Dada Nexus (DADA.OQ) – Leading Chinese on-demand retail platform accelerates on significant runway
A JD.com subsidiary with growing economies of scale, unlocking growth potential at distressed valuations
Dada Nexus Limited (DADA.OQ) (“Dada”), with a market cap of USD 869.9 million, is one of China’s leading on-demand retail platforms holding around 20% market share behind Meituan (42%, 3690.HK) and Ele.me (24%, Alibaba-owned). Dada, a 54% subsidiary of JD.com (JD.OQ; 9618.HK) and 9% owned by Walmart Inc. (WMT.N) operates two core businesses, namely:
JD Daojia (JDDJ), which is a local non-restaurant online to offline (“O2O”) retail marketplace; and
DADA Now, a crowd-sourced last mile delivery platform which services JDDJ and JD.com orders, as well as logistics companies, merchants, and individual users.
While it can be described as two separate business lines, JDDJ and DADA Now are effectively inter-connected platforms, with the former providing on-demand retail fulfilment for Chinese consumers, and the latter, leveraging the crowdsourcing model to address the challenge of frequent fluctuations brought forward by the nature of on-demand orders.
JDDJ – crowd-sourced delivery offering a vast array of consumer products with rapid delivery times
JDDJ, which constitutes 66% of Dada’s overall revenues, has over 78.6 million active users and facilitated RMB 63.27 billion (USD 8.94 billion) in GMV in 2022, an increase of 26.2% and 46.9% yoy respectively. It is the largest local on-demand retail platform in the China supermarket category with 27% market share in 2021, as per iResearch. With 93 of China's top 100 supermarket chains listed on its platform, including Walmart and Yonghui, JDDJ provides local consumers access to deep inventories.