JD.com founder says firm is ‘bloated’, as China e-commerce giants face pressure

The founder of JD.com told staff he acknowledged the e-commerce giant was too large and inefficient and vowed to instil change, in response to a staff complaint about problems with the platform amid intensifying competition.

Richard Liu made the comments in an internal staff forum in response to a post by an employee, local media reported. A person with knowledge of the matter confirmed the accuracy of his comments to Reuters on Tuesday.

The unidentified staff member had over the weekend posted a thousand word-long article, criticising JD for having an overly complex promotion mechanism and how its low-price strategy was being implemented haphazardly. Liu then responded, acknowledging problems and saying they were due to his “poor management”.

“The current organisation is huge, bloated and inefficient, and it does take time to change it,” Liu said in his comment, urging staff to join him in changing the company together.

“This is a routine exchange, and it demonstrates our management’s confidence, as well as the entire team’s collaboration, in addressing problems and overcoming challenges,” a JD spokesperson said on Tuesday.
His post comes only a fortnight after Alibaba co-founder Jack Ma similarly responded to an employee post on Alibaba’s intranet exhorting the company to “reform for tomorrow and the day after tomorrow” in the face of increased competition, according to a person familiar with the matter.

Alibaba did not reply to a request for comment on Ma’s post.

JD.com and rival Alibaba have long been China’s top e-commerce firms, but both have seen increasing competition this year from lower-priced rivals PDD Holding’s Pinduoduo and ByteDance’s Douyin as wary consumers, faced with macroeconomic headwinds in China, hold tight to their purse strings.

JD.com, which has announced a strategy focused on offering low prices to draw in customers, has seen its share price decline 50% so far this year, meanwhile PDD Holdings has seen its shares gain 75% in the same period.

Alibaba Group, which is in the midst of the largest restructuring in its 24-year history, has seen its shares lose 70% of their value since a regulatory crackdown initiated in late 2020.