadre rejuvenation: in the next 3-5 years, 30% of senior executives at or above the VP level will be the post-85s and post-90s. The former Cho Longyu, CPO Lanye and CTO Zhang Chen left successively. Wang Xiaosong, President of 7fresh, and Hu Shengli, President of fashion life business group, were also transferred from their original posts. < / P > < p > with the drastic changes of Jingdong in terms of organization, business and personnel, Liu qiangdong’s external image has also appeared a watershed – before September 2018, in the eyes of the outside world, he was the eldest parent and the only spokesperson, that is, Jingdong. After that, Liu qiangdong rarely appeared in the public view, retreated behind the scenes, and missed many heavy activities, including the 618 Mid Year Shopping Festival in 2019 and 2020. < p > < p > in the past two years, Liu qiangdong has made few public appearances. First, in the middle of 2019, we will take our team to Tibet market to promote the establishment of a special warehouse, logistics and distribution warehouse in Lhasa. Second, Kunshan daily, published in the middle of July and on July 16 this year, reported that Wu Xinming, Secretary of the Kunshan municipal Party committee of Jiangsu Province, met with Liu qiangdong, chairman and CEO of Jingdong group, and both sides had in-depth exchanges on deepening cooperation. < / P > < p > even when Jingdong landed on the Hong Kong Stock Exchange on June 18 this year, members of the Strategic Executive Committee of Jingdong group made a collective appearance, and Liu qiangdong did not appear at the bell ringing scene. However, it is not uncommon for the founder to ring the bell. When pinduoduo officially landed on the Nasdaq market in 2018, Huang Zheng did not go to the United States to ring the bell: “listing is a process, ringing the bell is a form, it does not affect the essence, and it won’t matter if I strike it.” < p > < p > in addition to being extremely low-key, Liu qiangdong frequently retired from important positions in Jingdong business empire. According to the incomplete statistics of enterprise investigation, in 2020 alone, he resigned as the legal representative, chairman or other senior management personnel of more than 200 Jingdong departments. < / P > < p > the most important thing is that in April this year, he left his post as the legal representative, executive director and general manager of Beijing Jingdong Century Trade Co., Ltd., the main operating body of JD, and the posts of relevant companies such as JD logistics and JD cloud computing. According to the latest news, Liu qiangdong resigned as the general manager of Jiangsu Shengkai Century Investment Co., Ltd., Jiangsu Rongxin Shijia Investment Co., Ltd., Jiangsu Rongchang Investment Co., Ltd., and Jiangsu Haocheng Century Investment Co., Ltd. All four companies are wholly owned subsidiaries of Jingdong group. For Liu qiangdong’s frequent resignation, the general view is that in order to change the previous impression that “Jingdong is the company of Liu qiangdong”, and to dilute his personal color. More importantly, the enterprise has developed to a certain stage, and its management style and development mode need to be changed. This is actually the common wisdom of business tycoons. On July 1, 2020, Huang Zheng sent a letter to all staff, saying that Chen Lei, the former CTO of the company, would be the CEO, while Huang Zheng would continue to be the chairman of the board. This has also been interpreted by the outside world as Huang Zheng is playing down the company’s personal color and does not want to be the richest man. < / P > < p > so far, along with Ma Yun, who has long retired, the founders of the three major domestic e-commerce platforms have all retired behind the scenes, and all of them have been taken over by “No.2 figures”. For Liu qiangdong, who has been struggling with decentralization and power recovery before 2018, the “dark moment” has only prompted him to make up his mind to devolve his power to the background. < / P > < p > quite coincidentally, as the new leader of Ali, Zhang Yong succeeded Ma Yun, and his most important contribution was to create the miracle of tmall double 11; Xu Lei was able to take over Liu qiangdong, and his main contribution was to create Jingdong 618, which made Jingdong have its own Carnival. < p > < p > a person familiar with Xu Lei once said that among the top executives of Jingdong, Xu Lei, who likes playing football, does not want to be bound by rules and regulations. His speech style is more frank and pragmatic, and he is not afraid of problems. Most of the people who had contact with him described him as “the lake and the river” and “loyalty”. < / P > < p > the brilliant financial report of Q2 in 2020, especially the net profit of 16.4 billion yuan (the net profit of non GAAP was 5.9 billion yuan, a record high), which made many media use praise words. For example, the title of 36 krypton was so simple and direct: “it’s easy for Jingdong to make money” – to some extent, this is a compliment to Xu Lei. < / P > < p > compared with revenue growth, it is not surprising that the outside world pays more attention to net profit. For example, pinduoduo, although its market value and revenue have been growing, has been losing money. Therefore, the outside world has been questioning whether there is any problem with pinduoduo’s model and strategy. < / P > < p > for Jingdong, it also has no shortage of money. It has a lot of cash reserves and free cash flow on its books. What it lacks is also a growing net profit. It has been in a loss state before 2018, with a loss of 12 million yuan and 2.801 billion yuan in 2017 and 2018 respectively. Until the net profit of RMB 11.890 billion is realized in 2019, it is the first annual profit at the age of 22. Therefore, the year 2020 will become particularly critical, especially in the critical period of the epidemic. It will prove whether Jingdong, led by Xu Lei, can make money in a flash in the pan or maintain sustained growth. < p > < p > to some extent, under the leadership of Xu Lei, Jingdong realized the achievements that Liu qiangdong had not achieved in his own time: in addition to the net profit, the gross profit of JD Q2 was 28.6 billion yuan, and the operating profit was 5 billion yuan, both of which were historical highs. As many media have said, at least from the book, Jingdong seems to be a company that continues to make money. < p > < p > on January 19, 2019, Xu Lei, who made his debut as CEO of Jingdong Mall at the most critical juncture, used 5000 words to talk about the problems of Jingdong and how Jingdong should solve them: “there are problems in our organizational ability and behavior mode: the customer first values are rarely interpreted, only KPI theory and the culture of” pay numbers “are prevailing, and the Department walls are getting higher and higher Unified business logic, more and more slow response to external changes, arrogant to customers. ” < / P > < p > since then, he asked all the senior executives and employees of Jingdong to “only rely on the truth, not on the top, and work according to the business philosophy, not the orders of the superior.” There are four changes: from the simple pursuit of numbers to the pursuit of quality growth; from the goods centered to the customer-oriented; from the vertical and vertical integration structure to the building block front, middle and back office; and the talent incentive orientation from creating numbers to creating value. In terms of performance, Jingdong broke through RMB 2 trillion (total transaction volume) for the first time in 2019, with a net income of 576.9 billion yuan, a year-on-year increase of 24.9%; and a net profit of 12.2 billion yuan, a year-on-year increase of 589%. In terms of market value, its share price has climbed from US $19.21 to US $69.18 this year, a record high, and its market value once exceeded US $107 billion (about 741.6 billion RMB). < p > < p > Jingxi’s new model for wechat ecology, especially for women and low-end markets, is a sinking market once ignored by Jingdong. This has become the key to Jingdong’s return to growth – according to Jingdong’s previous data, Jingxi accounted for 40% of the new users of Jingdong. The latest data also shows that as of June 30, 2020, JD has added 30 million new users in a single quarter, with a growth rate of 30% year-on-year, reaching a new high in nearly 11 quarters. Questmobile data shows that during 618, nearly 68% of the users who newly installed Jingdong app came from the third tier cities and below; Jingxi’s own new users increased by more than 100% month on month, and 70% of all new users came from the 3rd to 6th line months. Xu Lei called out the slogan of “in the next three years, we will rebuild a Jingdong retail in the sinking Xinxing market”. In the latest financial report teleconference, Xu Lei also said that the sinking market in the second half of the year is still one of the focuses of JD. In the future, the ARPU (average income per user) value of this part of users will be improved through the interests of commodity members and the operation of members. < / P > < p >, Alibaba and NetEase. On the same day, Jingdong Hong Kong shares rose 3.5% to close at HK $234. It was Xu Lei’s highlight. < p > < p > looking back, Jingdong, led by Xu Lei, has seen more significant changes in the past two years, in addition to creating peaks in performance, users, stock price and market value,