By Dali Finance

Against the backdrop of stagnating traffic growth in e-commerce and the internet industry, JD.com's decision stands out. A year after reintroducing its low-price strategy, while other e-commerce platforms have adjusted their strategies to pursue profit growth, JD.com seems determined to stick to the path of 'low prices.' Xu Ran, CEO of JD.com Group, stated that the company will firmly implement the low-price strategy this year. Additionally, JD.com has announced salary increases consecutively, including three rounds at the beginning and middle of the year, as well as the latest adjustment on September 13. It is understood that most core departments at JD.com will achieve 20-month salaries within two years.

Dali Finance summarizes JD.com's five salary increases in 2024:

1. At the beginning of 2024, the average salary increase for all JD.com retail employees was not less than 20%, injecting strong momentum into the company's new year development.

2. Starting from February 1, 2024, over 20,000 frontline customer service employees at JD.com received an average salary increase of more than 30% annually, highlighting the company's emphasis on frontline staff.

3. From July 1, 2024, JD.com's annual fixed salaries for procurement and sales staff increased from 16 months to 20 months, with performance incentives uncapped, motivating the procurement and sales team.

4. In August 2024, JD.com launched its 2025 global campus recruitment, opening 18,000 positions and significantly increasing salaries for new graduates, attracting top talent.

5. In September 2024, JD.com announced its fifth salary increase. Additionally, the company announced that starting from October 1, 2024, JD.com Retail Group and functional systems will achieve 20-month salaries within two years, with other departments following suit with salary increase plans.

Concurrent with the continuous salary increases, JD.com has also launched a new performance policy, adjusting its performance evaluation system. Industry insiders believe that the core objective of these initiatives is to encourage employees to actively participate in JD.com's business transformation.

Apart from salary increases, JD.com also pays special attention to the shopping experience of consumers, and low prices are one of JD.com's core competitive advantages. Only by offering low-priced products and services can JD.com attract more consumers and increase its market share.

 01. 

Unlike other internet giants that enhance efficiency through 'optimization,' Liu Qiangdong has adopted salary increases and incentive measures. He understands that forming an efficient team necessitates effective incentives, with equitable distribution being the key. In terms of performance, JD.com's revenue for the second quarter of this year was 291.4 billion yuan, an increase of 1.2% year-on-year, and its net profit attributable to shareholders was 12.64 billion yuan, a substantial increase of 92% year-on-year. Moreover, JD.com has launched a $5 billion share repurchase program, demonstrating management's confidence in the future. This also supports JD.com's expansion and salary increases. The low-price strategy has proven effective for JD.com, yielding immediate results. In the second quarter, JD.com's net profit increased by 69.0% year-on-year, and its net profit margin reached 5.0% for the first time, exceeding market expectations. This means that the price war not only did not harm the company's interests but also generated more profits. To further sustain the price war, JD.com has set its sights on daily necessities categories such as beauty products. Recently, more clothing and beauty brands have joined JD.com, and the company is attracting consumers with low prices and discounts, strengthening its brand image.

 02. 

Known as 'Dongge,' Liu Qiangdong has always regarded employees as valuable assets for the company. He understands that in a highly competitive market environment, only a stable and efficient team can ensure the company's long-term development. Therefore, JD.com has announced multiple salary increase plans consecutively in recent years, gradually increasing from an initial 14-month salary to 16 months and now to a 20-month plan. Each salary increase is the best reward for employees' hard work.

It is noteworthy that JD.com's salary increase policy is not a blind follow-up but is closely tied to its low-price strategy. Under Liu Qiangdong's leadership, JD.com firmly implements the low-price strategy, continuously reducing product prices and enhancing the user shopping experience through a series of initiatives such as subsidies worth billions of yuan and a 9.9 yuan free shipping channel.

The implementation of this strategy relies heavily on the hard work of frontline procurement, sales, and retail employees. As the primary executors of JD.com's low-price strategy, they undertake crucial tasks such as negotiating with suppliers, optimizing supply chains, and enhancing efficiency. Therefore, incentivizing these employees through salary increases undoubtedly boosts their work enthusiasm and creativity, injecting more momentum into JD.com's low-price strategy.

03. 

Dali Finance believes that JD.com's salary increase policy also reflects its emphasis on corporate culture. JD.com has always emphasized the spirit of 'striving' and encourages employees to actively engage in work, jointly promoting the company's development. Through salary increases and a series of welfare benefits, JD.com not only provides employees with better material security but also enhances their sense of belonging and loyalty. This positive corporate culture fosters a strong sense of cohesion and combat effectiveness for JD.com in the fiercely competitive market.

From a business perspective, JD.com's low-price strategy has achieved remarkable results. According to the latest financial report data, JD.com's active user base and shopping frequency have both experienced double-digit growth, and the number of third-party merchants has also increased significantly. These achievements are inseparable from the joint efforts and hard work of JD.com employees. Therefore, rewarding and motivating these employees through salary increases is not only a recognition of their past efforts but also an expectation for future development. Dali Finance's analysis suggests that behind JD.com's salary increases and low-price strategy lies its supply chain advantage. Based on its platform model and long-term supply chain accumulation, JD.com has a certain 'combat' advantage in the price war. Additionally, negotiations between JD.com's procurement and sales department and distributors are crucial to realizing the low-price strategy. Through salary increases, JD.com hopes to motivate procurement and sales personnel to better negotiate with brand owners, further expand categories, optimize supply chains, enhance efficiency, and achieve a closed loop for the low-price strategy. Dongge must believe: let consumers win, let clients win, let partners win!