Jingdong.com Chairman: "Company is Overgrown and Inefficient... Must Change to Survive"

Stock Price Halved Since Early Year... Surpassed by Emerging Pinduoduo
Market Cap Less Than One-Fourth of Pinduoduo's

R Liu Changdong, founder of Chinese e-commerce company JD.com, pointed out inefficiencies in organizational management and emphasized the need for business innovation. His remarks came amid a situation where the company's stock price has halved in about nine months due to sluggish consumer demand in China and delayed improvement in company performance.

According to local media including China’s First Financial Daily on the 10th, Liu posted on the company intranet the day before, stating, "The organization is huge, bloated, and inefficient. It takes too much time to change." He added, "(There are) many problems in the company, but it is all due to my lack of management," emphasizing, "I blame myself, but no matter what happens, I will never give up."

Ryu Chang-dong, Chairman of Jingdong.com (Photo by Baidu)

He continued, "We say every day that the customer comes first, but at work, we always think of ourselves (first)," and criticized, "We say we must be number one in battle, but we are always defensive." Liu also asserted, "I believe JD.com will definitely get out of the bottom," emphasizing, "Any company becomes great only after experiencing several highs and lows."

The "bottom" he referred to also signifies the company's stock price. JD.com’s stock price, listed on the Hong Kong Stock Exchange, closed at HKD 104.8 (approximately KRW 17,653) on the 8th, down by half compared to the early-year reopening optimism (January 27, HKD 248). Amid delayed performance improvements in retail companies due to sluggish Chinese consumption, JD.com’s stock price is showing a noticeable decline as it loses market share to emerging competitors such as Pinduoduo, operated by the eight-year-old big tech company PDD Holdings.

JD.com’s stock price, also listed on the U.S. Nasdaq, fell 58% to $26.54 on the 8th compared to the same period (January 27, $63.74). This is a level similar to the major setback in 2018 when Liu was investigated in the U.S. for sexual misconduct allegations. JD.com’s market capitalization stands at $41.6 billion (approximately KRW 54.7 trillion), less than a quarter of Pinduoduo’s $184.6 billion.

[Image source=Reuters Yonhap News]

In October, Macquarie downgraded JD’s Hong Kong stock investment rating to neutral and lowered the target price to HKD 124. Morgan Stanley also cut the target price for JD.com’s American Depositary Receipts (ADR) to $33. Earlier, JD.com reported group revenue of 247.7 billion yuan for the third quarter, marking only a 1.7% increase year-on-year.

Earlier, Alibaba founder Jack Ma also recently praised the latecomer Pinduoduo and encouraged employees to return to their original intentions. He released an internal memo to employees, stating, "I firmly believe Alibaba will change and adapt. Every great company is born in winter." He added, "Only those willing to change for the future and pay any price for such goals can be respected. Let’s return to our mission and vision."

PDD Holdings, which has put pressure on the two giants of China’s e-commerce market, Alibaba and JD.com, operates Pinduoduo and the overseas shopping app Temu. In its third-quarter earnings report, the company recorded a revenue growth rate of 94%, overwhelming Alibaba’s 9% and JD.com’s 1.7%.

This content was produced with the assistance of AI translation services.