Author: Liu Baodan
Editor: Zhang Xiaoling
Half a month ago, JD.com announced internally that it would never lie down. Soon after, it launched a series of counterattacks.
On the evening of November 27th, JD announced a salary increase for frontline staff such as procurement and sales, and subsequently expanded its procurement and sales departments. Procurement and sales were the main force in JD's early price wars and played a crucial role in obtaining low prices. This move signifies that JD wants to take low prices to the extreme.
At almost the same time, as a measure to improve the shopping experience, JD expanded the scope of &#34;refund only&#34; to please its customers.
From the low-price strategy to user rights, JD's series of actions are clearly imitating PDD.
In the past few years, PDD has opened up a new growth path in the e-commerce market with its low-price strategy, surpassing JD and Alibaba in market value and becoming the new king of e-commerce. This is a huge blow to JD.
Will JD become another PDD, or will it create a new path for itself? JD once again stands at a crossroads, and its choice will determine its future.
Counterattack
JD has emphasized its low-price strategy for over a year and has finally found a breakthrough in its procurement and sales business.
On the evening of November 27th, JD announced a significant increase in the annual fixed salary of procurement and sales personnel, with an average salary increase of no less than 20% for all retail employees. Internally, it is seen as very rare for JD to proactively release salary increase information, indicating that JD is confident.
Immediately after the salary increase announcement, JD started recruiting procurement and sales personnel.
On November 28th, JD released multiple job postings, not only calling on former procurement and sales employees to return, but also launching campus recruitment. Campus recruits will automatically be eligible for the new salary policy upon conversion. According to the job postings, the main responsibilities of JD's procurement and sales personnel are to manage and strategize the brand products they are responsible for, compare prices with competitors, and ensure JD's competitive advantage in pricing.
This also means that in the e-commerce price war, procurement and sales personnel are the ones who control prices in real-time on the front line. This position largely determines JD's market competitiveness.
Back then, JD.com set up booths in Zhongguancun and performed procurement and sales work. In the early price wars, whether it was the book price war with Dangdang or the home appliance battle with Suning, it was the procurement and sales personnel who were at the forefront. It was with the help of the procurement and sales team that JD stood out from intense market competition.
Now, as a new round of e-commerce competition reaches a critical moment, JD's procurement and sales team has once again emerged.
During the Double 11 period, &#34;JD Procurement and Sales Calls Out Li Jiaqi&#34; became a hot topic on Weibo, and JD's procurement and sales live streaming rooms quickly gained popularity due to the absence of booth fees and influencer commissions. According to JD's data, as of November 11th, the cumulative number of viewers for procurement and sales live streams exceeded 320 million.
This time, by expanding the recruitment of procurement and sales personnel on the basis of salary increases, JD's low-price strategy has delved deeper into the business structure, entering a more challenging phase of low-price reform.
It is worth mentioning that in order to keep procurement and sales personnel motivated, JD.com has made adjustments to its salary structure, enhancing the performance incentives.
According to the compensation adjustment plan, JD has proposed an uncapped performance incentive for the internal minimum organizational unit, Boss mode, &#34;hoping to see more Boss units with 30 times monthly salary incentives by 2024.&#34; JD hopes to motivate employees and unleash business potential through this incentive.
Recently, JD has also revised the rules related to sales and transaction disputes, adding a standard for refund without return and supporting users to only request a refund for transaction disputes. According to an insider at JD, &#34;this revision further extends the 'refund only' policy from JD's own operations to third-party merchants.&#34;
Behind these series of actions by JD, there is a common direction, which is low prices and users. This is the core point of competition in the current e-commerce market and also PDD's expertise.
JD has sounded the horn for a new round of offensive, and this time it is JD's ace army, the procurement and sales team. The difference is that in the past, JD was the one initiating the challenge, but now JD has become the target of the challenge.
Whether the procurement and sales team can fight will largely determine JD's direction and future in this round of competition.
Choice
Whether it is the business model or the competitors, PDD is a topic that JD cannot avoid.
In 2019, PDD's market value surpassed JD, but this did not raise JD's alertness until this year when JD started to counterattack.
In March of this year, JD officially launched the &#34;Billion Subsidy,&#34; which is PDD's flagship product. JD's move was also seen as a direct confrontation with PDD.
At the same time, JD has started to support small and medium-sized merchants and stimulate merchant growth through measures such as lowering the entry threshold. According to the financial report, the number of merchants on JD increased by triple digits year-on-year in the third quarter. Small and medium-sized merchants are the foundation of PDD's rise.
The above strategies have achieved preliminary results. JD's management revealed in a conference call in the third quarter that with the entry of third-party merchants, the growth of low average order value orders has accelerated. It is expected that the proportion of GMV from third-party merchants in revenue will continue to increase in the future, even surpassing that of self-operated business.
Expanding the procurement and sales team and incentivizing frontline employees who can fight are also manifestations of JD's continuous deepening of its low-price strategy.
So far, from the app sections to product supply and even the business model, JD has gradually become more like PDD, even &#34;refund only&#34; is one of PDD's signatures.
Next, will JD become another PDD or will it develop into something new? These are the two paths that JD.com faces.
In the competitive business world, it is often difficult to win when facing a stronger opponent with one's own weaknesses. PDD has already mastered the concept of low prices, and it is not an easy task for JD to replace it.
A retail e-commerce industry expert and founder of Bailian Consulting believes that for JD to replicate PDD, it needs to first solve the problems of product diversity and merchant scale to ensure the long-term supply of low-priced goods. In addition, in terms of after-sales service and user experience, JD and Tmall's transformation into the mobile internet era was not thorough enough, and there is still room for improvement in user experience.
Allowing itself to become partially like PDD may unleash new energy for JD, but JD does not need to become a second PDD entirely.
JD's core strengths still lie in its supply chain and fast fulfillment capabilities. Only by maximizing these core capabilities can JD break free from the pure low-price competition and secure its own position.
For JD, leveraging its core strengths to achieve performance growth is a more viable path. CICC Securities stated that JD's self-operated warehousing and distribution model has achieved a complete closed-loop retail system. In the future, this model will bring JD lower costs and higher profits through economies of scale.
Recently, there have been multiple reports that JD will completely withdraw from outsourcing, including departments such as JD Technology and logistics. This may indicate that JD is starting to restructure its supply chain and further reduce costs.
It is worth noting that while JD is deepening its low-price strategy through procurement and sales, it may also expand its self-operated scale, which could be a new signal.
In the five years since JD.com began to delegate authority, Pinduoduo and Douyin have emerged one after another as new forces in e-commerce. Pinduoduo's market value has surpassed Alibaba's. If ByteDance goes public as a whole, Zhang Yiming is likely to become the first Chinese world's richest person. These newcomers are creating a new era of e-commerce.
In the past year, JD.com has repeatedly emphasized JD's entrepreneurial story, emphasizing that low prices are fundamental. From top-level changes to activating frontline employees, JD.com is trying to regain its fighting spirit.
Nineteen years ago, JD bet on logistics and self-operation, going through a near-death experience, but also building a unique &#34;moat&#34; that has kept JD at the top of the industry for many years.
Now, JD.com needs to launch a major transformation and reshape a new JD in order to break through the encirclement of various competitors and create a new territory.

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JD.com sounds the battle horn.