JD.com Announces Employee Pay Raise by 14% for the Next Two Years in Show of Strength
On July 13, JD.com, a leading online retail organization in China, announced that it would hike employees’ annual salaries by 14% over the next two years to showcase its financial strength at a time when the majority of its rivals continue to struggle with regulatory scrutiny. In a short notice published on the company’s WeChat social media platform, the organization said it would raise average employee salaries from 14 to 16 starting July 20121 to July 2023. As of March, this Beijing-based had about 370,000 workers, after hiring 100,000 more up to December 2020. It made this move to boost employee morale. Nevertheless, this move has sparked a hot debate on Chinese social media platforms. Netizens questioned why the organization decided to raise the employee pay at a time like this when pay increment rates have significantly dropped. As China’s National Bureau of Statistics indicates, average salaries increased by 4.3% in 2020, but this growth reached 12.4% in Q1 2021.
According to media reports, although this increment might not cover all the employees, this move contrasts what this online retail giant experienced two years ago when Richard Liu Qiangdong, the company’s founder and CEO, said that the delivery drivers would get paid depending on the number of deliveries they made. At the time, the company experienced financial struggles after Liu got detained in Minneapolis for defiling a Chinese student. Although the police eventually dropped these charges, this scandal continued to affect the business.
When the COVID-19 pandemic hit, this e-commerce came back with double sales growth as most people shifted to online shopping for everything from luxury goods to groceries. During the first quarter of 2021, the company’s net revenue increased to 203.2 billion yuan ($31.57 billion), a 39% year-on-year increase. Correspondingly, net profit attributable to the shareholders reached 3.6 billion yuan, a 227 billion increase from 1.1 billion yuan in the past year. In a letter issued to investors when the company had celebrations for its 18th anniversary, Liu attributed its success to the employees and asserted that the company was responsible for making the employees happy. Therefore, the company made this move to attract and retain talent and stabilize some workers who intended to leave.
Established in 2004 in Beijing, JD.com is one of China’s leading online retail companies and the biggest e-commerce organization by revenue. This e-commerce giant stands out from its rivals due to its commitment to quality, authenticity, and diverse product offering, from electronics to cosmetics to clothing to fresh foods. With its extensive network across China, the organization offers exceptional same-and-next day delivery services, serving about 1 billion clients. Its cutting-edge retail infrastructure allows customers to purchase what they want, wherever and whenever they need it.
Most consumers acclaim this company for offering high-quality products. The organization implements a zero-tolerance approach to ensure the delivery of genuine products to its customers. The use of direct sales as the business model and a marketplace that limits the number of sellers enables the company to assume total control of the supply chain and maintain quality oversight. This e-commerce giant is a perfect partner for international and local brands that target Chinese clients online. It offers various services to help other brands enter the Chinese market, including big data analytics, marketing, consumer targeting, financing, and logistics and warehousing. As a technology-driven company, this organization develops scalable and reliable platforms that add value to investors and customers in segments like internet finance, logistics, e-commerce, cloud computing, and innovative technology. The organization operates through two primary business segments: New Businesses and JD Mall. The New Businesses sector includes logistic services offered to third parties, overseas businesses, insurance, technology services, and O2O. On the other hand, the JD Mall denotes the company’s key online retail business. This company also offers a virtual marketplace where third-party sellers sell goods to clients primarily via its mobile app and website.