Dada(DADA) - 2023 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total net revenues increased by 20% year-over-year to RMB2.9 billion, with adjusted net margin improving by 11 percentage points [5][18] - Non-GAAP net loss attributable to ordinary shareholders was RMB9 million, a significant improvement from a loss of RMB270 million in Q3 2022 [20] Business Line Data and Key Metrics Changes - Net revenues from Dada Now increased by 29% to RMB1.1 billion, driven by increased order volume for intracity delivery services [18] - Net revenues from JDDJ increased by 16% to RMB1.8 billion, primarily due to an increase in GMV and online marketing services revenue [18] Market Data and Key Metrics Changes - JDDJ onboarded more than 400,000 retail stores, with partnerships established with 93 out of the top 100 supermarket chains in China [8] - GMV for convenience stores grew more than 8 times year-over-year, while GMV for the liquor category more than tripled year-over-year [12][16] Company Strategy and Development Direction - The company aims to facilitate on-demand retail consumption of over RMB1 trillion in the next five years and drive digital transformation for over 2 million brick-and-mortar stores [6] - The five-year plan focuses on consumption, digitalization, and employment, aligning with the strategy for healthy growth in a vibrant community [17] Management's Comments on Operating Environment and Future Outlook - Management noted a recovery in the consumption market, particularly in the supermarket category during the Double 11 shopping festival, despite initial softness in consumer electronics [24] - The company remains optimistic about the long-term increase in O2O penetration and plans to consolidate strengths on the supply side [25] Other Important Information - The Hongtu marketing tool was launched to improve marketing efficiency for brands, with pilot brands seeing a 12% increase in conversion rates [15] - The delivery fee waiver campaign led to improved conversion and retention rates in the supermarket category [41] Q&A Session Summary Question: Trends in Singles Day growth and future consumption - Management observed a decent recovery in growth rates during the Double 11 shopping festival, particularly in the supermarket category, and noted that spending on services continues to outpace physical goods [24][25] Question: Cooperation with JD.com and traffic allocation - Management reported that cooperation with JD.com has strengthened, with significant growth in Xiaoshigou users and improved traffic allocation benefiting Shansong growth [25][27] Question: JDDJ unit economics and future drivers - The monetization rate for JDDJ increased to 10%, with a decrease in consumer incentives to 3.3%, indicating improved unit economics [31] Question: Demand trends post Singles Day and rider costs - Management indicated that it is too early to evaluate post-Singles Day trends, but rider costs have increased due to higher order volumes, with expectations of a decrease in per unit costs year-over-year in Q4 [38] Question: Impact of delivery fee waiver and live streaming initiatives - The delivery fee waiver campaign improved conversion and retention rates, while live streaming events during Singles Day showed promising initial results [41][42] Question: Revenue growth expectations for Dada Now and JDDJ - Management expects both platforms to grow at similar speeds in the following quarters, with the supermarket category accounting for close to 50% of GMV [45]