JD.com founder urges employees not to ‘lie flat’ after reaching ‘bottom’

Hong Kong (CNN) — The billionaire founder of Chinese online shopping giant JD.com is rallying the troops and calling for change at his company, even as he blamed himself for “mismanagement.”

Richard Liu, chairman of JD.com (JD), one of China’s largest online shopping platforms, has told employees that the Beijing-based firm is facing major problems and must work to fix them, or “we will have no way out.”

Liu’s comments came just weeks after rival Jack Ma called for change at Alibaba, as the stellar performance of competitor PDD (PDD) — the group behind Chinese online shopping giant Pinduoduo and US-based retail upstart Temu — caused nervousness.

In a post on JD.com’s internal forum on Saturday, Liu responded to an employee comment that had laid out several issues facing the firm, such as how it currently runs promotions and a lack of support for merchants that sell on its platform.

The remarks were reported by Chinese news outlet LatePost. A person close to JD.com confirmed the veracity of the report, including Liu’s comments, to CNN, requesting anonymity as the information was private.

“It can be said that every one of the company’s pain points is a real problem and must be changed,” he said.

“Of course, so many problems are caused by my mismanagement; I very much blame myself,” Liu wrote.

He urged employees to “not lie flat,” a Chinese slang term for rejecting a grueling work culture in favor of pursuing a simple life.

“The organization is big, bloated, and inefficient, and it does take time to change,” Liu wrote, adding that the company’s foundation remained solid.

Liu also thanked the employee, whom he called a “brother,” for their comment.

“I believe we will get out of the bottom. People and companies will go through several peaks and valleys to achieve greatness,” he added. “Let’s work together to change!”

In a statement Tuesday, a JD.com spokesperson said “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.”

Rising competition

Last month, Ma responded in an internal Alibaba forum to employee comments about a rally in the stock of PDD.

In his post, Ma congratulated PDD on its performance, while urging employees to share “more constructive comments and suggestions” in response to fierce competition.

PDD also competes with JD.com, which has long been the second biggest e-commerce firm in China behind Alibaba. Both incumbents have been forced to contend with an especially sharp surge by newer rival, PDD, in recent months as it enjoys soaring sales and profits.

PDD’s stock has skyrocketed 75% so far this year, allowing it to surpass Alibaba in market capitalization for the first time last month, with JD.com trailing at a distant third. Meanwhile, shares of JD.com and Alibaba have fallen 54% and 19% in 2023, respectively.

PDD founder Colin Huang has also catapulted up the rich lists. This year, he was the fastest riser in the Hurun Research Institute’s annual ranking of China’s wealthiest people.

Huang has shot up seven spots to become the country’s third richest person, with an estimated net worth of $37.2 billion, according to Hurun. The institute estimates his wealth has surged 59%, citing “Pinduoduo’s growth domestically and the success of its Temu platform” in the United States.

Conversely, JD has struggled as “consumers increasingly demand value-for-money products, which is not one of [the company’s] strengths,” Chelsey Tam, a senior equity analyst at Morningstar, wrote in a November report.

JD’s stock closed down 3.2% in New York on Monday, following news that it was being removed from the Nasdaq 100 Index, a compilation of the largest non-financial companies listed on that stock exchange.

Liu’s comments came more than a year after he stepped down as CEO of JD.com, following his arrest in the United States on suspicion of rape, which quickly turned into one of China’s most high-profile #MeToo allegations. He settled a lawsuit with the alleged victim last October.

The-CNN-Wire
™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.

— CNN’s Martha Zhou and Juliana Liu contributed to this report.