Finance chief to take over top job at JD in June

Chinese e-commerce giant JD has said that its chief executive officer Xu Lei will retire from the role in June and hand the reins to chief financial officer Xu Ran, a move that industry analysts said coincides with the internet retailer's slowest pace of growth amid fierce competition from local rivals including PDD Holdings Inc and Alibaba Group Holding Ltd.

Xu Lei, who was handed the role by JD founder Liu Qiangdong about a year ago, will retire from his position as CEO due to personal reasons. Xu Lei has been with JD for over a decade in various senior roles and made significant contributions to the company, JD said in a statement on Thursday.

Xu Lei will serve as first chairman of JD's advisory council and continue to participate in the company's project management and strategic planning.

Xu Ran has been CFO of JD since June 2020. She joined the company in July 2018 and oversaw group finance, accounting and tax functions in addition to serving as CFO of JD Retail from July 2018 to May 2020. Shan Su, the current CFO of JD Logistics, will take over as CFO of JD.

The latest change in executive leadership indicates JD's hopes of adjusting its operational strategy and management style, and may shift its focus toward reducing costs and pursuing profitability, said Pan Helin, co-director of the Digital Economy and Financial Innovation Research Center at Zhejiang University's International Business School.

"JD has an asset-heavy model with self-owned inventory and logistics, which leads to relatively high costs and low profit margins compared with other e-commerce platforms," Pan said, adding the Beijing-based tech company is facing heightened challenges and competition amid slowing growth in China's e-commerce sector.

JD reported on Thursday that its net revenues during the first quarter of this year stood at 243 billion yuan ($35 billion), an increase of 1.4 percent year-on-year, which is the company's lowest-ever pace of expansion.

Its net income attributable to ordinary shareholders for the quarter ending March 31 came in at 6.3 billion yuan compared to a net loss of 3 billion yuan for the same period last year. Non-GAAP net income attributable to ordinary shareholders during this period was 7.6 billion yuan, up 88.3 percent year-on-year.

JD's shares surged 7.26 percent on Friday to close at HK $144.8($18.5) on the Hong Kong stock exchange.

Zhuang Shuai, founder of Bailian Consulting and an expert on e-commerce and retail, said the organizational adjustment and reshuffling of JD's senior leadership will likely help the company tap new business opportunities emerging from lower-tier cities and townships by leveraging its advantages in supply chains and logistics.

"The challenge for JD lies in how to maintain the continuous growth of users, revenue and profit while consolidating the company's innovation ability and rapid response capability," Zhuang said.

Chen Duan, director of the Digital Economy Integration Innovation Development Center at the Central University of Finance and Economics, said JD should further consolidate its competitive edge in first and second-tier cities while expanding its footprint in the fast-growing social commerce sector, which means that the customer's entire shopping experience from product discovery to checkout takes place on a social media platform.