JD.com’s Xu Lei is set to step down as chief executive after only one year at the post, handing the role to Chief Financial Officer Sandy Xu.
The Chinese e-commerce group on Thursday cited “personal reasons” for the CEO’s departure.
The surprise move came as the Alibaba rival reported results for the first quarter. Revenue grew 1.4% on the year to RMB 242.96 billion (USD 35.1 billion), beating the average estimate of RMB 239.42 billion by analysts surveyed by Refinitiv.
Xu Lei, now 48 and only a few months younger than JD.com founder Richard Liu, will officially retire in June. Liu handed over the role of chief executive to Xu while remaining as chairman in April last year.
After his retirement, Xu will serve as the first chairman of the company’s advisory council. In a conference call with analysts Thursday, Xu said he will spend more time with his family but also will attend company meetings “when necessary.”
Xu joined JD.com in 2009 and has served as chief marketing officer and head of JD Wireless, a unit that runs the company’s mobile apps. Xu took on leadership of the group’s retail operations in 2021.
Amid Beijing’s clampdown on the tech sector, a number of Chinese tech founders have stepped back from daily operations or left management entirely. In 2021, Zhang Yiming resigned as chief executive and chairman of TikTok parent ByteDance to focus on “longer-term initiatives,” and Colin Huang stepped down as chairman of online marketplace Pinduoduo.
Following his retirement announcement, Xu shared Bon Jovi’s song “It’s My Life” on WeChat, and he said: “Thank you all. Please wish me luck, and I wish everyone good luck.”
The incoming CEO, Sandy Xu, joined JD.com in July 2018 as vice president of finance. Before that, she was an audit partner and spent nearly 20 years with PwC.
Despite the surprising shift, JD.com’s strategy will remain unchanged in the long term and the company will continue to “focus on our business philosophies” in terms of cost efficiency and user experience, she said.
Facing increasing competition from Pinduoduo, JD.com waged a price war by launching an “RMB 10 billion subsidy” program in February for merchants, triggering concerns from some investors that the company’s marketing spending may soar and profit margins could be squeezed.
In the conference call, Sandy Xu said the discount program has “basically met” the company’s expectations, as the retailer has noticed improvements in user traffic engagement and repeat purchases as well as an increase in the number of active third-party merchants.
“We will manage the overall impact to control the impact on financial results and margins,” she said.