Chinese tech giant JD.com founder Richard Liu to step back from daily business

The decision by Mr. Liu, who is also known by the Chinese name Liu Qiangdong, to step back sets up a possible succession plan and follows similar moves by other founders of Chinese tech giants facing tougher competition and a widening crackdown by Beijing.

Peers including Pinduoduo Inc. founder Colin Huang and TikTok owner ByteDance Ltd. founder Zhang Yiming went further than Mr. Liu and gave up leadership positions this year to focus on broader corporate strategy or pursue personal interests.

Mr. Liu, 47 years old, founded the online retailer in 2004 as a platform selling electronics. JD.com has since grown into one of China’s heavyweights, selling items including groceries and clothing to millions of monthly users. The company spun off its health and logistics subsidiaries in initial public offerings this year.

Xu Lei, the head of JD’s retail arm, will take the newly created role of president and be responsible for the daily operations of the company as well as the development of the various business units of JD.com, the Nasdaq-listed company said Monday.

Citigroup analysts including Alicia Yap wrote in a note after the announcement that they wouldn’t be surprised if Mr. Xu was being positioned as a potential successor to Mr. Liu, particularly if he further proves his management capability. A JD spokeswoman declined to comment on succession plans.

Chinese officials have been increasing their scrutiny of internet companies with a rapidly expanding crackdown aimed at mergers, foreign IPOs, anticompetitive behavior and working conditions. Tech giants Alibaba Group Holding Ltd., Tencent Holdings Ltd. and Didi Global Inc. have come under fire.

JD.com was one of 13 companies ordered to adhere to tighter regulation of their data and lending practices. Since December, JD.com has been fined by market regulators for mispricing products online and inadequately reporting corporate mergers to authorities, and accused of unfair practices in community group buying.

The e-commerce group was among nearly three dozen companies that agreed—in statements published by China’s main antitrust regulator in April—not to engage in anticompetitive behavior and listed areas in which they would work to build a fair and competitive market.

When JD.com reported earnings last month, Mr. Xu said the company had suffered from anticompetitive practices by its rivals and could benefit from the tougher line by authorities. Its shares are down about 9% this year, less than the declines of many other Chinese internet companies. Shares in JD Health International Inc., the company’s telemedicine subsidiary, have lost nearly half their value amid concerns the crackdown could expand to that industry.

In a speech at an e-commerce industry forum Friday, Mr. Xu made comments that aligned the company with national objectives outlined by Chinese President Xi Jinping. He said JD.com would focus on helping merchants, particularly in rural areas, sell their products online and would boost the company’s contribution to developing China’s domestic market.

Mr. Liu has largely kept out of the media spotlight since August 2018, when he was arrested following allegations that he raped a Chinese student at the University of Minnesota. Prosecutors ultimately said there was insufficient evidence to bring charges against Mr. Liu. At the time, his lawyer said the encounter was consensual.

The Beijing-based company also named other executives to new roles Monday. Xin Lijun, the head of JD Health, will take over Mr. Xu’s former position as chief executive of JD Retail, and Jin Enlin will take over as chief executive of JD Health.

 

 

This story has been published from a wire agency feed without modifications to the text