Chinese e-commerce platform JD.com has recently begun to undergo a new round of organizational restructuring. Jingxi Business Group under JD Retail will be broken up within this month, and the original business lines are expected to be integrated into other business groups, 36Kr reported on Friday.
Specifically, Jingxi, Jingxitong and Jingxi Pinpin will be merged into JD Retail. Before the merger, Jingxi Business Group will carry out personnel layoffs.
The adjustment of the Jingxi Business Group will be carried out in batches. At present, the business adjustment of Jingxi Pinpin has been completed by only reserving businesses in Beijing and Zhengzhou. At most, there are more than 20 provinces in China covered by Jingxi Pinpin. Its business scope has also been contracted to Beijing, Shandong, Henan and Hubei in March of this year.
According to sources, the purpose of this business optimization is to increase profit capacity, and the future of each department will be closely related to the profitability during the 618 Shopping Festival. One source said, “Before the end of June, projects in JD Health, JD Industry and JD Retail, which did not make profits or reduce loss to reasonable level, have the possibility of being cut.”
According to the firm’s financial report, the operating loss of JD.com‘s new business in 2021 reached 10.6 billion yuan ($1.58 billion), including JD Production and Development, Jingxi, overseas business and technological innovation.
Jingxi Pinpin under Jingxi has attracted much attention in the past two years. According to sources, the reason why Jingxi Pinpin’s business in Beijing was kept is that it has achieved profits in the city. Although its business in Zhengzhou is in a state of losses, it is testing a new distribution model in the city. Whether the business in the two places will continue in the future still depends on profits and losses.
The establishment of the Jingxi Business Group in 2020 shows JD.com‘s various explorations of the small-town and rural markets in recent years. In April 2017, JD.com‘s founder Richard Liu made a high-profile announcement on Weibo that in the next five years, JD.com will open 1 million convenience stores nationwide, half of which will be in rural areas. However, after setting this target, Jingxi did not disclose the number of stores it has renovated in rural areas.