On the afternoon of January 11, JD.com Group Chairman and CEO Liu Qiangdong sent an internal email announcing that JD Mall will establish three business groups: Big FMCG, Electronics & Entertainment, and Fashion & Lifestyle, appointing Wang Xiaosong, Yan Xiaobing, and Hu Shengli as presidents of the respective groups, who will also be promoted to Senior Vice Presidents of JD.com Group.
In the internal email, Liu Qiangdong stated that in 2017, JD.com Group formally established its boundaryless retail strategy, actively transforming into a provider of retail infrastructure, moving from "integration" to "integrated openness." To serve customers' ever-changing needs and an open ecosystem, JD's organization needs to become more flexible and agile, evolving into a building-block organization. This structural adjustment is to align with strategic needs.
Liu Qiangdong said this structural adjustment will bring about three changes: first, it will create highly modular synergies among related businesses within the three business groups, truly shifting from a procurement-sales integration and SKU-centric model to a user (customer)-centric and scenario-centric model; second, it will delegate authority forward, reducing communication costs and decision-making cycles, quickly responding to and meeting customers' personalized needs, "letting those on the front line who hear the gunfire make decisions," and enhancing bottom-up innovation awareness; third, it will significantly improve resource utilization efficiency, strengthen refined operations, maximize customer experience, and solidify future core competitiveness. Liu Qiangdong will also devote more time to focusing on and developing JD's technology business, driving JD's resolute transformation toward technology.
The following is the full text of Liu Qiangdong's email:
Dear Brothers,
The past 2017 can be described as a milestone year in JD Group's development history, connecting the past and the future. Not only did we achieve our targets of exceeding 100 billion yuan in both the 618 and 11.11 promotional seasons, but the entire JD Mall's annual GMV also crossed the trillion-yuan mark ahead of schedule. At the same time, our logistics sub-group officially began independent operations, and JD Finance achieved profitability in a single quarter. On the path of technological transformation, our artificial intelligence, big data, and cloud computing businesses have attracted top international experts and talents, moving steadily and forcefully toward the future.
More importantly, with the rapid development of our group's various businesses, we formally established the strategic blueprint of boundaryless retail in 2017, actively transforming into a provider of retail infrastructure with an open, symbiotic, and win-win attitude. This marks JD Group's shift from "integration" to "integrated openness," hoping to comprehensively export our supply chain capabilities, logistics capabilities, data capabilities, marketing capabilities, financial capabilities, and technological capabilities accumulated over many years in modular, platform-based, and ecosystem-based forms, providing society with "Retail as a Service" solutions. This is a huge strategic transformation for JD. 2017 is both the first year of boundaryless retail, the first year of JD's technological transformation, and the first year of JD's openness.
To serve customers' ever-changing needs and an open ecosystem, JD's organization needs to become more flexible and agile, evolving into a building-block organization. Our business units and modules need to be flexibly assembled and stacked like building blocks to meet the different preferences and needs of internal and external customers. Since the first half of 2017, the group has actively adapted to new capability requirements through organizational changes, first completing structural adjustments to the functional platform, marketing platform, and R&D platform. The most direct effect after the adjustment is that business requirement realization and efficiency have both improved significantly.
Today, we will continue the construction approach of the building-block organization and upgrade the business unit system at the front end of the mall, as follows:
Establish the Big FMCG Business Group, consisting of the Fresh Food Business Unit, Consumer Goods Business Unit, and New Channel Business Unit. Wang Xiaosong will serve as President of the Business Group, with current business unit presidents and business leaders reporting to Wang Xiaosong;
Establish the Electronics & Entertainment Business Group, consisting of the Home Appliances Business Unit, 3C Culture & Tourism Business Unit, and Global Sales Business Department. Yan Xiaobing will serve as President of the Business Group, with current business unit presidents and business leaders reporting to Yan Xiaobing;
Establish the Fashion & Lifestyle Business Group, consisting of the Home & Lifestyle Business Unit, Fashion Business Unit, TOPLIFE, and Paipai Second-hand Business Department. Hu Shengli will serve as President of the Business Group, with current business unit presidents and business leaders reporting to Hu Shengli;
Each business group will integrate the internal platform support functions of its subordinate businesses and establish "small platforms" for all businesses within the business group. While quickly responding to front-end business needs, they will efficiently coordinate with the group's major platform systems to provide strong support for the overall business of each business group;
The above three business group presidents will also be promoted to Group Senior Vice Presidents (SVP), reporting directly to me. In the future, all new domestic businesses will be classified into the above three business groups according to business attributes.
This organizational change has three main purposes: first, to create highly modular synergies among related businesses within the three business groups, truly shifting from a procurement-sales integration and SKU-centric model to a user (customer)-centric and scenario-centric model; second, to delegate authority forward, reduce communication costs and decision-making cycles, quickly respond to and meet customers' personalized needs, "letting those on the front line who hear the gunfire make decisions," and enhance bottom-up innovation awareness; third, to significantly improve resource utilization efficiency, strengthen refined operations, maximize customer experience, and solidify future core competitiveness. In addition to the above three points, we are also pleased to see that after years of cultivation and training, the group has produced a large number of business leaders and industry elites. Facing rapidly changing market conditions, they have sufficient ability to take on more and greater missions and responsibilities, and their growth will also allow me to devote more time to focusing on medium- and long-term strategic directions, especially focusing on and developing the group's technology business, driving the entire group's resolute transformation toward technology.
All the past is a prologue! At the beginning of the new year, I expect the three business group presidents to lead their respective teams, based on industry development, collaborate with upstream and downstream partners in the industry chain, jointly create an industrial pattern of "symbiosis, regeneration, and mutual growth," and achieve inclusive growth in the industry! I also hope that all brothers in the group will maintain an open mindset, focus on the future, embrace change, innovate and break through, so that the vision of "boundaryless retail" can be realized faster and the lives of hundreds of millions of users can be better!
Your Liu Qiangdong January 11, 2018
Source: Tencent Finance -END-