In a recent post on WeChat, JD.com states that it will increase its employees’ annual pay by 14% in the next two years. It will rise from the current 14-months pay model to a 16-months salary. The average wages in China rose by 4.3% in 2020. However, there was a 12.4% increase in the first quarter of 2021. Thanks to the low base when the coronavirus severely hit the country.
JD.com, one of China’s largest e-commerce platforms, states that it will showcase its financial strength by bettering its employees’ pay now when most of its competitors have difficulty coping with the government’s regulatory compliance. Through a brief notice on WeChat in early July, the company declares that employees who currently enjoy a 14-month annual salary will be receiving a 16-month pay by July 2023.
The renowned e-commerce platform based in Beijing consists of at least 370,000 employees. However, some of the company’s employees working in distinct departments say that they have not yet received any information about the salary increment. Some of JD’s employees may not enjoy the new 16-month pay model, according to some media sources. It’s causing many mixed reactions as people wait on clarification and integration of the new pay model.
The bold move to increase employees’ salaries has caused much attention and discussions on various Chinese social media channels due to the rare occurrence of workers’ pay rises in the e-commerce industry. However, the company is enjoying massive success since online shopping became the trend for most people. Therefore, it is not much of a surprise for the platform to inject such financial resources to make it look more appealing and appreciative to its workers.
The move is also in contrast to the recent on-goings in the company. Two years ago, the founder and CEO, Richard Liu Qiangdong, intended to cancel his delivery driver’s base salaries in favor of a system based on the number of deliveries every driver made. It’s a demoralizing action towards employees and people aspiring to work for JD.
The company got it worse as Liu was arrested and detained on rape charges by a Chinese student. Liu Jingyao, the student, claims that JD’s founder raped her at her apartment after dinner. Despite charges being dropped, the scandal still haunted and impacted the business. Such actions by senior people in a company can have tremendous negative impacts on a business.
It’s not until the pandemic that JD.com changes began developing with a surge of customers as more people turned to online stores for their everyday shopping, including luxury goods and groceries. As of March 31, 2021, the company’s net revenue had risen significantly by 39% to 203.2 billion yuan ($31.57), while the net income went up to 3.6 billion yuan from a mere 1.1 billion yuan in the previous year.
Due to the completion of a hat trick of public offerings all over Hong Kong, the e-commerce platform remains untouchable by the latest Beijing crackdown on Big Tech. A recent public letter from Richard Liu to investors states that the company aims at doing the right things in the right way.
In the same letter, Liu recognizes the company’s achievement and efforts towards giving their employees a solid foundation for productivity and happiness at work. It also states that the success and achievement the company receives entirely depend on the teams and employees’ combined effort. Therefore, the company must be good to its employers to ensure they trust the company and serve customers with integrity and dedication.