A Gratifying Plan by JD.com To Increase Salaries for Its Employees

While many companies are undergoing uncertainties from the impacts of Covid-19, there is still hope for many in the future. For instance, a renowned online enterprise in China, JD.com, has promised to raise their employees’ pay by 14 percent by mid-2023 for two years. This shows that the giant merchant maintains its financial muscles amid all the difficulties encountered by many from 2020. 

It is essential to mention that China increased the average wages in the year 2020 by 4.3 percent. However, growth continued, reaching about a 12 percent upsurge by the end of the first quarter of the year 2021. This positive change can be credited to the low base experienced in the previous year.

JD.com is the leading online merchant in China and the largest internet company in revenues. Some of the products they sell include electronics, cosmetics, fresh food, and apparel, among others. The company’s solid points include next-day delivery, same standards across its networks, quality, and authenticity in all products. Customer satisfaction is also a guarantee, thanks to their direct selling system that helps maintain control over products quality and distribution. 

The giant Chinese merchant published the good news of pay rise on WeChat in early July 2021. The promise is an increase in the average annual salary for each employee. This means growth from a 14-months pay to a 16-months pay by mid-2023. By March 2021, the total number of employees at JD amounted to 370,000. 

Some employees in the company hinted that they hadn’t been notified of the salary increase yet. And while the move is supposed to improve employees’ motivation at work, it has also grabbed people’s attention on social media. It is a surprise to many since the ecommerce sector is facing high competition in the country today.

Two years ago, the CEO of JD, Richard Liu Qiangdong, canceled base salaries for his delivery drivers. He aimed at implementing a payment system that compensates them based on deliveries made. This move is highly in contrast with the current promise to give a pay rise to its employees. However, someone would argue that the company was struggling financially when he decided to change the salary system. Richard Liu was at that time facing a court case about rape in Minneapolis. Still, eventually, all of his charges got dropped. Unfortunately, that scandal continued to affect his business adversely.

After that big hitch, JD came back to life better than ever before during the coronavirus pandemic. The health situation called for online shopping — consumers were flocking online to grab their daily groceries, among other commodities. This ecommerce giant doubled its sales, leading to a 39 percent increase in net revenue by the end of the first quarter of the year. The net income of JD also grew from approximately 1.1 billion yuan to 3.6 billion yuan. The company has been experiencing some stability since then. It could be why they offered the pay rise for their employees.

During a recent crackdown in Beijing on Big Tech, JD was one of the companies that remained untouchable. They could have been smart enough when they offered public offerings in Hong Kong, leading to their sustenance in the market. 

During the company’s 18th anniversary, Richard Liu wrote a letter informing investors that his tech giant will continue doing the right thing in the right way. He also acknowledged the efforts of his employees, terming them as the key contributors to their success. To this accord, Liu added that it is the company’s responsibility to keep them happy. 

Liu also stated that when employees are treated right, they will serve customers better, and the customers will trust the company more. JD.com has always been keen when it comes to quality products, customer satisfaction, and technology utilization. On this recent news about a pay rise for employees, the tech giant can only become better in its product and service provision.