After Alibaba, Bytedance and Pinduoduo, it is JD.com’s turn to see its management restructured in the context of repressive measures by the Chinese Communist Party aimed at regaining control of its tech nuggets.
Chinese e-commerce giant JD.com announced on Monday, September 6, 2021 that its founder and CEO Richard Liu (real name Liu Qiangdong) will step back to “devote more time to the long-term strategies of the company”. This estrangement involves splitting up the CEO function at JD.com and creating new roles.
Xu Lei, until now managing director of JD Retail, the company’s largest branch, becomes president of JD.com. Xin Lijun, who previously headed the JD Health subsidiary, becomes general manager of JD Retail, while Jin Enlin, previously responsible in the JD Health branch, takes over the general management. Richard Liu therefore retains his role of managing director of the firm, as well as a seat on the board of directors, but in addition to his work on “Long-term strategies”, his time will also be devoted to “Advise young leaders” and to “Revitalize rural areas”.
Fourth withdrawal in a few months
This is the fourth withdrawal of a Chinese tech executive in a few months. The most striking, that of Jack Ma, founder of Alibaba, another Chinese e-commerce giant, triggered the start of a series of repressive measures by the Chinese government and Xi Jinping, head of state and secretary general. of the Chinese Communist Party (CCP), against its technological nuggets.
In September 2020, the CCP declared that it wanted to end “The disorderly extension of capital”, while Xi Jinping called on local officials and officials to “To unify the members of the private sector around the party and to improve the promotion of the healthy development of the market economy”. In October 2020, Jack Ma gave a speech announcing that Ant Group (formerly Ant Financial), Alibaba’s fintech subsidiary to go public a few days later in Hong Kong and Shanghai, would revolutionize the Chinese financial system. . A system that Jack Ma also called for reform. However, this speech did not please Beijing at all, which decided to act severely and do everything possible to regain control of its banking system.
Thus, Jack Ma’s speech was followed by a summons by the authorities and the cancellation of the IPO of Ant Group. The businessman also mysteriously disappeared between November 2020 and January 2021, only to emerge in a video singing the praises of the CCP. A record financial penalty of $ 2.8 billion also followed, which would cause a record quarterly loss for the group, as well as a restructuring of the latter (Alibaba recently held about 33%) by separating Alipay, its app. payment, credit activities. Discussions would have also taken place from January to March 2021 between representatives of the Chinese Central Bank and the national antitrust regulator and, separately, Jack Ma and the shareholders of Ant Group about a sale of the shares of the entrepreneur in the group. The authorities had also opened an investigation into a supposed monopoly position of Alibaba.
Beijing’s new regulatory arsenal
Richard Liu’s removal from the top of JD.com also follows the departure from their leadership roles of Colin Huang, founder of e-commerce platform Pinduoduo, in March 2021, and Zhang Yiming, co-founder of ByteDance, the house. mother of TikTok, in 2020. The latter mainly expressed doubts about his ability to lead the Chinese company, which would still have more than doubled its turnover in 2020. These departures occur especially in a context of intervention of the Chinese state and its desire to regain control of its big tech companies.
Recently, the authorities have strengthened their regulatory arsenal to bring the major players in the technology sector of the Middle Kingdom into line. Beijing even offered itself a seat on the board of directors of ByteDance.
Companies such as Didi Global have also suspended expansion plans in Europe. This Chinese giant of VTC, potential rival of Uber, has also been paying the price for Beijing’s decisions for several months, especially since its IPO in New York on June 30, 2021. By choosing an arrival on the financial markets in the Abroad, the company founded in 2012, which has significant access to the data of nearly 377 million annual active users in China, has apparently sparked the ire of Chinese authorities. They opened an investigation against him for “Serious violation of the regulations regarding the collection of user data”.
“The CCP explains to these companies that if they want to continue to prosper, they will have to respect certain limits and stay within the framework defined by the party., recently explained Jean-François Dufour, director of DCA Chine-Analyze. The idea, with anti-monopoly measures and fines, is to send them the following message: ‘We have let you prosper for a good ten years, if you want this to continue, stay in the nails’. ”
Risk Disclosure: The articles and articles on Arover.net do not constitute investment advice. Bitcoin and cryptocurrencies are high-risk assets, and you should do your due diligence and do your own research before investing in these currencies.