Dada Group and JD.com accelerate omni-channel operation with launch of "Shop Now"

Rhea-AI Summary

Dada Group (Nasdaq: DADA) and JD.com have launched 'Shop Now', enhancing on-demand delivery services for consumers in China. This initiative allows one-hour delivery through the JD App, with sales increasing by 150% from January to September 2021. The partnership aims to leverage JD's 530 million users, anticipating a 50% penetration into JD's consumer base. With a projected CAGR of 62% in the local on-demand retail market, both companies are positioned for rapid growth in this sector, enhancing their service capabilities and optimizing retail operations.

Positive

• Sales increased by 150% from January to September 2021.
• Anticipated 50% penetration into JD's 530 million consumers.
• Enhanced consumer experiences across various verticals, including supermarkets and pharmacies.
• Projected CAGR of 62% in local on-demand retail market from 2020 to 2024.

Negative

• None.

BEIJING, Oct. 12, 2021 /PRNewswire/ -- Dada Group (Nasdaq: DADA), China's leading local on-demand delivery and retail platform, and JD.com (Nasdaq: JD and HKEX:9618) today announced that they jointly launched "Shop Now", the JD Xiaoshigou, a jointly built new business dedicated for JD's on-demand consumer retail section. Shop Now delivers on the model of "order online, delivery from store, within one hour" and will accelerate Dada Group's and JD's omni-channel operation in the on-demand retail space.

With the launch of Shop Now, Dada Group and JD are advancing on-demand retail from the era of "one-hour delivery" to "minutes delivery". The new business was overall undertaken by Dada Group, enabling consumers to enjoy one-hour delivery service when purchasing products labeled "Shop Now" in the JD App. Through joint efforts in consumer experience optimization, Shop Now has been growing rapidly in the testing phase, with a 150% increase in sales in September compared to January, and attracting an increasing number of JD's 530 million annual active consumers. In the long term, the penetration of on-demand retail into JD's consumers is expected to reach 50%.

"Shop Now is delivering on the promise of on-demand delivery for JD.com's 530 million users while empowering offline stores, and enabling our partners to optimize their operations and drive efficiencies." said Huijian He, Vice President of JD.com and Dada Group, Head of JD Omni-channel Home-Delivery Department. "Shop Now combines the retail capabilities and resources of JD Retail and JDDJ. The enhanced business will provide a comprehensive portfolio of one-hour, on-demand retail capabilities within JD's ecosystem, bringing a faster, better and more economical shopping experience to both consumers and partners."

According to an iResearch Report, GMV of local on-demand retail in the China supermarket segment is expected to grow significantly, with an anticipated CAGR of 62% between 2020 and 2024. On-demand consumption market presents significant growth opportunities.

A key growth driver

Shop Now accelerates the expansion of JD's and Dada's on-demand retail, delivery and omni-channel capabilities. With enhanced solutions and opportunities to expand into additional industries, JD and Dada are diversifying their digital solutions to meet the evolving needs for its retail and real economy partners, helping them reduce cost, optimize efficiencies, and enhance their digital proficiency while delivering faster, better, and broader services to consumers.

Shop Now has delivered enhanced experiences for consumers in verticals including supermarket chains, convenience stores, fresh flowers and pharmacies, and will enable JD and Dada Group to penetrate additional markets. Through the partnership under Shop Now, JD and Dada Group can capitalize on the rapidly increasing on-demand consumption market and drive long-term growth. The companies' enhanced on-demand retail capabilities will enable them to provide integrated solutions through their comprehensive and innovative retail supply chain management, digital operations and marketing expertise.

Dada Group is a pioneer and has been relentlessly exploring in on-demand retail over the last seven years, delivering integrated solutions for delivery fulfillment, sales and marketing, product management, user operation and digitalization. Together, the companies can help retailers and brand owners accelerate their digital and omni-channel capabilities, while reducing cost and improve efficiency.

Shop Now: A joint effort

Shop Now will benefit from the market-tested capabilities of Dada Group's JDDJ, Dada Now and Haibo System, resulting in a win-win partnership for both Dada Group and JD. Dada Group has invested in its on-demand capabilities and expects to continue providing on-demand, location-based retail service for JD's 530 million active consumers, while working to empower business partners to accelerate growth and enhance operating efficiencies.

In a typical scenario, after placing a Shop Now order on the JD App, consumers will receive their products from a JDDJ's partnering store within 3-5 kilometers radius, delivered by Dada Now within one-hour.

Jun Yang, Director and Chief Technology Officer of Dada Group said:" Dada Now is also providing integrated on-demand fulfillment solutions to address the hundreds of thousands of active riders fulfilling orders. Additionally, it identifies issues with warehouse, pickup and package handovers, and allows supermarkets with tens of thousands of online products to efficiently achieve one-hour and even minutes' delivery."

The launch of Shop Now builds on JD's previous retail knowhow and will position both companies as leaders in the on-demand retail business in the era of hyperlocal e-commerce and enhances JD's supply chain model. Through this strategic collaboration, JD will deliver across three different types of retail supply chains: (1) B2C, represented by JD.com, where products are sent from city central warehouse and delivered at the same day or next day; (2) F2C model, represented by Jingxi, where products are sent from their origins to the whole country; and (3) local model, which includes offline stores, community group buying and on-demand retail, among which on-demand retail is represented by Shop Now, leveraging the power of location-based technology to deliver products to consumers from offline stores within 3-5 kilometers.

Connects stores and brands

Shop Now will also play an important role in JD's internal and external supply chain integration, enabling it to fulfill the diversified needs of producers, merchants and consumers. Additionally, the integration infrastructure and smart technology behind Shop Now will deliver significant value across JD's entire supply chain. As Shop Now serves and connects an increasing number of upstream companies and consumers, JD's supply chain capabilities will become even stronger, allowing for enhanced innovation and greater value for the whole industry.

Daniel Tan, Vice President of JD.com and President of Communication Department of JD.com said:" Today there are more than 8,000 mobile phone stores online with JD.com and with this enhanced retail platform, consumers can place an order on JD.com from the comfort of their home and receive their new phones within one-hour, greatly improving user experiences. In addition, Shop Now has driven an increase in sales of Apple's authorized stores on JD.com by an average of 25%."

Ren Tao, Vice President of JD.com, President of Non-food Department, FMCG & Omni-Channel Division of JD.com said:" Shop Now is deeply integrated with FMCG Business, and satisfying consumers' diversified needs by putting additional categories such as small packaged products, ice products and fresh food online, which are different from the traditional ones. Shop Now connects users and JD with on-demand consumption experience. We will continue to strengthen the in-depth integration of the JD app and Shop Now, taking advantages from both, thereby enhancing the user experience and jointly create more value for the industry."

Shop Now is scalable and will continue to expand to more cities. Dada Group will continue to work closely with JD to optimize consumers' shopping experiences, streamline products and services, and increase penetration into JD's annual active consumers to deliver exceptional on-demand retail experiences.

About JD.com

JD.com is a leading supply chain-based technology and service provider. The company's cutting-edge retail infrastructure seeks to enable consumers to buy whatever they want, whenever and wherever they want it. The company has opened its technology and infrastructure to partners, brands and other sectors, as part of its Retail as a Service offering to help drive productivity and innovation across a range of industries.

About Dada Group

Dada is a leading platform of local on-demand retail and delivery in China. It operates JDDJ, one of China's largest local on-demand retail platforms for retailers and brand owners, and Dada Now, a leading local on-demand delivery platform open to merchants and individual senders across various industries and product categories. The company's two platforms are inter-connected and mutually beneficial. The Dada Now platform enables an improved delivery experience for participants on the JDDJ platform through its readily accessible fulfillment solutions and strong on-demand delivery infrastructure. Meanwhile, the vast volume of on-demand delivery orders from the JDDJ platform increases order volume and density for the Dada Now platform. In June 2020, Dada Group began trading on the Nasdaq Global Market, under the ticker symbol "DADA."

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SOURCE Dada Group

FAQ

What is the 'Shop Now' initiative launched by Dada Group and JD.com?

The 'Shop Now' initiative is a new on-demand delivery service that allows consumers to receive products within one hour by ordering through the JD App.

How much did sales increase for Shop Now from January to September 2021?

Sales for Shop Now increased by 150% during this period.

What percentage of JD's consumers is expected to use Shop Now?

It is expected that Shop Now will penetrate 50% of JD's 530 million annual active consumers.

What growth rate is projected for China's local on-demand retail market?

The local on-demand retail market in China is projected to grow at a CAGR of 62% from 2020 to 2024.