Richard Liu, founder of JD.com, on the day the company went public on the Nasdaq exchange, May 22, 2014.
Andrew Burton/Getty Images
Richard Liu, billionaire founder of Chinese e-commerce giant JD.com, defended his decision to expand into the country’s hugely competitive food-delivery market and incurring heavy losses, referring to a “lost five years” for his company.
Liu, JD.com’s 51-year-old chairman, made the comments on Thursday, according to a report from the state-run Securities Times that didn’t specify where or to whom the billionaire delivered his remarks. A company spokesperson confirmed Liu’s comments to Forbes Asia.
“Unfortunately, there is nothing new from JD.com over the recent five years,” the billionaire said. “Frankly speaking, it is a lost five years for JD.com… The period has been the least innovative, with no progress and growth, and the most unremarkable in my entire entrepreneurial journey.”
Liu, who has a net worth of $6.3 billion based largely on a company stake, stepped down as JD.com chief executive in 2022, amid a government crackdown on the country’s internet sector that included the 2020 suspension of fintech giant Ant Group’s $35 billion initial public offering. Over the years, JD.com has ceded market share to once small rivals such as the Nasdaq-listed PDD Holdings, whose founder Colin Huang has amassed a net worth of $36.1 billion as his shopping platform offers deep discounts to China’s increasingly frugal consumers.
The company has seen management reshuffles including the surprising departure of its previous CEO Xu Lei, who has since been replaced by the billionaire’s close lieutenant Sandy Xu. According to the Securities Times, Liu returned to heavy involvement in management in late 2023 as chairman.
To find new revenue sources, Liu decided to expand into food delivery. JD Takeaway was officially launched this February, with the company vowing to invest 10 billion yuan ($1.4 billion) over a year in customer subsidies to compete with more established rivals such as the Hong Kong-listed Meituan and fellow e-commerce giant Alibaba’s food-delivery arm Ele.me. In a publicity stunt, Liu donned a delivery rider’s uniform in April and rode an electric bike in Beijing to deliver meal orders.
The billionaire believed the food-delivery business could help JD.com recruit more logistics riders, beef up its supply chain capabilities and, in turn, drive usage of the company’s main e-commerce app, according to the Securities Times. In the few months since its launch, JD.com has grabbed 7.5% of China’s food-delivery market after its daily meal orders reached 20 million on May 13, according to a May 14 research note from Blue Lotus Capital Advisors.
But that progress has failed to impress investors, who worry about a mounting price war that is eroding profit margins. JD.com‘s Hong Kong-listed shares have fallen 2.2% this year as the benchmark Hang Seng Index rallied over 20% year to date. In May, Chinese regulators summoned representatives from major food-delivery companies including Ele.me, JD.com and Meituan to urge fair practices amid a subsidy war.
Liu vowed to continue his food delivery foray, according to the Securities Times. JD.com will incur 12 billion yuan in food-delivery related losses in 2025, according to the research note from Blue Lotus Capital Advisors. The research firm projects that the company may grab 10% of China’s food-delivery market by 2030 after incurring cumulative losses of 46 billion yuan.
In the first three months of this year, the latest financial results available, JD.com’s revenues increased 16% year-on-year to 301.1 billion yuan. Net income attributable to shareholders was 10.9 billion yuan, up 50% year-on-year, as the company benefited from China’s nationwide consumer stimulus program that subsidized the purchases of selected goods such as home appliances.
