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26. December 2018

JD.com Split Main Site in Three Divisions; Okays Share Buyback Scheme

China’s second largest e-commerce player, JD.com, will restructure its main shopping site and create an office of the chief executive to what the company described in a statement, “better serve its customer-centric strategy.” It also noted that the e-commerce industry is undergoing “tremendous changes after rapid development in the past decade.”

The overhaul will divide JD Mall, the company’s main revenue driver, into three segments, including a unit responsible for understanding customer behaviour and market changes, another to provide services to satisfy customer demands, and a third to handle infrastructure-building, service support and risk management.
The new business segments will report directly to Xu Lei, who took on the role of rotating chief executive for JD Mall last year, in a move considered unusual in a company tightly controlled by founder Richard Liu Qiangdong.
The statement also announced the establishment of a new Chief Executive’s Office to coordinate the company’s major reorganisation and business reforms, without naming members of the office.

JD.com founder Richard Liu
JD.com founder Richard Liu

JD.com’s November revenue went south – signs of a turnaround?
U.S. prosecutors last week announced they would not press charges against JD.com’s founder and chief executive Richard Liu, who was arrested in the U.S. in August after a woman accused him of rape while he was attending a university business programme. Liu was released on December 21 and returned to China hours later after prosecutors said they had insufficient evidence to follow through with charges.
Beijing-based JD.com, which is backed by Walmart, Alphabet’s Google and China’s Tencent Holdings, reported lower-than-expected revenue in November due to increased spending. It also said investment costs in technology and logistics were escalating amid rising competition in China’s online shopping market.
In a related development, the U.S.-listed e-commerce giant announced on December 26 that its board of directors has authorised a share repurchase programme under which the company may repurchase up to US$1.0 billion of its shares over the next 12 months. In a statement, the company said it plans to fund repurchases from its existing cash balance.

Nol van Fenema

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