On the evening of September 18, Dada Group announced that JD purchased 8748.1280 ordinary shares and 187.5000 American depositary shares held by Wal Mart from its wholly-owned subsidiary through its wholly-owned subsidiary. After this transaction, JD has acquired all the shares of Dada held by Wal Mart, and beneficially owns about 63.2% of the total common shares of the company.
Dada Group said that it hopes to continue to conduct mutually beneficial business cooperation with Wal Mart after the completion of the transaction. In addition, the further investment by JD, the company's largest shareholder, demonstrates the unique role that Dada plays in JD's broader ecosystem, and also reflects JD's confidence in Dada's long-term growth and development. Affected by this news, Dada's stock price rose by 21.70%, with a stock price of $1.29 and a market value of $341 million.
According to insiders at JD.com, this move demonstrates JD's strong confidence in Dada's long-term and steady development, as well as its optimism and recognition of Dada's future prospects, the importance it places on Dada's position within the JD ecosystem, and the expectation for further deepening the strategic partnership between the two parties.
Dada was founded in 2014. In 2016, Dada merged with JD Home, an O2O subsidiary of JD Group. In December 2019, the merged Dada JD Home was officially renamed Dada Group. In June 2020, Dada landed on the US stock market, becoming the "first instant retail stock" listed by China in the US. With the help of JD Home platform and Dada delivery, it achieved "dual wheel drive" development. At the time of listing, JD and Wal Mart held 45.3% and 9.5% shares of Dada Group respectively.
On March 22, 2021, JD.com announced that it will subscribe to Dada Group's newly issued common stock for $800 million. After the transaction is completed, JD.com will hold approximately 52% of Dada Group's shares. This marks a further deepening of omnichannel cooperation between both parties, with JD Group fully supporting Dada Group's development in the local instant retail and instant delivery fields. In October of the same year, JD Group and Dada Group jointly launched "Hourly Purchase", integrating the instant retail capability of providing hourly delivery services for goods within the JD ecosystem. In February 2022, JD Group and Dada Group completed their increase in holdings.
With the acceleration of the integration between JD.com and Dada, Dada's performance is also tending to improve. In the second quarter of 2023, Dada, which had been consistently losing money, achieved its first overall profit after going public. This quarter, Dada Group and JD.com further strengthened their synergy, and JD.com renamed its instant retail service as "Hourly Delivery", which Dada Group will fully undertake. In October 2023, JD Instant Retail released the "Happiness Three Kilometers" model, which builds a model led by JD Open Platform, providing three core capabilities of digitalization, local supply chain integration, and instant delivery, and achieving an efficient closed-loop of "consumer ordering, store shipping, and product delivery within 3-5 kilometers".
In May of this year, JD's instant retail business (integrating the original instant retail brands JD Houleda and JD Daojia) was fully upgraded and launched JD's instant delivery service. In August, Dada Express was renamed Dada's instant delivery service. As a result, the ecosystems of both parties are further integrated, and according to statistics, the penetration rate of JD's instant messaging service among JD users continues to increase month on month. Dada executives said during the earnings conference call, "Since the beginning of this year, we have fully embraced the JD ecosystem, promoted user experience upgrades, and maintained rapid growth in GMV and user base on JD's application channels. Our competitive advantage lies in the richness of supply side products and the great integration with JD on the demand side, which will drive us to increase market share in the growth of the on-demand retail industry
As for whether this transaction will affect the cooperation between Dada and Wal Mart, insiders of Dada said that this transaction is only a change in equity investment, and the relationship between Dada and Wal Mart at the business level will not be affected. Both parties are still important strategic partners of each other, and they expect to continue to maintain stable cooperation and long-term business contacts in the future.