Biz / Tech

Business continues to boom for e-commerce firms

Ding Yining
Total gross merchandise volume of JD Daojia for the year ended June 30 was 18.3 billion yuan, a jump of 98.1 percent, the company said in an earnings announcement.
Ding Yining
Business continues to boom for e-commerce firms

Shanghai-headquartered on-demand and new retail service provider Dada Group said total revenue jumped 93 percent to 1.32 billion yuan (US$187.3 million) with increasing adoption of delivery services by offline retailers.

Total gross merchandise volume of JD Daojia for the 12 months ended June 30 was 18.3 billion yuan, a jump of 98.1 percent, the company said in its first earnings announcement since its listing on NASDAQ in June.

Net loss narrowed to 390.4 million yuan, from 451.4 million yuan a year earlier.

Average order value has also remained stable in the second quarter as consumers continued to order from digital channels after coronavirus restrictions were gradually lifted.

Beck Chen,  chief financial officer of Dada Group, expects to grow JD Daojia revenue by 100 percent year over year in the second half of 2020.

"We've seen an increasing number of offline retail partners invest and upgrade their offline delivery and we will continue to closely cooperate with JD Retail to further explore omni-channel new initiatives,” he added.

It expects third-quarter revenue to grow 82-91 percent annually with more adoption of home delivery service from offline retailers.

Dada Now, its crowdsourced delivery platform which serves vendors as well as individual users, saw the number of orders delivered surge 65 percent to 925.6 million in the 12 months ended June 30 from a year earlier.

Unlike an e-tailer, Dada Group's income comes from fulfillment solutions for third-party vendors and physical stores instead of selling its own merchandise.

Grocery and food vendors are early adopters of delivery formats and now many personal hygiene and home-care product makers and even snack companies are also using delivery service to unlock new business opportunities.  

Retailers are setting up their own delivery capabilities or working with third parties to tap shoppers' spontaneous demands for an afternoon snack or ice cream during lunch break.

Dispatch networks have expanded their service to include the delivery of consumer electronics as well as beauty and personal-care items to cater to the on-demand shopping trend. 

Food delivery and lifestyle services site Meituan Dianping last week also reported better-than-expected revenue as core food delivery business showed gradual recovery after the pandemic limited store openings.

Quarterly sales climbed 8.9 percent to 24.7 billion yuan and it recorded 2.7 billion yuan of profit, after reporting 1.7 billion yuan of losses in the first quarter. 

Researcher Chen Liteng at private consultancy China E-commerce Research Center said Meituan has been expanding into fresh food delivery and new retail initiatives to diversify service and thus might encounter strong competition with market leaders like Ctrip and Didi.

The country’s food delivery service surpassed 650 billion yuan last year, with an estimated 460 million users, according to a latest report by iiMedia Research.

"The booming demand for fresh food and grocery delivery attracted many entrants, which means intensifying competition in the second half," Chen added. 

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