JD Group to Acquire Dada Group Through Its New Public Offering

Consumer Staples Author: 叶柳 Editor: 张宇喆 Mar 23, 2021 08:00 AM (GMT+8)

JD.Com said on Monday it would invest USD 800 million in on-demand delivery platform Dada Group, after which the e-commerce giant will own 51% of Dada.

Dada

This announcement also shows that this marks the further deepening cooperation in regards to the Omnichannel between the Dada Group and JD. JD fully supports Dada Group's development in the field of local real-time retail and real-time distribution, while Dada Group will strategically undertake the business of JD's real-time retail and real-time distribution, and improve the consumption experience, especially in terms of the convenient and efficient real-time consumption experience.

JD had merged its online-to-offline unit, JD Daojia, with Dada in 2016. Dada-JD Daojia, a Chinese online grocery and delivery firm, then in 2018 raised USD 500 million from Walmart Inc and JD.

JD on Monday also agreed not to sell, transfer or dispose of any shares bought in the deal for six months after the closing.

U.S.-listed shares of Dada jumped nearly 19%, while those of JD were up 0.5% in trading before the bell.

Dada Group was founded in 2014, mainly engaging in the crowdsourcing logistics business and providing real-time distribution services within cities.

Dada Group, with its former name Dada-JD Daojia, changed to its current name in December 2019. It has two core businesses, Dada Express and JD Daojia. 

According to the data of iResearch, Dada Express is the leading real-time distribution platform in China, with more than 634000 riders delivering 822 million orders in 12 months until March 31, 2020.

In addition, according to its public financial report, Dada Group's total revenue in 2020 was CNY 5.7 billion, an increase of 85.2% over the same period last year. Under non-GAAP, Dada Group's net loss in 2020 was CNY 1.168 billion, which is narrower than the net loss of CNY 1.42 billion in 2019. 

However, Dada Group has been losing heavily in recent years. From 2017 to 2020, its annual net loss was CNY 1.449 billion, CNY 1.878 billion, CNY 1.67 billion and CNY 1.705 billion, respectively.

Overall, the cooperation with JD implies opportunities for Dada Group, but there are still some risks existing in its future.