Richard Liu, the founder of Chinese e-commerce giant JD.com Inc., stepped down as chief executive officer on Thursday, making him the latest technology-sector billionaire to leave his post amid Beijing’s tougher regulatory environment.
The Beijing-based online retailer said Xu Lei has been appointed to succeed Mr. Liu, who is also known by his Chinese name Liu Qiangdong. The Thursday announcement caps a leadership transition set in motion last year, when Mr. Xu, the former head of JD.com’s retail arm and a company veteran of more than a decade, was made president.
The company said at the time that Mr. Xu’s promotion would allow Mr. Liu to step back from JD.com’s day-to-day operations and focus more on longer-term strategy.
Mr. Liu, who remains as chairman of the board, founded JD.com in 2004 as an online sales platform for electronics goods. Since then, the company has grown into an e-commerce giant with more than $100 billion in annual revenue.
Mr. Liu’s departure follows that of many of his peers within China’s internet industry. In the past two years, Colin Huang, founder of e-commerce rival Pinduoduo Inc., and Zhang Yiming, who started TikTok parent company ByteDance Ltd., have relinquished their positions to trusted deputies.
Among the most prominent Chinese internet startups of the past two decades, only Pony Ma of social media and gaming juggernaut Tencent Holdings Ltd. and Robin Li of search engine Baidu Inc. remain as founder-CEOs.
Few analysts were surprised by Mr. Liu’s move, adding that he has been stepping away from day-to-day operations for more than three years.
“Every company has to grow out of their founder at some point," said Bo Pei, an equities research analyst at US Tiger Securities in New York. “They have been planning this for a while, so I don’t think there’s going to be anything that changes materially."
Still, they said Mr. Liu remaining as chairman of the company was an indication he isn’t giving up control. Mr. Liu still holds a sizable stake in the company that, even after adjustments for a planned charitable donation of shares, amounts to about 12% of JD.com’s ordinary shares and 73% of its voting rights, according to a February filing with the Securities and Exchange Commission.
Mr. Xu, whose roles in the company have included chief marketing officer and head of JD Wireless, will also join the board of directors as an executive director. People who know Mr. Xu have described him as a disciplined manager who is strict with his employees, traits that they say Mr. Xu may have inherited from his father, a soldier in China’s People’s Liberation Army. The 47-year-old Mr. Xu loves rock music, pop culture and soccer, the people said.
The new CEO has also been credited by the company with helping create JD.com’s annual June 18 online shopping festival, similar to Amazon’s Prime Day. The company created its midyear shopping event to counter competition from its main rival, Alibaba Group Holding Ltd., whose “Singles Day" shopping event in November gave it a large promotional edge over JD.com. When JD.com listed its shares in Hong Kong in a secondary listing in June 2020, Mr. Xu was the most senior executive present and gave a speech.
JD.com’s share listings on Nasdaq and in Hong Kong made Mr. Liu, 49, one of China’s richest men, with a net worth of almost $13 billion as of April 7, according to Forbes.
But Mr. Liu has kept a low profile in recent years, delegating more company responsibilities to subordinates after a high-profile incident in August 2018, when he was accused of sexual assault by a university student in Minnesota.
Authorities in Minneapolis closed the case in December that year, citing evidentiary problems in declining to charge him. Mr. Liu has consistently denied wrongdoing.
Before 2018, Mr. Liu had been known as a manager who weighed in on many company decisions. That created problems during his legal troubles in 2018, when according to the company’s bylaws, the board was blocked from holding formal meetings without Mr. Liu’s presence or unless he recused himself.
In 2018, JD.com set up a Strategy Executive Committee under the oversight of its board of directors, allowing Mr. Liu to delegate responsibility to business-unit leaders and creating more of an environment of collective decision-making, according to people familiar with the matter.
In the past, operational decisions couldn’t be taken if Mr. Liu opposed them, the people said. Now, Mr. Liu voices his opposition—but also takes into consideration the views of other executives, and gives them the final say, they said.
A JD.com spokeswoman didn’t comment on Messrs. Liu and Xu’s management styles.
Mr. Xu takes over a company facing rising economic headwinds, as China’s continuing virus controls weigh on consumer sentiment for a third straight year.
JD.com has also been swept up in a campaign by Chinese officials to clean up anticompetitive and other undesirable practices in the Chinese internet sector. Since December 2020, JD.com has been fined by market regulator for mispricing products online and for not properly reporting corporate mergers to authorities.
As of the end of trading on Thursday, JD.com’s Hong Kong-listed shares are down more than 17% so far this year, roughly in line with Hong Kong-listed technology stocks.
This story has been published from a wire agency feed without modifications to the text
