Liu Qiangdong has given another salary increase to employees.

JD.com Boosts Salaries for Customer Service Team by Over 30%

Just over a month after JD.com increased salaries for its JD procurement and sales team, it is now the turn of the customer service team. While other internet companies are showcasing their year-end bonuses, JD.com is taking a straightforward and generous approach to salary increases.

On February 5th, JD.com announced through its official WeChat account that starting from February 1st, 2024, the average annual salary for over 20,000 frontline customer service employees at JD.com will increase by over 30%.

In the workplace, salary increases are one of the most important ways to recognize and affirm employees' contributions to the business. JD.com's decision to increase salaries for the customer service team by 30% demonstrates the company's recognition of the team's importance.

JD.com's customer service department was established in 2009 and has since become the largest self-operated customer service team in the industry. Based on publicly available job postings, the salary range for JD.com's customer service positions is approximately RMB 3,380 to RMB 5,000. By conservative estimates, JD.com will spend at least RMB 240 million annually on the customer service team.

This is not the first time JD.com has increased salaries for its employees. On December 27th of last year, JD.com announced a nearly 100% increase in fixed annual salaries for frontline business personnel, including procurement and sales, and subsequently expanded its recruitment efforts in these departments. Looking at the overall salary increase, JD.com's retail employees will see an average salary increase of no less than 20% at the beginning of 2024.

JD.com's move aims to motivate frontline employees, thereby enhancing the overall combat effectiveness and stability of the company.

Jiang Han, a senior researcher at Pangu Think Tank, believes that JD.com's salary increases for customer service and procurement and sales teams are positive measures. The quality and efficiency of these two teams' work directly impact consumers' shopping experiences and satisfaction. Therefore, increasing their compensation can motivate them to work better and improve the overall level of service provided by the company.

Furthermore, Jiang Han believes that salary increases can enhance JD.com's competitiveness in the talent market, attracting more outstanding talents to join the company and thereby improving its overall strength.

In the context of internet giants cutting costs and increasing efficiency, JD.com not only avoids layoffs but also raises salaries for its employees. This decision has impressed many employees of other major companies.

However, for JD.com, making such a decision was not easy.

According to its financial report, JD.com achieved revenue of RMB 778.585 billion in the first three quarters of 2023, representing a year-on-year growth of only 3.7%. In comparison, Pinduoduo achieved a growth rate of 94% during the same period, far exceeding JD.com's growth rate.

JD.com's market share has also been continuously eroded by competitors such as Pinduoduo and Douyin. According to data from CICC, JD.com's GMV in 2023 was RMB 38 trillion, ranking third in the industry with a market share of 19%, a decrease of two percentage points from the previous year.

The capital market also lacks confidence in JD.com's future performance. On January 22nd, JD.com's US stock price fell to $20.82, hitting a nearly three-year low. As of February 6th, JD.com's market value has fallen by 17.68% since the beginning of the year. Compared to its market value of $165.9 billion (approximately RMB 1,192.8 billion) at its peak in 2021, JD.com's market value has plummeted by 78.75%.

In this situation, JD.com's decision to increase salaries for its employees undoubtedly carries a certain amount of pressure. However, for JD.com, which is preparing for a tough battle, inspiring the combat effectiveness of its frontline teams is a visionary move. JD.com values its team very much. It has been said that there are many factors that contribute to a company's success, but the most important and crucial factor is always the people, the team. "The success or failure of JD in the future has nothing to do with competitors, media, or investors. It is all because of the team. If the company succeeds, 99% of the credit goes to our team, and I only take 1%."

JD's functional departments include procurement and sales, warehousing, distribution, customer service, research and development, and administration. Among these departments, customer service and procurement and sales are frontline employees who directly impact JD's market performance. Customer service deals with individual consumers, while procurement and sales are responsible for purchasing and selling goods.

Throughout the internet industry, it is common practice to increase employee efficiency through salary raises. Internet companies such as ByteDance and Meituan are also stimulating employee efficiency through salary increases and promotions. For example, on January 18th, ByteDance updated its performance and incentive policies, accelerating the pace of stock option vesting, and high-performing employees can receive greater stock option incentives.

For JD.com at present, it is in great need of a resounding victory.

Since returning to China in early 2021, JD.com has launched a series of countermeasures, such as the launch of a "billion-yuan subsidy" program, the live streaming of the procurement and sales team, and a reduction in the threshold for merchants. JD is attempting to regain its position as a price killer.

Since 2024, under the strategy of returning to low prices, JD's counterattack has continued to escalate. On January 24th, JD announced that it will become the exclusive interactive platform for the 2024 CCTV Spring Festival Gala. JD will set up the main venue of the Spring Festival Gala on its app and give away 100 million prizes through interactive lottery.

From strategic direction to organizational strength, JD is mobilizing resources and making efforts to return to its entrepreneurial state.

In the recent New Year's Eve live broadcast, the procurement and sales team became the main force in capturing external traffic. Official data shows that within 5 hours of the JD procurement and sales live broadcast during the New Year's Eve, the total number of viewers exceeded 100 million.

Recently, the procurement and sales team at JD has repeatedly called for Dong Yuhui to join JD's live broadcast. There are rumors that JD is urgently formulating a recruitment plan for anchors, and anchors will not be assessed based on GMV and gross profit. JD's intention to recruit Dong Yuhui is already an open secret.

With the increasing combat effectiveness of the procurement and sales team, as well as the customer service team, JD's chances of winning in this e-commerce battle will inevitably increase.

As the winner of the past price war, if JD wants to stand firm in the new round of reshuffling in the e-commerce market, 2024 will be a crucial turning point, and JD must go all out.