• Total Net Revenues: RMB2.4 billion in the third quarter.
• JD NOW Net Revenues: RMB930 million in the third quarter.
• Dada NOW Net Revenues: Increased by 39% year on year to RMB1.5 billion in the third quarter.
• Non-GAAP Net Loss: RMB59 million in the third quarter.
• Non-GAAP Net Loss Margin: 2.4%, narrowing by 3.7 percentage points sequentially.
• Operations and Support Costs: RMB1.7 billion in the third quarter.
• Selling and Marketing Expenses: Decreased to RMB717 million.
• General and Administrative Expenses: RMB108 million.
• Research and Development Expenses: RMB90 million.
• Number of Orders Delivered by Dada NOW: Increased by 36% year on year to 648 million.
• Gross Billings of Dada NOW: Grew by 33% year on year to RMB3.10 billion.
• Number of Operating Stores: Increased by over 70% year on year to more than 600,000 stores.

• Warning! GuruFocus has detected 4 Warning Signs with DADA.

Release Date: November 14, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• JD NOW experienced over 100% year-on-year growth in monthly transacting users and orders through the JD App.
• Dada NOW's net revenues increased by 39% year-on-year to RMB1.5 billion, driven by strengthened partnerships with chain merchants.
• Non-GAAP net loss margin narrowed by 3.7 percentage points compared to the previous quarter, indicating improved cost efficiency.
• The number of operating stores increased by over 70% year-on-year to more than 600,000 stores, enhancing product offerings.
• Average fulfillment time for JD NOW orders was shortened by more than 20% year-over-year, improving delivery efficiency.

Negative Points

• Net revenues from JD NOW were impacted by a decrease in online advertising and marketing services revenues.
• Operations and support costs increased to RMB1.7 billion, primarily due to higher rider costs.
• General and administrative expenses rose due to an increase in provision for credit loss and litigation-related expenses.
• Selling and marketing expenses decreased, reflecting reduced promotional activities on the JD NOW platform.
• Despite narrowing, the company still reported a non-GAAP net loss of RMB59 million for the quarter.

Q & A Highlights

Q: How do you see the recent government support policies and consumer sentiment trends affecting the on-demand retail business? A: Jun Mao, CFO: We believe boosting consumer confidence is crucial for China's economic growth. The on-demand retail sector is one of the fastest-growing subsectors. We see significant room for JD NOW's penetration among JD users. Our integration with the JD ecosystem offers substantial upside, and we are committed to enriching high-quality supply across various categories. The synergies between JD NOW and Dada NOW platforms enhance our competitive edge, improving delivery efficiency and service quality.

Q: Can you elaborate on the user profile acquired through JD channels and any impact from recent promotions? A: Jun Mao, CFO: Users from JD.com have strong purchasing power and demand quality and timeliness. Our strategy to integrate with JD.com has led to significant improvements in operational metrics. The click-through rate and transaction conversion rate have increased, with monthly transacting users and orders growing over 100% year on year. The repeat purchase rate has also increased, and JD PLUS members' engagement has shown high-double-digit growth.

Q: What are the competitive advantages of Dada Nexus in the on-demand retail and delivery industry? A: Jun Mao, CFO: Our competitive advantages include enriching product offerings, deep integration with JD.com, and synergies between JD NOW and Dada NOW. These factors help us increase user mindshare and market share. The average fulfillment time for JD NOW orders has improved by over 20% year on year, reinforcing our reputation for quality products and instant delivery.

Q: How has the collaboration with JD.com impacted Dada Nexus's growth? A: Jun Mao, CFO: The collaboration has significantly enhanced our growth prospects. The integration with JD.com allows us to tap into a user base with strong purchasing power. Our efforts in enriching product offerings and improving service quality have led to increased user engagement and repeat purchases. The launch of JD NOW brand flagship stores further strengthens our position by connecting brands with nearby consumers.

Q: What are the future growth strategies for Dada Nexus? A: Jun Mao, CFO: We will continue to focus on high-quality growth, improving user experience, and increasing mindshare in on-demand retail. We aim to leverage synergies between our retail and delivery platforms for sustainable growth. Our strategy includes expanding product categories, enhancing delivery efficiency, and integrating further with JD.com's ecosystem.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.