Dada, deeply tied up with JD.com, needs to fight the price war when going to the US for immediate delivery?

Dada, deeply tied up with JD.com, needs to fight the price war when going to the US for immediate delivery?
On May 13, Beijing time, the instant delivery company Dada delivered a prospectus to the US Stock Exchange (SEC) and planned to list on the NASDAQ exchange under the symbol of DADA. The amount of funds raised from the IPO was 1 billion.Dada Group was established in 2014. In 2016, it became a “JD.com” enterprise due to the acquisition of JD Daojia business-JD.com’s shareholding ratio before the IPO reached 51.4%, and the proportion of net income from JD last year reached 37.8%.Dada is in the field of instant express. After the big waves of around 2015, some of the surviving companies chose to rely on JD.com, Ali and other big trees, and some of them focused on vertical areas as small platforms.Some express experts believe that there will be a single IPO enterprise in the field of instant logistics this year, and the price war is likely to start in this field.The cost of Dada riders is high, and the income associated with JD accounts for more than 50% of the total net income. The prospectus shows that the net income of Dada Group was 1.2 billion, 1.9 billion and 3.1 billion US dollars from 2017 to 2019, but the net shortage was notSignificantly narrowed, the company’s net worth between 2017 and 2019 was 1.4 billion, 1.9 billion and 1.7 billion, respectively.From the perspective of income composition, Dada Group’s net income mainly comes from instant delivery and JD Daojia, which contributed 63% and 35% respectively last year.6%.According to the prospectus, Dada currently provides in-city distribution services in more than 700 cities and counties in China, and the “last mile” service covers more than 2,400 cities and counties.Similar to Meituan ‘s comments, Dada ‘s main cost is the payment of the rider ‘s salary, but Dada ‘s riders are mainly crowdsourcing and agency models. Riders are not regular employees of the company, which can reduce operating costs to some extent.According to the prospectus, Dada Group ‘s rider payment costs from 2017 to 2019 were 15.26.7 billion, 19.18.3 billion and 26.$ 79.1 billion, which is comparable to the company ‘s net expectations.Stimulated by the new crown epidemic, Dada Group’s net income increased significantly by 108 in the first quarter of this year.9% reached 10.99.6 billion US dollars, mainly due to Dada platform delivery services and orders from JD Daojia increased by 50% each year, resulting in an increase in net income.Judging from the information disclosed in the prospectus, JD.com is the largest shareholder of Dada Group, and it is the main contributor to net income.Before the IPO, Sunflower Investment Holdings, a subsidiary of JD.com, held 51% of the shares in Dada Group.4%, Sequoia China Affiliated Investment Fund holds 11 shares.4%, Azure Holdings holds 10.8%.Dada founder Kua Jiaqi holds 8.9%, co-founder and CTO Yang Jun holds 1.9%.In the board of directors, Jingdong Group has three seats, Xu Lei, CEO of Jingdong Retail, Wang Zhenhui, CEO of Jingdong Logistics, and Xu Ran, who will soon become the CFO of Jingdong Group, appoint directors of Dada Group.In addition, the prospectus also shows that Dada Group’s net income from Jingdong Group was 56% between 2017 and 2019.7%, 49.1%, 50.5%, this proportion dropped to 37 in the first quarter of this year.8%.According to the company, as of March 31 this year, 30% of JD Daojia’s traffic in the past 12 months came from JD’s official website.The high proportion of related income is a problem that Dada Group needs to solve as soon as possible. From 2017 to 2019, the related income of Dada Group was 6 respectively.9.1 billion, 10.32.5 billion and 19.67.7 billion, accounting for more than 50% of the total net income.Although the cooperation contract between the company and JD.com and Wal-Mart is still years away, the high proportion of related income will affect the market’s evaluation of the company.Will there be a “price war” in the field of instant logistics this year?Dada, established in 2014, initially had only errand services.At that time, multiple instant logistics (same city) platforms appeared, cutting into the instant logistics market that traditional express companies such as three links and one express did not fully cover in a crowdsourcing mode.With the entry of multiple companies, the supplementary war is coming.According to Du Shangqian, Vice President of Flash Delivery, the O2O cold winter hit in 2015, “We stopped replenishment in September of that year, and all companies that did not stop later died.”Counting the immediate delivery company that fell at the time, Aegis Express, the most rare thing was that it fell on the broken capital chain.Part of the real-time logistics companies that survived that year, such as Dada and Dianda, were collected by JD.com and Ali; the other part, such as flash delivery, UU errands, etc., focused on vertical small platforms.Nowadays, the situation is so serious that the shops took orders from the take-out platform and then distributed through Dada and other real-time logistics platforms.Various life service platforms have already built their own logistics. In April 2015, they were hungry and launched the hummingbird system. The logistics platform was opened in August of the same year.Meituan crowdsourcing, etc.Dada stopped repeating the errand business after standing in Jingdong.Public information shows that Dada has cooperated with supermarkets, convenience stores, pharmacies, etc., relying on Jingdong to extend its business to warehousing and floor distribution.Express expert Zhao Xiaomin analyzed that in 2020, it is expected that there will be 1-2 IPO companies in the field of instant logistics, and this field is also likely to start a price war, and the intensity will be more intense than in the past.Zhao Xiaomin also pointed out that more real-time logistics companies still need to continue to consolidate the C-end, and at the same time upgrade their system solutions and deliver accurately.In the instant logistics industry, the super-flow entrance is still the king of solving problems.Meituan distribution, hummingbirds are ready for delivery, Dada, etc. all undertake super traffic from Meituan, Ali and JD.com.On the other hand, Meituan, Alibaba, JD.com, etc. have continued to build their own new retail layout, gradually launched the errand business, etc., and continue to grab the cake of instant logistics.In addition to the above-mentioned life service providers, traditional express delivery giants are also focusing on the field of instant logistics.In October 2019, SF Express announced that the same city business will operate independently in the form of a company, and independently operate the “SF Express City Express” brand, which means that SF Express has also entered the market to grab the instant logistics market.However, instant delivery has been regarded as a market segment actively intervened by express delivery giants. At present, except for SF Express, other express delivery companies have not yet made major moves.In 2017, Yuantong launched the “Timed Express”. In 2018, Yunda launched the instant delivery platform “Cloud Delivery”, but none of them caused much waves.The internal staff of the three links and one communication all conveyed similar information to the reporter: Compared with the small cake of instant logistics, it is more important for the traditional courier company to do the existing business of the company.Some people in the industry also weighed in and reorganized. The merger of traditional express delivery companies has a performance-tested long-tail market. Restructuring, in the face of more stable real-time logistics layout, traditional express delivery companies are more difficult to break through.Sauna, Ye Wang Lu Yifu Cheng Zijiao editor Zhao Ze proofreading Li Ming