JD.com (9618) founder Richard Liu Qiangdong reportedly asked the company's food delivery unit to share its profit with stakeholders if earnings margins exceed 5 percent, as the newcomer in the mainland takeout market sticks to its social responsibility-driven strategy.
Liu warned that punishments would be dealt if the profit margin surpasses the bar, and told the takeout business unit to stick with his profit-sharing theory to “restrict the desire to earn money,” mainland media reported, citing his speech in an internal meeting shown in a video that recently circulated online.
He once proposed for JD to only keep 70 fen out of 1 yuan (HK$1.06) profit and leave the remaining 30 fen to its partners. Of the 70 fen kept, half will be allocated to the team and the other half reserved for the company’s sustainable development.
Last month, JD announced that it would pay social insurance for full-time riders, the first among existing market players Meituan (3690) and Ele.me under Alibaba (9988).
The lack of social insurance benefits for riders has been a concern for years and the efficiency-prioritized algorithm designed by the platforms has been blamed for the rising tensions between consumers and riders.
A Meituan executive was reported to have made a comment on JD’s entry, saying JD’s attempt – which dates back to 2014 – would not be fruitful.
Today, JD said it plans to recruit at least 50,000 full-time riders this quarter as the instant delivery business is developing rapidly and its order volume is estimated to exceed 5 million, according to a post on its WeChat official account.
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