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Article / Wang gangsong
Source: deep echo
In the past double 11, the last payer has become a new hot word. From the response of social network, one of the feelings of “tailors” this year is that the delivery speed of e-commerce platform is faster.
Last year, “defensive delivery” has become a hot topic on social networks. This year, “delivery in seconds” has become more common. Behind this is the reality of profound changes in the logistics system: micro distance e-commerce represented by intra city distribution is occupying an increasingly important position in people’s lives.
Shortly after the double 11, dada group handed in its second financial report after its listing on November 20, Beijing time. Before the release of this quarter’s financial report, many investment banks made optimistic forecasts for dada:
Daiwa Securities covered dada group for the first time, and gave a purchase rating target price of $40;
New street research covers dada group for the first time, and its growth rate can be expected to give a buy rating with a target price of $40;
Goldman Sachs gave a buy rating and raised its target price to $36;
Haitong International believes that dada group confirmed the good fundamentals and raised the target price to 38.8 US dollars.
From the financial report, dada’s performance is not disappointing. The third quarter financial report shows that:
Dada’s total revenue in this quarter was 1.302 billion yuan, compared with 702 million yuan in the same period of 2019, with a year-on-year increase of 85.5%.
The revenue of dada express delivery platform increased 81.3% year-on-year to RMB 719 million, and the revenue in the same period of 2019 was RMB 397 million.
The revenue of Jingdong home platform increased by 91% year-on-year to RMB 583 million, which was RMB 305 million in the same period of 2019.
At the same time, the net loss attributable to common shareholders of dada group is shrinking. The financial report shows that the net loss attributable to common shareholders of dada group is 434 million yuan, and that of common shareholders is 685 million yuan in the same period of last year.
Between the increase and decrease, dada group’s scale effect continues and the signs of operational efficiency improvement have become increasingly obvious.
Since the beginning of this year, the home track has broken out. As the head player, dada group’s performance is a reflection of the whole real-time retail market. In front of the big market opportunities, what kind of internal training has dada group done? What impact will these layouts have on dada and the industry?
Revenue increased and losses narrowed
Let’s take a detailed look at dada’s financial report.
Dada group achieved operating revenue of 1.302 billion yuan in this quarter, with a significant increase of 85.5% year-on-year; the company’s net loss under non GAAP was 324 million yuan, down 21.2% compared with the same period last year, and continued to narrow year-on-year.
In terms of revenue composition, the main revenue source of the company is local instant delivery service dada express delivery and local instant retail service Jingdong Jiajia, accounting for nearly 99% of the company’s total revenue, while the commodity sales revenue is only 14 million yuan.
In terms of specific business lines, dada express delivery achieved an operating revenue of 719 million yuan in this quarter, an increase of 81.3% compared with 397 million yuan in the same period of last year, while Jingdong home service achieved 583 million yuan in this quarter, with a year-on-year growth of 91%. It can be seen that it is the rapid growth of the company’s real-time distribution and instant retail business that has brought about the stable and high-speed growth of the company’s overall revenue.
With the development of online consumption habits in the post epidemic era, the company’s overall number of users and orders have achieved a qualitative breakthrough, which is also the core driving factor to boost the rapid growth of the company’s revenue.
In this quarter, the number of active buyers of Jingdong home in the past 12 months has reached 37.3 million, a year-on-year increase of 76.8%, and a net increase of more than 5 million compared with the previous quarter. In terms of total sales amount (Gmv), the transaction amount of Jingdong home reached 21.3 billion yuan in the past 12 months, with a year-on-year increase of more than 100%.
In terms of dada express delivery, the number of delivery orders of the company in the past 12 months exceeded 1 billion for the first time in this quarter, an increase of more than 50% compared with 636 million orders in the same period of last year.
In addition to the rapid improvement of revenue and business scale, dada group is also continuously and rapidly improving its operational efficiency. In this quarter, the company made a gross profit of 283 million yuan, a year-on-year increase of more than five times, far higher than the growth rate of the company’s revenue. The company’s gross profit rate also reached a record high of 21.8%, higher than 6.3% in the same period of last year.
The substantial improvement of the company’s gross profit level is mainly due to the company’s effective control of rider cost while the business scale is growing rapidly. Although rider cost is still the heaviest cost source of dada group, it can be seen that with the rapid growth of platform scale, the unit cost of rider is rapidly decreasing. This continuous upward trend further proves the feasibility of the company’s business logic and the basis for the company’s overall profitability in the future.
In terms of loss, dada group’s non GAAP net loss in this quarter was 320 million yuan, the net loss rate was 23.9%, and the loss was significantly narrowed compared with the same period last year.
The sharp narrowing of dada’s loss is due to the continuous improvement of its gross profit level and its efforts to reduce costs and increase efficiency in terms of operating expenses. In this quarter, the company’s total operating expenses were 740 million yuan, a year-on-year increase of 34.3%, far lower than the company’s revenue growth rate; the company’s operating expense rate was 56.8%, also lower than the same period last year.
It can be seen that the key message of dada group in this financial report is that in addition to growth, the health of business model is continuously improving.
While dada Group continues to optimize its business model, the development dividend of Jiajia racetrack continues to release. According to the Research Report of CSCI, there is still a large space for the market scale of China’s supermarket home industry from the mature market. It is estimated that the penetration rate of supermarket retail line will reach 10.6% in 2023, and Gmv will reach 385.4 billion yuan. In the mature period of instant retail development, the online penetration rate is expected to exceed 30%.
Dada’s performance is consistent with the industry trend: the Kwai DAT, which has just been in the past eleven years ago, has achieved a breakthrough of 10 million in November 12th, reaching a new peak of the platform. From 10:00 to 11:00 on the 11th, the number of delivery orders on the platform exceeded 1.1 million, breaking the record of 1-hour peak volume of the platform in the same period. Over 99% of the delivery platform from December to January.
On the whole, the market of instant distribution has become larger and larger, and the habits of consumers and the demand of merchants will continue to promote the further development of the instant distribution market.
As a player in this field, after the industry has entered a period of accelerated development, dada group’s construction around business flow and logistics is also continuing. The cultivation around the content is the key to determine dada’s future prospects.
Develop and sink, continuously improve efficiency
Among a number of new economy companies, dada group’s business has certain particularity.
Dada group, which is formed by the merger of dada express and Jingdong Jiajia, is divided into two parts: one is that Jingdong Jiajia realizes the real-time online sales of huge quantities of SKUs through the extensive connection of offline retail; the other is that dada express delivery realizes the rapid distribution of huge quantities of packages through extensive connection with riders.
In addition to the 85.5% year-on-year growth in total revenue in this quarter, other data of dada group are also in a high-speed growth trend
In the 12 months up to September 30, 2020, dada express delivery platform has delivered 1 billion orders.
During the 12 months up to September 30, 2020, the total transaction volume (Gmv) of Jingdong home platform was RMB 21.3 billion, and that of the same period as of September 30, 2019 was RMB 10.5 billion, with a year-on-year increase of 102.9%.
In the 12 months up to September 30, 2020, the number of active consumers of Jingdong home platform was 37.3 million, and that of the same period as of September 30, 2019 was 21.1 million, with a year-on-year increase of 77.1%.
From the data, we can see that the network effect of dada and Jingdong home is continuously increasing.
The epidemic situation is one of the major external reasons for dada group’s continuous performance.
During the epidemic, the demand for home broke out, which provided a window period for the development of instant distribution enterprises. In the long run, with the continuous penetration of mobile Internet, the construction of business flow and logistics will be more perfect and three-dimensional, and the local life e-commerce will inevitably become mature, and the supporting supply chain system will continue to stimulate the market demand for instant distribution.
In this regard, China CITIC construction investment said in the research report that the high-speed shopping penetration rate in the domestic market has established a high industry ceiling for home business. The increasing online shopping penetration rate year by year shows that Internet users are increasingly inclined to online shopping and home delivery mode, and online shopping user groups will become potential consumers of local retail and instant distribution in the future. During the epidemic period, instant distribution can meet the safety needs of consumers and reduce the chance of contact with the outside world while obtaining daily consumer goods. According to the forecast of CSCI, the order volume of instant distribution industry is expected to reach 47.3 billion in 2023.
In the face of opportunity, everyone is equal. Although the background is good, it still requires players to make continuous investment and layout based on their insight into the nature of the industry to seize the opportunity.
Combined with the recent series of actions of dada group, we can see that apart from the external environment, many layout based on the core competitiveness of dada group is the key.
First of all, Jingdong home, which is widely connected with offline retail, has accelerated its expansion in four aspects: region, category, channel and partner by seizing the window period of market development.
Specifically, in terms of region, sinking the market is the current focus of Jingdong home. In addition to Wal Mart and Yonghui supermarkets, Jingdong Jiajia also signed more than 20 top 100 and regional leading supermarkets such as Eurasia and Zhenhua supermarkets in this quarter, deepening cooperation with jiajiayue and step-by-step regional leaders, and making efforts to sink the market. At a telephone call for investors on the morning of November 20, Kuai Jiaqi, founder, chairman of the board of directors and CEO of dada group, said that as of the third quarter, Jingdong home had covered more than 1200 counties, districts and cities across the country, and more than 200 counties, districts and cities were added in a single quarter. In the third quarter, sales of low-level cities increased by 170% year-on-year.
In terms of category, Jingdong home has carried out many innovative attempts, and 3C digital is a typical attempt.
Since last year, Jingdong home has started to lay out 3C digital field, broadening the boundary of instant retail. This year, Jingdong home has reached cooperation with dozens of Apple authorized dealers across the country, completing the exclusive launch of stores one after another, providing the experience of buying iPhone 12 from Jingdong home and delivering it in one hour.
In addition to 3C digital, Jingdong home is also expanding pet, medicine and other categories. In mid September this year, Jingdong Jiajia was connected to 1000 stores of xinruipeng group, a pet enterprise. Pet owners can enjoy the consumption experience of placing orders online through mobile phones and sending pet goods to their homes in one hour. In terms of medicine, public information shows that Jingdong home has reached cooperation with more than 70 chain drugstores, 90% of the top 50 have been online, and Jingdong home has covered the top 10.
In addition, in terms of channels, the collaborative relationship between Jingdong Jiajia and Jingdong’s main app has been further strengthened through the natural selection project, so that the main app of Jingdong can seamlessly connect with dada’s services. In addition to providing Jingdong with commodity retail services based on geographical location, it has also imported more customers for dada. In terms of partners, based on Haibo system, retailers and brand merchants will continue to be enabled to promote the online and digital transformation of offline retail formats. According to introduction, dada Haibo system has been deployed and applied in about 1500 large and medium-sized chain stores. So far, it has connected nearly 35000 physical stores of more than 200 retailers.
With the multi-dimensional development, JD home provides more diversified services for users, and its connection with offline retail is also more extensive and in-depth.
With Jingdong home to expand the breadth and depth of business connections, dada express is iterating around service quality, network scale and underlying technical support.
In terms of service quality, in July this year, dada express launched “all-in-one delivery”, which dynamically matches the “crowdsourcing” or “crowdsourcing + store” transportation capacity according to the store’s performance timeliness requirements, order categories, single volume changes, peak time and other characteristics, and provides customized transport capacity solutions to maximize the use of human efficiency.
At the same time, we should further improve the three business scales of instant distribution, landing distribution and personal distribution, so as to achieve wider coverage and improve the ability of performance. The double 11 results have fully proved this point.
It is worth mentioning that the improvement of service quality and scale of dada express is inseparable from its investment in underlying product technology. Taking Anxin delivery as an example, the reason why dada express can customize service specifications according to the needs of chain brands in different formats and regions comes from its intelligent analysis of performance big data, judging the different needs of stores, and then matching With corresponding services, it needs the support of artificial intelligence, big data analysis, cloud computing and other technologies. These invisible efforts have become the “hard core battlefield” in the field of instant distribution, which determines the long-term operation efficiency and service quality of the platform.
As mentioned above, the basic market of dada group is composed of Jingdong Jiajia and dada express, and the positive interaction between them is the driving force for dada group’s sustainable growth: the greater the order volume and order density, the greater the network effect of dada, thus attracting more knights to join, enriching the platform transportation capacity and optimizing the performance experience; the improvement of dada Express’s performance experience will accelerate offline businesses The circulation of goods can also provide better services for consumers, and further promote Jingdong home to attract more retailers and brand merchants to join.
Thanks to the expansion of regions, categories, channels and partners, Jingdong home reach businesses continue to expand, which means that it can provide consumers with more diversified choices, further promote the order volume and order density, and enlarge the attraction to Knights. Dada express delivery, focusing on the continuous investment of instant distribution, landing distribution and personal distribution, has further improved its own performance ability and enhanced the attraction of the platform itself to businesses.
From the results, the continuous investment around Jingdong home and dada distribution has not failed to live up to the expectations of dada group. The continuous growth data of Q3 financial report and the narrowed loss have shown that the network effect of dada group is continuously enlarging.
On the whole, dada group, which has been working hard on the track for a long time, has established its own barriers; after stepping on the middle wind, it will further promote its own future development by taking advantage of the opportunity to speed up the layout. Under the joint action of internal and external factors, the future development of dada group still has a lot of imagination.
(statement: This article only represents the author’s point of view, not Sina’s position.)