- Richard Liu, the founder of Chinese ecommerce giant JD.com, plans to give $2.3 billion worth of shares to charity.
- He follows his peers who have in recent months donated more than $10 billion worth of personal wealth and stakes in their companies.
- Beijing has been vocal about tackling inequality and stressed that its digital economy must grow responsibly.
Richard Liu, the founder and CEO of Chinese ecommerce giant JD.com, plans to donate about $2.3 billion worth of shares to charity, the Nasdaq-listed company said on Wednesday. He joins the list of Chinese tech moguls who have pledged to give away more than $10 billion since the start of 2021 amid Beijing's drive for "common prosperity."
Liu will give away about 62.4 million Class B ordinary shares of JD.com "to a third-party foundation for charitable purposes," the company said in a regulatory filing. Shares of JD.com closed at $75.08 apiece on Tuesday, the last trading day before the announcement. Each of these shares, called American depositary receipts (ADRs), represents two underlying shares in JD.com.
No details of when the donation will be completed, or which foundation will benefit from it, were mentioned in the release. Per Chinese media reports, Liu is likely to donate to education and environmental causes. A JD.com representative told Insider the company is unable to disclose further details.
Liu created Jingdong in 1998 in Beijing, selling electronics and computer components. The SARS outbreak in 2003 forced him to move his business online. By 2005, he had turned his company into an online-only business. The company changed its name to JD.com (short for Jingdong) in 2013 and debuted on Nasdaq in 2014, raising $1.8 billion in its IPO.
From warehousing to supply-chain management and a commitment to same- or next-day deliveries, JD.com's growth trajectory and business model are similar to that of Amazon's, earning Liu the moniker of the "Jeff Bezos of China."
Despite the nickname, Liu's net worth is a fraction of Bezos'. Liu's net worth was $16.6 billion on February 2, the day before the announcement, while Jeff Bezos' fortune was at $176 billion, data from the Bloomberg Billionaires Index shows. Bezos recently announced that he would donate $433 million to combatting climate change through the Bezos Earth Fund.
A new wave of donations
Liu has donated in various amounts before, but Wednesday's announcement, equivalent to 15 billion Chinese yuan, marks his largest commitment yet. Between 2017 and 2018, Liu donated a total of 6 billion yuan on three occasions to educational institutions and other social enterprises in China, according to Chinese media reports.
Liu's unprecedented pledge for charity comes amid increased scrutiny on China's tech behemoths. In late 2020, Beijing embarked on a crackdown on Big Tech, even as it stressed its commitment to reducing the wealth gap and achieving "common prosperity" across the economy.
In December, China's State Council issued a directive on how it plans to develop China's digital economy, stressing that issues of inequality, inadequacy and unregulated growth have emerged in China's digital economy.
With the pledged donation, Liu joins a wave of Chinese tech billionaires who have in recent months donated — or pledged to donate — part of their wealth to charity.
Delivery platform Meituan's Wang Xing said in June that he will donate $2.3 billion company shares to his own charity, Bloomberg reported. Xiaomi's Lei Jun gave away $2.2 billion of the smartphone maker's shares to two foundations, according to a July filing with the Hong Kong stock exchange. In August, Tencent's founder Pony Ma promised the company would put aside $7.7 billion for a "common prosperity program," per Bloomberg. And ByteDance founder Zhang Yiming donated about $77 million to his hometown Longyan to support education initiatives, city officials announced in June.
Liu has been avoiding publicity since August 2018, after he was accused of assaulting an undergraduate at the University of Minnesota. The charges were later dropped as prosecutors said there was insufficient evidence.
In September, JD.com said Liu would be moving away from daily operations and that Xu Lei, who was CEO of JD Retail, would be taking over in the newly created role of president. The decision was in line with his peers at other Chinese tech companies who announced their intentions to step down from their roles.
A February 2021 filing showed that Liu had a 13.9% stake in JD.com, of which 421.5 million were Class B ordinary shares.