JD Retail Initiates Major Organizational Transformation

Leading Chinese e-commerce company JD.com‘s retail business is undergoing a major organizational change to respond to development in the increasingly competitive environment. The change is being personally led by Richard Liu, the founder and chairman of JD.com, according to a report by 36Kr on April 11.

The report shows that JD Retail established its latest organizational structure at an operational management meeting on April 9. The main points of this structure include:

• JD Retail will abolish the business group system and adopt a business unit system instead; former heads of each business group will become heads of their respective business units.
• Units under the former business group will be split into specific operating units based on subcategories. Unit managers will have more decision-making rights as well as those regarding personnel appointments and dismissals.
• Within these newly formed operating units, there will no longer be any distinction between third-party store operations and JD’s own operations. Both models will be fully integrated under unified unit managers for further equalization of traffic.

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This marks JD Retail’s largest organizational restructuring since its upgrading from a departmental system to a business group system in 2018. It also represents the first time that JD.com has truly integrated self-operated businesses with third-party-operated businesses since entering this field.

According to insiders familiar with the matter, this high-level executive meeting led by Richard Liu had extremely strict confidentiality measures in place, and only core executives from JD.com and JD Retail were involved. This organizational change has been planned since Liu returned to frontline operations at the end of last year and was intensively discussed during Q1 of this year before finally being implemented last weekend.

Currently, JD Retail includes five major categories: home appliances & furnishings, digital products, supermarket, life services, fashion & luxury goods – along with independent divisions such as local retailing and enterprise services. After this reorganization takes effect, all five category heads will become division heads who will continue to report to JD Retail CEO Lei Xu. Business unit heads will report directly to their respective division heads.

According to a report by The Paper, another JD.com insider disclosed that this organizational change will not involve personnel optimization, and similar structural adjustments are expected to be taken within other businesses under the JD Group, such as JD Logistics.