Recently, a Chinese Giant in eCommerce known as JD.com went to the social platform and announced that they would increase up to 14 percent to their employees’ salaries. They would spread the salary increase out over two years. The announcement came when many of their rivals struggled with making regulations, but this move shows its financial strength. They made this announcement on their official WeChat account. The move will see them increase the annual salary of an average employee to an equivalent of 16 months per annum by the end of July 2023.
In March, JD had 370,000 employees. It increased after they added over 100,000 employees by the end of the year 2020. They increased the salary to boost the morale of the employees. The announcement was a surprise, especially to the social media family. It has become tough to afford a salary increase for their employees to many companies because of the high level of competitiveness in the eCommerce sector.
The decision was to boost the employee’s morale and sparked a wide range of reactions on Chinese social platforms. Records from the National Bureau of statistics in China show that the Chinese average wage rose to 4.3% in the past year. In the first quarter of 2021, the growth went up to 12.4%. They largely attributed the growth to the low base experienced in the country in 2020 when the COVID-19 pandemic shook the country’s and the world’s economies.
The Pay rise at JD.com comes as a shock after the founder and the CEO, Richard Liu Qiangdong. Two years earlier, the CEO had started paying the delivery drivers per piece of work, which meant they would get paid only for the number of deliveries they would make per day.
They made the decision when JD was struggling economically and financially. After a Chinese Student accused CEO Richard Liu of rape, he was charged and detained for a while in Minneapolis. Though the charges were dropped, the scandal and the bad PR brought about by the case had affected its reputation.
However, after a while, the eCommerce company had a huge comeback in 2020 during the pandemic. Their numbers started growing in double digits after their sale went up, from the high number of buyers flocking the online retail websites for their home supplies, starting with the basic groceries orders to luxurious goods.
JD.com’s net revenue went up to 39% that translated to 203.3 billion Yuan in the first quarter of 2021, which was a rise from 2020 when they only had 1.2 billion Yuan during the first quarter. In addition, JD has completed successful initial public offerings in Hong Kong. However, they were untouched during the crackdown on Big Tech that took place in Beijing.
The CEO sent a public letter to its investors last month during their 18th anniversary. The letter reassured the investors that they would continue doing the right thing and in the right way. In the letter, he said success mainly attributes to employees’ hard work and dedication. It made JD give back to the employees and create a solid foundation for their foundation by introducing the incentive.
In the letter, he added that all the companies’ achievements depended on the team and employees. He told them that to keep up the success, the only logical thing to do was follow some of the simplest business logic. He said that the employees would be good to the company when the company is good to them. Treating employees well and with sincerity will make them show loyalty and treat the customers even better. When the customers are treated well by the organization, they will keep coming back and will always come back and spread the word to their peers.