China's JD.Com Dangles Carrot, Wields Stick in Battle With Pinduoduo, Video Apps
Lu Hanzhi
DATE:  May 28 2024
/ SOURCE:  Yicai
China's JD.Com Dangles Carrot, Wields Stick in Battle With Pinduoduo, Video Apps China's JD.Com Dangles Carrot, Wields Stick in Battle With Pinduoduo, Video Apps

(Yicai) May 28 -- Chinese e-commerce giant JD.Com will once again raise the salaries of procurement and sales staff but also tighten its office policy to level up as the field is getting crowded with newer platforms, including that of Pinduoduo which more than tripled its net profit in the first quarter.

From July 1, employees in charge of procurement and sales at JD.Com can earn a fixed annual salary of 20 months of pay instead of the earlier 16 months, the Beijing-based firm announced yesterday. Moreover, bonuses have no ceiling.

This is JD.Com's second salary increase in the past six months as the company said late last year that it would double frontline workers' pay, including that of sales and procurement staff.

Another way that the long-standing competitor of Alibaba Group Holding is responding to the increasingly fierce competition is by adding office rules.

A video that started circulating online recently shows that Chairman Richard Liu said in an internal meeting that workers' noon break will be cut shorter. He also said that the company will enhance attendance management and ban workers from clocking in their colleagues. JD.Com cannot tolerate a single employee who has poor performance and does not work hard, Liu said in the video. The firm will get rid of these underachievers through various means, he added.

In the past year, Liu made a lot of effort to enhance operating efficiency and team resilience to improve the company's performance, Zhang Yi, chief executive at consultancy iiMedia Research, said to Yicai.

Zhang said that Liu's concerns mostly stem from rising newcomers. Short-video platforms Douyin and Kuaishou, as well as social commerce platform Xiaohongshu, are expanding into e-commerce, impacting consumers' shopping habits and sellers' marketing strategies. On the other hand, established e-commerce firms' innovations are insufficient and their workers are lazy and hidebound, he added.

In the first quarter, JD.Com increased its net profit by 14 percent to CNY7.1 billion (USD979.7 million) from a year ago while revenue climbed 7 percent to CNY260 billion (USD35.9 billion). In comparison, Pinduoduo, which operates Temu, boosted its net profit by almost 250 percent to CNY28 billion (USD3.9 billion) as revenue doubled to CNY86.8 billion.

Editor: Emmi Laine

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Keywords:   JD.Com,Liu Qiangdong,Salary Increases,2024,e-commerce,Alibaba,Pinduoduo,Temu,remuneration,office policy,management