Zhigang Li - The JD.com Story: An e-Commerce Phenomena

Contents

Appendix: Selected Internal Speeches and Memos
by Richard Liu

I am extremely happy to see The JD.com Story translated into English so that it can be read by international audiences. As a top-selling business book in China, with sales exceeding 300,000 copies, this volume contains many insightful interviews with JD employees, including Richard Liu, the companys founder and CEO.

I believe audiences worldwide are curious about the Chinese business environment. Thanks to ambitious reform policies and a general opening of Chinese markets in the 1980s and 1990s, China has helped drive global economic integration. Along the way, it has become the worlds second-largest economy. With their huge, acquisitive populations, China and the US are the two poles of the internet world. To date, four internet giants with market values of far more than $10 billion each have emerged in China: Alibaba, Tencent, Baidu, and JD.

All these companies are aggressively pursuing globalization. JD set its globalization strategy in motion in October 2012. It has since entered diverse overseas markets, including Russia and Indonesia. Still, JD has a long way to go on the global stage. In the eyes of Richard Liu, earning money in China alone makes for a good Chinese company, but what he dreams of is a truly great company that conducts business, and succeeds spectacularly, on a global scale. When hes traveling in the US, Chinese students who are studying abroad often ask him: When will you start doing business here?

Many Chinese companies want more than success in the Chinese market alone. Some have set their sights on the global market from the very beginning, and in the future, more and more Chinese companies will get serious about expanding internationally. The entrepreneurs and visionaries behind these enterprises will be anxious to tell their stories to audiences far and wide. And these companies leaders, in turn, will put considerable time, effort, and resources into getting to know their new global customers.

As an entrepreneur focused on the development of Chinese companies, Ive long shared in that dream: to learn, grow, and go global. For me, the release of this English edition, in English-speaking countries, represents a pivotal step in that direction.

My deepest gratitude goes to Li Xi, JDs public relations VP, with whom I discussed the possibility of publishing worldwide before I started work on the original Chinese edition in 2014. Thanks also to Gu Xiaoman, PR director, and Wang Xiaodong and Qi Shanshan, PR managers, for their assistance on this English edition.

Id like to thank Bai Wenge for her tireless work on translating the manuscript from Chinese to English.

My gratitude goes to Hu Zhifeng, publishing director of CEIBS Publishing Group, who contacted me the moment he learned about the book in June of 2015, hoping one day to promote it globally.

Finally, special thanks to Shi Tao, who reviewed the English manuscript and offered invaluable advice and counsel. Shi is a respected global e-commerce expert who was a VP at Amazon.cn before becoming JD Group vice president responsible for the media product categories and JDs global business.

Li Zhigang

R ecently, I wrote a preface for the autobiography of Sam Walton, founder of Wal-Mart. Today, I find myself writing the foreword for this book, about my own company, JD.com.

To be honest, I prefer sharing my thoughts on Sam Walton, because Wal-Mart is the benchmark for the traditional retail industry and an inspiration to many. Reading his story was like talking to a chieftain of the industry, very inspiring and encouraging, and I hope to continue to use what I learned from his book, both with my team and for my own self-examination.

Today, I can say with pride that some see the JD model as a new industry benchmark. Yet its far from time to sing its praises. We are still on our journey and the future still holds infinite possibilities. Besides, it is easier to know others than to know oneself. Although I often talk about JDs accomplishments, it is out of character for me to praise myself.

Therefore, when Li Zhigang offered to write this book, my only request was that he record the successes and failures of JD so far, without hiding or whitewashing anything.

He has succeeded and I am proud that this book shows not only the excitement and joy that those who helped create JD experienced along the way, but also the hesitations and anxieties we faced, the public questioning, and our setbacks.

In our early years, after working overtime into the night, the JD team often gathered at small pubs and food stalls. Several rounds of drinks later, the fatigue and depression accumulated during the workday would be largely defused. And when we toasted each other, frictions related to work evaporated. Most importantly, in this relaxed atmosphere, we could freely discuss the twists and turns of business, such as what problems had been addressed, what difficult customers we had won over, and all of the other issues, big and small, that had popped up that day. During these sessions we identified and analysed problems in detail and set bold sales targets. The next day, we returned to the fight fully charged, developing JD by leaps and bounds.

Today, more and more friends have come to JD. We have a growing catalogue of memories; however, we drink less and less.

Now, with JDs rapid expansion, we have trouble finding a place big enough to hold a meeting for all the staff. Weve improved our organizational structure, established institutions and systems, standardized and coordinated internal communications, and improved assessment and incentive mechanisms. As a listed company, JD can no longer handle matters as loosely as it did in its pioneer days. Today, what I worry about is rigorous organization, smooth-running systems, and timely response to customer demands. Yet I challenge myself and my team to hold on to our entrepreneurial spirit, our unmatched sensitivity to market changes, and the rapid and powerful execution that distinguished JD from the start.

Thats the foundation of JD, our original starting point.

In 2004, most Chinese people were more interested in the achievements of Liu Xiang known as the flying man for his pole-vault and hurdling titles than the shifts in retail. No one noticed when a group of guys selling magneto-optical recording equipment in Zhongguancun suddenly decided to move their entire business from a physical, bricks-and-mortar storefront to online. We were already the largest retailer of magneto-optical products, and there was room to grow if we had wanted to continue investing and enhancing the physical store. But under the traditional system, with layer upon layer of intermediaries, retailers had little room to reduce costs and improve efficiency. It was increasingly difficult to innovate in response to customer demand. Ultimately, it was the consumers who had to pay for the low efficiency and high costs of retail channels.

Today, we dare not say that JD emerged at the right moment to solve consumers problems, but the rise of online channels did allow us to see the huge potential to be had by breaking away from traditional retail to create more value for consumers. In 2004, I slept most soundly, because we could finally face our customers directly and fully realize our ambitions.