Nov 25, 2021| Financial
Dada Q3 2021 Earnings: Revenue Growth Accelerates to 86% YOY, Deepens Ties with JD.com
by Dada and JD
On November 24, Dada announced its unaudited financial results for the third quarter ended September 30, 2021.
In this quarter, Dada’s total net revenues increased to RMB 1,686.8 million, which is above street’s expectation of RMB 1,625.0 million and the company’s high-end guidance of revenue outlook. Aligning the revenue recognition method of Dada Now last-mile delivery services to net basis, pro forma revenue growth would have been 86% year-over-year, which represents an acceleration compared with 81% revenue growth in the last quarter.
“Dada has always been committed to driving digital transformation in the retail industry and providing consumers with superior experience to meet the evolving demands,” said Mr. Philip Kuai, Chairman and Chief Executive Officer of Dada. “We are excited to strengthen strategic cooperation with JD under the omni-channel strategy to explore the enormous potential in the on-demand retail industry. We will continuously work together to create more value for retailers, brands and consumers and serve the development of the real economy.”
In October, Dada Group and JD jointly launched “Shop Now,” a unified brand for all on-demand retail services within the JD ecosystem. Through Shop Now, users can access on-demand services via multiple channels on JD, including the “Nearby” tab. Shop Now increases Dada’s penetration rate among JD’s vast user base, which should become a stronger driver for its long-term development.
As JDDJ expands merchant and category coverage, the platform is helping more offline retailers and brands build digitalization capabilities. It now has established partnerships with 82 of the top-100 supermarket chains in China. In the Q3, revenue from online marketing services on JDDJ grew by over 140% year-over-year, a significant acceleration from the previous quarter. Meanwhile, orders fulfilled by Dada Picking grew over 70% quarter over quarter.
Dada Now has rolled out a panorama of its on-demand order fulfillment, covering warehousing, picking and delivery services, to empower retailers in an all-process way. In this quarter, revenue from on-demand delivery services to chain merchants increased more than 110% year-over-year. Dada also provides third-party delivery service providers and merchants who deploy their own delivery fleet with a suit of digital tools to manage order dispatching and routing for omni-channel on-demand delivery orders.
Please find the full version of the financial report here
Nov 19, 2021| Financial
JD Executives on Q3 2021 Earnings Call Highlights
by Yuchuan Wang
JD.com released third quarter 2021 earnings on Nov. 18. During a call to discuss the results, Lei Xu, president of JD.com, said that, “When the external environment shifts, JD is able to continue to outperform the industry with more certainty and stronger resilience.”
In the third quarter, JD.com saw a solid net revenues increase of 25.5% from the third quarter of 2020, reaching RMB218.7 billion (US$33.9 billion), despite macro and industry challenges. The growth of net service revenues was a highlight at over 43% year-on-year, compared to 23% growth of net product revenues. Net service revenues contributed a historical high of 15% to the total revenues.
Third-party marketplace also generated positive results. Lei Xu shared on the call that the number of third party merchants joined JD in Q3 tripled that of Q1 and Q2 combined, with apparel and home categories leading the growth. He said, “Going forward, we will leverage the healthier competition and development environment of the industry to continuously enrich our marketplace ecosystem, explore new models and formulate our differentiated strategic approach.”
JD’s continuous improvement in user experience has also resulted in stronger consumer mindshare, engagement, and the increase of purchasing frequency. The company’s annual active customer accounts increased by 25.0% to 552.2 million in the twelve months ended September 30, 2021. In Q3, JD’s mobile DAU (Daily Active User) grew faster than annual active users, accelerating to over 30% year-on-year in September. Average order frequency for all users increased 23% year-on-year, driven by both new and existing users. And total order volume sustained a year-on-year growth of about 40% in Q3.
“Within JD retail, the number of categories users purchased expanded to a historical high even in a low season,” said Sandy Xu, CFO of JD.com. “In particular, users who have stayed with JD for more than a year tend to double the number of the categories they purchase.”
Sandy Xu also shared insights in JD’s supermarket categories which were again the largest contributor of JD’s new users in the quarter. The average number of orders per user for supermarket categories continue to increase and reached its all-time highest level. Additionally, users are purchasing more high-frequent supermarket products on JD including food and beverage, fresh produce, and baby and maternity products.
In addition, JD made further progress in omni-channel retail. In Q3, GMV of JD’s omni-channel business grew by nearly triple digits year-on-year. ASUS, a global technology leader, launched more than 150 ASUS stores on JD Daojia (JDDJ) and “Shop Now”, JD.com’s new on-demand consumer retail section. In September, JD opened its first “JD MALL” physical store in Xi’an providing over 200,000 items from more than 150 brands, in categories including home, furniture, kids, smart healthcare products and auto accessories.
These omni-channel pushes “will serve as our second curve for growth to break the ceiling of JD’s long-term growth,” said Lei Xu. “The (omni-channel) strategy is also designed to facilitate further integration and digital transformation of China’s offline retail sector.”
Speaking of recent global supply chain challenges, Xu said that, “JD will focus on the core strength of supply chain, and this will give us a better position to work together with our partners. Our partners would also like to work more closely with JD to leverage our strengths to help them reduce cost and increase efficacy.”
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