JD.com (NASDAQ:JD), which has emerged as a potent rival to e-commerce giant Alibaba Group Holdings, Inc. (NYSE:BABA) is seeing a change of guard at the helm.
What Happened: Beijing-based JD.com said the baton has been passed from founder chairman and CEO Richard Liu to longtime company executive Lei Xu, with the transition taking immediate effect. Xu will also join the company's board.
The announcement did not come as a surprise: JD.com announced last September that Liu intends to focus away from the day-to-day running of the company to long-term strategic planning. A new position of president was then created and Xu was named to the role.
The inevitable announcement came on Thursday. This is in line with the trend seen among high profile companies in China and overseas, where founders give way to lieutenants who are groomed over the years for this purpose.
Another case in point is Alibaba, where founder Jack Ma gave up the role of CEO in 2013 and eventually eased out of the company in 2018.
JD.com said Liu will remain as the chairman of the board, mentoring "younger management, and contributing to the revitalization of rural areas.
"I believe that JD has built a strong footing in the industry with sound management structure and a large number of excellent business leaders," said Liu in a statement.
"I'll devote more of my time to JD's long-term strategies and future drivers as we continue to work on the most challenging yet valuable things."
Related Link: Alibaba Vs. JD.com: Who's Winning The Chinese E-Commerce Battle?
About Xu: Xu, who is taking over as CEO, has been with JD.com for over a decade. He is being credited for the company's resilience amid the evolving external environment. Before being promoted to the role of president, Xu functioned as the CEO of JD Retail, chief marketing officer of JD.com, head of JD Wireless and head of marketing department.
Xu oversaw several growth initiatives at the company. Most noteworthy among these were the development of supply chain middle platform and omni-channel strategy, and the company's mobile-based strategic transformation.
Signaling business continuity, the new CEO said he shares the founder's business philosophy and commitment and will continue to create value to the company's users, business partners and the society.
"Together with the leadership team, I will further build on that and drive high-quality and sustainable growth of the company going forward," he added.
Xu has his task cut out for him. He is assuming the unenviable task of steering the retailer through challenges that include a continuing domestic regulatory crackdown, slowing domestic economic growth that has hurt consumer spending and sentiment and intensifying competition.
JD Price Action: JD.com shares were down 1.3% at $58.30 in premarket trading on Thursday, according to Benzinga Pro.
The levels are a far cry from the stock's all-time high of $108.29 hit in mid-February 2021, a period when Chinese regulators began a wider crackdown on high-profile tech companies.
Related Link: JD.com Raises $3.87B In Hong Kong Listing: Report
Photo courtesy of JD.com
