Announced via a recent U.S. stock filing, chairman and chief executive officer of JD.com Richard Liu has stated that he intends to donate $2.28 billion worth of shares to charity. With a fortune worth $15.9 billion according to Forbes Real-Time Billionaire List,Liu is one of China’s richest entrepreneurs, having built JD.com up from a small booth in an electronics bazaar to the e-commerce giant it has become today, trading on both the Nasdaq and the Hong Kong Stock Exchange.
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According to the Form 6-K filed with the United States Securities and Exchange Commission, JD.com “has been notified by Mr. Richard Qiangdong Liu, the chairman of the board of directors and chief executive officer of the company, that he will donate 62,376,643 Class B ordinary shares of the company to a third-party foundation for charitable purposes.”
As China’s President Xi Jinping has sought to promote “common prosperity,” and ease inequality in the country, a number of other prominent figures in China’s tech sector have been making philanthropic contributions. Zhang Yiming, founder of internet technology company ByteDance pledged $78.61 million to the Chinese city of Longyan for education, and Tencent, the largest company in the video game industry in the world based on its investments, announced corporate pledges of over $15 billion toward social good in 2021.
However, unlike many of the companies that have sought to ramp up charitable donations amidst encouragement from the government, the betterment of society has long been a key aspect of Richard Liu’s business model for JD. When the company was listed on the Nasdaq in 2014 Liu told the media that above all he hoped the success of JD would enable to take care of more people, and has been making good on his word in recent years.
The company was recently ranked number six on in the internet services and retailing category on the FORTUNE 2022 World’s Most Admired Companies list, which partners with Korn Ferry to survey over 3,700 executives, directors and analysts to measure corporate reputation and performance. JD.com received the top social responsibility score amongst other Chinese companies on the industry ranking, while also getting high marks in use of corporate assets, long-term investment value and quality of products/services.
Liu himself grew up in relative poverty, born in a rural village in northern China. His family rarely had enough money to purchase meat and mostly subsisted on corn and sweet potatoes, but Liu would often stare at the many slices of pork hanging from the rafters of his village head and dreamed of one day becoming one himself so that he could distribute it to everybody else in the village. He pursued a sociology degree in college with the intention of going into politics, but soon found that he could make more effective change through entrepreneurship.
In 1998 Liu used his entire life’s savings to rent a stall in the increasingly popular tech bazaars popping up in Beijing, and just five years later had grown his business into a chain of a dozen retail electronic stores. However, in 2004 he made the decision to close all of his brick-and-mortar locations and move the business online, creating one of China’s most powerful internet companies as a result. It was during that first year as an web-based business that he took his small team to the poverty-stricken Jingle county in the Shanxi province and paid the school tuition fees of 38 children from poor families – one for each member of the company at the time.
As the company has scaled, so too has Liu’s ability to give back to his communities. When the coronavirus pandemic began to wreak havoc on the lives and livelihoods of people across the globe, JD.com provided donations of vital medical and food supplies while also leveraging its expansive logistical network of warehouses and transportation resources to support communities.
Hundreds of millions of masks and other medical supplies were donated across China and additionally to other countries such as Chile, Switzerland and the United Kingdom with Liu and his wife also personally donating ventilators, surgical gloves, medical safety goggles and protective gowns to the UK.
During the early days of the pandemic when lockdowns were tight, JD.com waived the fees to their cloud video conferencing service for businesses and the general public in order to alleviate the need for face-to-face meetings. They also worked with local governments to integrate their AI smart assistant technology into the WeChat account of the mayor’s office for various cities, allowing users to receive quick and accurate answers to their Covid-19-related questions.
Liu has also worked to ensure the company is able to maintain its high-quality services while also working to reduce its carbon footprint through solar power technology, electric vehicles, green packaging and new technologies utilized in its data centers. By introducing recyclable boxes and reducing carbon materials in 95 percent of its total delivery boxes, each package delivered by JD Logistics, the logistical arm of JD.com, saves an estimated average of 400 grams carbon dioxide when compared with traditional packaging methods.
As someone who has first hand experiences with the challenges faced in lower-tier cities and rural areas of China, In 2020 Liu saw JD embark on a rural revitalization program aiming to drive more than one trillion yuan ($157 billion) industrial output within three years time. To date they have already achieved 320 billion yuan ($50 billion) in industrial output.
One of the company’s biggest success stories is its “Running Chicken” initiative, a free-range chicken farm established in China’s economically disadvantaged Wuyi County in the Hebei province. While professional breeders hired by JD.com tended to the chickens, local farmers were offered part-time jobs maintaining the farm and also growing vegetables, fruit and grain for chicken feed. The program was not only able to provide top-quality and ethically-raised chicken meat to shoppers of JD’s platform, but also reduce poverty in one of the country’s historically poorest regions, and the company has since gone on to launch other similar initiatives, including the “Swimming Duck” project in Jiangsu province and a “Flying Pigeon” initiative in Hebei province.
In total, JD has cooperated with 110 state-level poverty-stricken countries. On JD.com, it has opened over 250 poverty alleviation local specialty malls to help promote and market local agricultural products on a national scale. By leveraging its logistical network, JD is able to introduce its consumers to new local specialities that they may have previously been unaware of to the benefit of disadvantaged farmers. To date JD.com has sold over three million products from poor areas across the country, achieving billions in sales and directly increasing the income of over one million rural households.
While known and still operating as an e-commerce company, in 2020 Richard Liu announced a shift in the company’s strategic position to that of a supply chain-based technology and service provider. Thanks to the company’s retail infrastructure it has been able to expand its capabilities beyond the sector to areas such as logistics, health and technology, empowering partners as well as industry players beyond the JD ecosystem. In doing so, Liu has pushed his company closer to his true goal and the company’s new mission statement: Powered by technology for a more productive and sustainable world.