Corporate View: Jeff Yu,

Published: Mar 2019

Life in the fast lane: the new economy treasurer

As Group Treasury Director of, Jeff Yu has spearheaded a complete restructuring of the Chinese e-commerce giant’s treasury department, a mammoth task that saw him gratefully draw upon invaluable lessons and experience he gained from more traditional industries.

Jeff Yu

Group Treasury Director is China’s largest e-commerce company by revenue and a member of the Fortune Global 500. Through its website and mobile applications, sells appliances, computers, digital products, communication products, garments, books, and household items to consumers and vendors.

Car maker Ford’s recent woes – in January it revealed full year 2018 profits halved and announced thousands of job losses across Europe to cut costs – will have more than drawn the attention of Jeff Yu, Group Treasury Director of, the Chinese e-commerce giant.

For ten years ago, amidst the worst financial fallout since the Great Depression, the American auto industry’s famed “Big Three”, comprising GM, Ford and Chrysler, faced an unprecedented crisis that threatened their survival. And Yu, who joined Ford as Shanghai-based Treasury Manager in 2012, was mightily inspired by how the auto heavyweight’s global treasury team had battled frantically throughout the crisis to help save the company. The experience of working with such seasoned treasury professionals and being immersed in their philosophy, has left an indelible impression on Yu, profoundly shaping his views on the role and responsibility of a treasurer.

Yu recalls that when he joined Ford, he felt himself to be “very lucky”; the car maker is, after all, a multinational company with more than 100 years history and a highly respected treasury pedigree to go with it: “Ford’s treasury is very famous for its experience and not just because of the very important role it played in the survival of the company during the financial crisis. It has been influential in the car industry and across the treasury profession for a long, long time. Those years at Ford were ones where I gained great experience and knowledge, learnt how to handle treasury in a multinational company with a global view.”

“Expertise in treasury and focus”, Yu says without hesitating when asked to highlight the most valuable lessons learnt at Ford. “Those are vital elements for treasurers. Another is learning how to be prepared for all possibilities. As treasurers, we need to prepare for every situation, every environment a company can find itself in, and know how to go about handling it, which is what the nature of the job demands on a daily basis.”

To illustrate the value itself places on preparation, Yu points to the work carried out by the company’s treasury analysis team, created by him when he joined the company as Group Treasurer. “Treasury analysis at is basically all about forecasts. And those forecasts give rise to many scenarios. We have to know how to handle those scenarios, make plans for all of them based on pre-determined investment strategies. If a scenario implies a cash rich environment, we can immediately choose suitable investment products from the product pools based on the daily quotation from different bank partners or other institutions.”

Another scenario might imply the need for financing to support new investments, which in turn will require treasury to ensure plans are in place for financing, both long term and short term: “We need, for instance, to look at the partnerships we have with financial institutions. With financing, daily communication and cooperation with institutions are important. How we handle those relationships as a corporation over the long term is therefore key and also needs planning.”

Driving treasury transformation

The impact Yu’s experience at Ford has had on his work at, however, has been much more far reaching than the creation of a treasury analysis team. He recalls that when he arrived at the e-commerce group its treasury function was largely focused on essential daily operations. Yu launched an overhaul of the department, one that over the last three years has resulted in a complete revamp of its structure and the creation of a host of new strategic treasury units. The prime objective of the overhaul has been to generate more value from treasury for the group, especially with regards to supporting its strategic objectives.

As well as the treasury analysis team, the new structure includes a treasury control team: “As a US listed company we are fully aware that’s treasury must be fully compliant with regulations across its entire structure and across all its procedures. The task for the treasury control team is to act as an internal auditor focused on treasury procedures, to make sure they are all fit for purpose.”

There is a dedicated financing team to handle’s relationships with financial institutions, manage the setting up of new project finance facilities, and provide support for’s monster-sized promotional events. A banking team, meanwhile, handles all daily operations relating to, for example, account opening and closure and the safeguarding of all the transactions.

“There are a lot of operational aspects that are very important for us in treasury as we look to provide support for the wider group. We have even set up a treasury shared service centre to help further centralise the treasury operation at the group level,” says Yu.

Technology and logistics

There is certainly no doubt the operational and transactional scale of merits such a carefully structured and extensive treasury operation. The Nasdaq-listed company and Fortune Global 500 constituent is valued at US$34bn, one of the largest e-commerce companies by revenue in China. In 2017 posted total revenues of RMB362bn (40% ahead year-on-year) according to SEC filings.

One of’s big strengths is delivering goods bought from its platform to consumers all over China. That means it has had to invest very heavily in a nationwide system of fulfilment warehouses and delivery centres. As such it owns the complete delivery chain, from long-haul shipping to last-mile delivery, including now by drone, to 99% of China’s 1.34bn population. Over 90% of direct orders can be delivered same-day or next-day.

According to its annual report for 2017, at the end of that year operated nearly 500 warehouses with an aggregate gross floor area of approximately ten million square metres in 78 cities in China. The operation employed 84,790 delivery personnel, 33,153 warehouse staff and 12,760 customer service personnel and provided same-day and next-day delivery in 1,752 counties and districts. As of September 2018, it had approximately 200,000 merchants on its online marketplace, and a total of 175,366 full-time employees.

Technology has been a critical factor in enabling to successfully execute its business model and it invests heavily in ensuring it remains leading-edge by employing 12,000 engineers. Based in China and Silicon Valley, the engineers are focused on researching areas that include data science, artificial intelligence, virtual and augmented reality, robotics and autonomous vehicle systems. The fruits of their labour are used by for everything from intelligent pricing to inventory management and fraud detection.

Transactional challenge

If the scope and scale of’s logistics operation are breathtaking then so are its transactional metrics, with annual volume now at a treasury-challenging “trillion RMB” scale. “That is a very large transaction volume and it means that we have to, in some ways operate, as if we had an internal bank that helps us to manage all the transactions, handle the cash flow, make sure the liquidity is always available in the right places at the right time,” says Yu.’s epic promotional events are a major consideration for Yu and his team as they assess the outlook and preparation for liquidity. The company’s 11 day “Double 11” sales event in November 2018, for instance, generated a record transaction volume of RMB159.8bn (approximately US$23bn).

The company’s 18-day annual anniversary sale in June 2018, meanwhile, saw transaction volume during the event hit a record US$24.7bn, up 50% on the previous year.

Very big and very fast

While Yu is effusive in acknowledging the huge help that his experiences and skills gained in other industries and sectors have been to him at, he is also keen to stress the very different opportunities, challenges and risks that confront treasurers in new economy companies compared with traditional industries.

“It’s quite a different situation here at compared to my previous experiences. Ford is a typical multinational company in a traditional industry. is part of a much more recently established industry, e-commerce, one that is still developing very fast. You cannot handle the treasury here, and in new economy companies generally, I think, based on just the skills or abilities gained from traditional industries.

“The biggest challenge at for me and my team is its enormous size and the speed at which it operates: it’s very big, and very fast. That is often the major difference between the traditional company and new economy company. And it is the speed at which developments can take place at in terms of volumes and scale across all operational aspects that makes treasury management here very different from that at Ford or other traditional companies.”

Astonishingly, despite the gargantuan scale of the operation, Yu’s global treasury team is only 70-strong. “How can we handle the “trillion RMB” transaction volume annually, the speed and scale of, with just 70 people? The answer is to make full use of the technology. One thing we are really lucky in is we are a very able high-tech company as well.”

Not surprisingly given his determination to ensure all bases are covered, Yu has even set up a treasury unit, called the system analysis team, to ensure his treasury department as a whole makes full use of technology. Part of the treasury analysis team, this team is constantly looking at ways to build up the treasury management system, upgrade its functions to better align it with the growth of the business. Last year, for instance, the department expanded its host-to-host connectivity to some foreign banks in countries including Japan and Singapore, so enabling treasury to handle more transactions through its system instead of manually. “The solution for us in coping with the size and speed challenge certainly involved a change in our mindset but the core aspect has been technology,” he says.

Efficient use of technology and the creation of a treasury structure fit for purpose have been key in supporting’s internationalisation, which has picked up a real head of steam over the last few years and exposed the company to new challenges. The company, which listed in New York in 2014, has been on steep learning curve for instance in developing the skills and infrastructure to handle capital markets. “Previously, the treasury’s focus was heavily biased towards the mainland market but for financing and investment requirements, if you have foreign market opportunities, that can really enrich treasury strategy. We now have a very global view for handling all the treasury activities, especially the investment and financing aspects.”

Vivid experience

While Ford looms large in his career history, Yu points to his preceding and initial career in banking as having been instrumental in encouraging him to move into corporate treasury. As a banker, he specialised in providing services such as financing and treasury solutions to corporate clients. The post gave him exposure to a number of industries including real estate, retail and the car industry.

After five years in banking, however, he decided to switch to the corporate world: “As a banker I was just looking into the corporate world from the outside. I felt I needed a more vivid experience of companies and organisations.”

His first corporate treasury post was at Metro AG, the German food wholesaler. As with Ford, Yu counts himself as fortunate in having joined a retail company as the experience he gained there was a big help to him in getting to grips with the e-commerce business. After working as Treasury Manager for Metro AG with responsibility for the Greater China market, Yu came to the conclusion that he needed yet “more vision, more international exposure, and a knowledge upgrade”.

After graduating with an MBA in Hong Kong Yu took a position as Deputy Treasury Director at Hang Seng-listed Fosun, one of China’s largest private industrial and investment conglomerates. “Hong Kong is a very international financial centre so I had the opportunity to connect with the global market and gain knowledge of and experience in strategic treasury deals, for example, M&A and syndicated loans. It was excellent exposure and very helpful in expanding my vision, which was my initial goal when I went there.”

After Fosun came Yu’s posting at Ford in 2012, by which time the company was finally on the mend after the tumultuous years of the Great Crisis and busy looking to leverage opportunities presented by the auto market in China which by then was booming.

Reflecting on his journey he says: “When I consider the treasury structure we have put in place at over the last three years, I can see now that it really makes full use of all my personal experience. I’ve had the opportunity to transform treasury practice here, create a new structure and make full use of banking technology. But there is a basic philosophy I have used here and it is based on time-tested elements such as ensuring we have a global view, treasury expertise, professional communication, prudent procedures in place… all the essential elements that I saw work so well and experienced at those decent companies such as Ford, Fosun and METRO. Those basic treasury qualities are the same whether one is working in the new economy or a traditional industry.”

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