JD.com, an e-commerce juggernaut in China, has put a plan in place to increase employee pay by 14 percent over the next two years. JD made the announcement on the social media platform, WeChat. The company detailed how the pay increase will be rolled out. JD plans to pull off the full 14 percent pay increase by July 2023. It’s a move that demonstrates how strong JD is financially despite the COVID-19 pandemic, which affected a number of businesses throughout the world. In fact, the company has added 100,000 employees from December 31, 2020. As of March, JD.com has over 370,000 employees.
As one would imagine, this move has been well received by employees. The move was made in an effort to boost the morale of the workers. JD’s announcement has garnered a significant amount of buzz on social media. These days, it’s rare for a high-profile e-commerce business to give out company-wide raises, especially one as big as 14 percent. JD’s raise announcement comes at a time when companies in China as a whole have increased wages by 12.4 percent. The pay increases have been rolling out as the base pay has been low in the country due to the COVID-19 pandemic.
JD has seemingly reversed course on its stance when it comes to employee pay. Back in 2019, JD’s CEO and founder, Richard Liu Qiangdong, said that base salaries for delivery drivers would be replaced in favor of a pay system that is based on the number of deliveries made. At the time, JD was teetering on turmoil as Qiangdong was facing rape charges. Those charges ended up being dropped but JD’s reputation took a hit due to the negative press. During the pandemic, JD was able to get back to its feet due to the surge in online retail sales.
During the COVID-19 pandemic, JD saw a 39 percent increase in net revenue. When it comes to net income, that number ended up being over 2 billion yuan more than it was pre-pandemic. Qiangdong has been able to prevent JD from falling into the trap of making mistakes in terms of the crackdown of Big Tech. In a memo sent to employees during the celebration of JD’s 18th anniversary, Qiangdong said the most important thing when it comes to doing business is proceeding honestly and by the book. Thanks to this philosophy, JD has been able to avoid violations.
Qiangdong believes the success of JD boils down to a strong team. He feels a collaborative effort is needed for any business to succeed. If everyone is on the same page and believes in the company’s mission, then the chances of success are greatly increased. He believes that JD’s simple business model has made it easier for employees to get on board. Qiangdong relishes the fact that his employees are on the same page. It also explains why JD has been able to stay on top of the online retail space for over 18 years. That success isn’t likely to slow down anytime soon.