JD-Backed Delivery Platform Dada Predicts Up to 91% Gain in Third-Quarter Revenue
Zhang Yushuo
DATE:  Aug 25 2020
/ SOURCE:  Yicai
JD-Backed Delivery Platform Dada Predicts Up to 91% Gain in Third-Quarter Revenue JD-Backed Delivery Platform Dada Predicts Up to 91% Gain in Third-Quarter Revenue

(Yicai Global) Aug. 25 -- Dada Nexus, an on-demand retail and delivery platform backed by Chinese e-commerce titan JD.Com, said it expects revenue to increase by as much as 91 percent this quarter after a similar gain in the previous three months.

Revenue may increase to between CNY1.28 billion and CNY1.34 billion (USD185 million and USD194 million) in the quarter ending Sept. 30 from a year earlier, the Shanghai-based company said in an earnings report released after the market close in New York yesterday. The projection is subject to uncertainties such as the Covid-19 pandemic, it added.

Dada, which connects delivery staff on motorcycles with vendors in urban areas, foresees a continuation of the burgeoning orders that drove revenue 93 percent higher to CNY1.32 billion in the second quarter. The company aims to double revenue at JD-Daojia, its local on-demand retail platform,in the second half as it forges ahead with plans to expand into more cities.

“In the following quarters, we will continuously expand our geographic coverage bringing more and more people everything on-demand,” Chairman and Chief Executive Officer Philip Kuai said on the firm’s earnings call.

Dada had over 634,000 active riders who collectively delivered 822 million orders in the twelve months ended March 31. Its intra-city delivery service spanned more than 700 Chinese cities and counties, and its last-mile delivery service crisscrossed more than 2,400.

In the three months ended June 30, the firm’s loss widened to CNY457.5 million (USD65.91 million) from CNY316 million a year earlier.

In after-hours trading, shares of Dada Nexus [NASDAQ: DADA], which debuted on the New York market in June, were 6.5 percent lower at US27.99 as of 6.07 a.m. local time today.

‘Mindshare’

The number of orders delivered through its Dada Now service has climbed to 925.6 million from 561.6 million, and the ranks of active consumers on its JD-Daojia, or JDDJ, platform rose to 32.3 million from 18.8 million in the first six months.

“Underpinned by our strengthened cooperation with leading retailers and brand owners, as well as our local on-demand delivery infrastructure, we continue to capture consumer mindshare, particularly within China’s lower-tier cities,” Kuai said in a statement to accompany the earnings release.

JDDJ’s total gross merchandise volume was up 98 percent to CNY18.3 billion from six months earlier. It was one of China’s largest local on-demand retail platforms by GMV last year, and Dada Now was a leading local on-demand delivery platform by number of orders that year, according to Chinese internet market analytics firm iResearch.

Dada has not made a profit since its inception and may not achieve or maintain profitability or positive cash flow in future, it said in a May 12 filing it submitted to the US Securities and Exchange Commission.

It lost CNY1.7 billion (UD236 million) last year after running CNY1.5 billion in the red in 2017 and CNY1.9 billion in 2018. Net revenue was a respective CNY1.2 billion, CNY1.9 billion and CNY3.1 billion from 2017 to 2019. It also came up short more than CNY279 million (USD39.4 million) with a revenue of over CNY1 billion (USD155 million) in the first quarter.

Editor: Ben Armour

Follow Yicai Global on
Keywords:   Dada,delivery,IPO,JDDJ,Dada Nexus