Photo/Wang Yubiao (NBD)

On May 11th, JD.com (Nasdaq: JD, 09618.HK) released its Q1 financial report ended on March 31, 2023. The report showed that JD.com's Q1 revenue was RMB 243 billion, showing a YoY increase of 1.4%. Net profit attributable to ordinary shareholders was RMB 6.3 billion, turning losses into gains compared to a net loss of RMB 3 billion in the same period last year, and non-GAAP net profit attributable to ordinary shareholders was RMB 7.6 billion, compared to RMB 4 billion in the same period last year.

Compared to the business performance, the management changes at JD.com have attracted more attention from the public. On the evening of May 11th, JD.com announced that CEO Xu Lei has offered to retire due to personal reasons and the company's CFO, Xu Ran, has been promoted to CEO, responsible for the daily operations and coordinated development of the group's various businesses, reporting to JD.com's board of directors and chairman Liu Qiangdong. It is worth noting that Xu Ran is JD.com's first female CEO. 

In addition, JD Logistics'CFO Shan Su was promoted to CFO.

During the conference call after the financial report, Xu Ran mentioned that the purpose of the organizational adjustments made within JD.com was to give decision-making power to the teams closest to customers and most familiar with market demands, to improve management efficiency and stimulate organizational vitality. Each unit will have greater decision-making power and business management rights, and the performance assessment of each unit will be more closely tied to its own performance, with the main goal being to further stimulate the entrepreneurial spirit of front-line teams and align the interests of the team and investors.

Xu Rong also mentioned during the call that in the future, JD.com will continue to deepen its group strategy, focus on smaller markets, third-party merchant ecology, and instant retail business, which are important engines for the long-term growth of core businesses. At the same time, JD.com will also continue to improve its scale operation and operational efficiency, as well as diversify its revenue structure to maintain the long-term healthy growth of JD.com's profits.

It is worth noting that from the financial report, JD.com's total revenue growth rate has slowed down. JD.com's total revenue mainly comes from four major sectors: retail, logistics, Dada, and new businesses. The financial report showed that the retail revenue from the core business was RMB 212.36 billion, showing a YoY decrease of 2.4%, no longer being the "cash cow".

"The short-term business adjustments will indeed have a certain impact on the revenue growth rate, especially for categories such as supermarkets, but we believe that through a period of effort, each category will return to a more healthy growth trend. In the long run, the supermarket category will be JD.com's most important growth driver," Xu Ran emphasized.