How about takeout dada

Since last year, the news of "Dada listing" has come to an end. On the evening of June 5th, Dada Group officially landed on the Nasdaq Stock Exchange at the issue price of 16 USD. As of yesterday's close, Dada's share price is still $65,438 +06.04, which is almost the same as the issue price.

Well, Dada Group can be said to be the only ready-to-use enterprise that has transformed from logistics to business flow. With the resumption of Dada's six-year development, what are the stories behind the listing of "Instant Retail First Share"?

0 1

Take-out, take-out if you lose.

20 14, Kuai Qijia, who graduated from MIT, ushered in his third venture. Prior to this, he worked in McKinsey and Silicon Valley, and was also a founding team member and executive of E-Media and Anjuke.

At that time, domestic O2O e-commerce was in full swing. In Ji Jiaxuan's view, O2O can be split into stores and homes. The core of the store is payment, which belongs to the world of Alipay and WeChat payment; The core of home delivery is logistics, which is characterized by immediacy. If the distribution is solved by the merchants themselves, the cost is really high.

Therefore, with the support of Sequoia Capital, Kuaiqijia founded "Dada" to distribute O2O e-commerce in the form of crowdsourcing. Under the matchmaking of investor Sequoia, Dada got the chance to get in touch with Hungry.

Because the crowdsourcing model can widely absorb the idle people in society, Dada's take-out service was quickly recognized by Hungry and American take-out. Relying on the high-frequency take-out scene, Dada's daily order volume exceeded 600,000, and the part-time delivery staff exceeded 65,438+10,000 in one year. On the anniversary of June 654.38+0, 2065.438+05, it was announced that it had obtained financing of 654.38+billion yuan in the C round.

It should be mentioned that in Dada's C round of financing, there are not only sequoia that has always supported him, but also international crocodile DST. Someone once summed up the local style of DST: only invest in market leaders or companies with potential to become leaders; General companies will strive to invest 1-2 years before listing and hold shares for a long time after listing.

DST's first investment project in China is JD.COM. COM's c round investment. Liu told himself this in My History of Entrepreneurship. 20 1 1, DST founder Yuri found him and cut to the chase. "I can invest up to $654.38+05 billion myself." Moreover, he also claimed that the company he invested in could not be listed for five years, and the later the market would invest, Liu once thought that he had met a liar.

Therefore, the DST family contributed 500 million dollars to JD.COM. COM's C round of financing exceeded $654.38+0 billion. Before listing in JD.COM, DST was the largest shareholder.

DST took a fancy to it and persisted for two rounds, which also showed the strength of Dada in the local life market at that time.

20 15 with the increasing popularity of take-out, the debate on the "light mode" and "heavy mode" of take-out O2O in the market has never stopped. One voice thinks that self-built distribution needs extremely high cost. In the field of take-away O2O, large platforms should burn money to subsidize the scale and hand it over to professionals; Another voice believes that logistics is the underlying service, and everything in O2O is based on distribution. The cost of logistics directly determines the competitiveness of home service.

Dada obviously belongs to the latter. On the one hand, Dada had the largest urban distribution team in China at that time; On the other hand, users and businesses have no loyalty at all. It's basically a question of who has subsidies. In addition, it is not difficult to build a takeaway platform. So, on 20 15, 10, Dada launched the take-away platform "Send Fun" in an attempt to share a piece of the hungry group.

When the fun comes out, it instantly stirs up a thousand waves. Several major takeaway platforms have taken various blocking measures almost at the same time. Many businesses have received a ban: online "fun" will be hungry, the US group, word of mouth, Baidu offline.

Although the front-end traffic was lost, with the help of hundreds of thousands of dealers and high subsidies, Paiqu also completed the accumulation of early users. Six weeks after the launch, the daily order exceeded 1 10,000.

From the side, Dada was also one of the few enterprises that completed the closed-loop process at that time. Kuai Qijia said in an interview with 36Kr, "Dada's fun is mainly to help logistics do better. After online fun, the logistics volume will rise rapidly, and the logistics volume will rise even faster, which will increase the density of orders and dealers and the cost will drop rapidly. This is very important.

Kuai's idea has also been recognized by the capital. February 20 15, 15, DST and Sequoia filled Dada with $300 million ammunition in less than two months, less than half a year after Dada's last financing. With the double blessing of commercial logistics, the valuation of Dada has also exceeded $6543.8 +0 billion, and everything seems to be developing in a favorable direction for Dada.

But at the beginning of 20 16, everything changed. Because the burning speed of the takeaway platform is seriously underestimated, it is difficult to maintain the original "takeaway challenger" posture in less than three months. The city withdrew its station, the service declined, and there was no barrier after the crazy subsidy. Dada is also rethinking the business of sending fun.

At the same time, if you are hungry, the self-built distribution of the group has been completed, and the "big closed loop" that you quickly enjoyed has suffered a serious breakdown. There was a crisis of order in embattled Dada, but the arrival of JD.COM brought new changes to the war situation.

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JD .COM support

April 20 16, Dada and JD.COM merged at home, and Dada was upgraded to "New Dada". After the merger, JD.COM Group acquired 47% of the shares of the new company for $200 million in cash and became the single largest shareholder. The new company includes two major businesses: instant delivery and supermarket delivery. The former CEO of Dada will soon become the CEO of New Dada, and the former head will become the president of New Dada.

It is understood that after the merger with Dada, the logistics cost of JD.COM. The arrival of COM in China has been reduced by half.

In an interview with Geek Park, Kuai Qijia said, "JD. COM orders are delivered by Xindada. Due to scale improvement and algorithm optimization, the unit cost of Xindada in first-and second-tier cities has dropped from 15 yuan two years ago to the lowest in 3 yuan. "

For Dada, the merger will bring resource support to JD.COM. COM business. With the blessing of unbounded retail in JD.COM, Xindada has once again obtained huge financing. On 20 16 10, Wal-Mart made a strategic investment of US$ 50 million in Xindada, and said that the physical store would have exclusive access to JD.COM, and Dada would be responsible for the delivery of all orders.

As early as August of 15, JD.COM invested 43 10/00000 yuan in Yonghui Supermarket. Through this transaction, JD.COM will hold 0/0% of the shares of Yonghui Supermarket/KLOC, and Yonghui Supermarket has officially settled in JD.COM.

20 19 12, Xindada changed its name to Dada group, and its distribution platform was "Dada Express".

Also upgraded to "Dada". According to reports, after the name change and upgrade, the "retail distribution" dual-core drive strategy will be implemented.

At this point, Dada has also completed the transformation from distribution platform to O2O retail platform. It can be said that the closed-loop concept of Kuaijiaqi has been adopted by Dada Group.

On June 5, 2020, Dada Group ushered in a "cloud ringing bell" in Shanghai. It is understood that the amount raised by this listing is about US$ 303 million, and JD.COM and Wal-Mart will be the cornerstone investors to subscribe for the ADS of Dada Group worth US$ 60 million and US$ 30 million respectively at the IPO price.

As the two most important shareholders and partners of Dada Group, JD.COM and Wal-Mart will hold 45.3% and 9.5% shares of Dada respectively after IPO.

03

What is the next step of "Instant Retail First Share"?

At present, there are two main reasons why the outside world is not optimistic about Dada: there are many competitors and it is difficult to make profits.

Throughout the development of instant delivery in 10 years, players who followed the take-away period or rejoined the industry have more or less built their own moat: Meituan take-away can rely on take-away orders to ensure the retention of riders; Hummingbirds are matched with many business groups in Ali; UU running errands and flashing, which started at the same time as Dada, are constantly building user barriers at the To C end.

From the perspective of development, Dada Group's revenue has continued to grow at a high speed in the past three years, and it is in the rising period of enterprises, but its net profit is still at a loss. In 2017/2018/20 19, the net income of Dada Group was12180,000 yuan and19 respectively.

According to the statistics of combustion finance, from 20 18 to 20 19, the number of active consumers in Dada increased from 4.7 million to 24.4 million. However, from 20 17 to 20 19, in order to attract these users, Dada invested 362 10/00000 yuan in JD.COM.

In addition, according to the prospectus, a large part of Dada Group's revenue comes from two major customers, JD.COM Group and Wal-Mart Group. In 20 18, 20 19 and the first quarter of 2020, the revenue brought by JD.COM accounted for 49. 1%, 50.5% and 37.8% of the total revenue of Dada Group respectively. The revenue from Wal-Mart accounted for 4.6%, 13% and 14.9% respectively.

Under such a market background, what is the breakthrough point of Dada Group, because of the loss of net profit, the high cost of acquiring users and the dependence of income on large customers?

This can be seen from the prospectus and internal letter issued in advance.

In terms of stocks, Dada said that the funds raised through IPO will be mainly used to invest in technology and research and development, implement marketing plans and expand the user base. Among them, about 40% is used for marketing activities to expand the basic user base; About 35% is invested in technology research and development, and users and promotion are still the top priority.

In terms of increment, Kuai Qijia said in an internal letter to all employees that e-commerce in China has developed to the instant retail stage, and 80% of the retail still takes place offline. Instant retailing and local e-commerce of retailing will be the biggest historical opportunity.

It may be a good choice to avoid the Red Sea competition in the ready-to-use market and put the market into digital transformation. However, under the background that take-out is still dominated by the instant delivery industry, the effect of this measure still needs to be tested by the market.

Related Q&A: Related Q&A: Why do you rarely see Dada delivering takeout now? Dada can be said to be a relatively old distribution platform. Once upon a time, most riders on the street belonged to Dada platform, but around 20 17, the number of Dada riders dropped sharply at a visible speed, replaced by a sharp increase in the number of US groups and hungry riders. So why is this happening? I think this is caused by two reasons.

1 and dada's unit price dropped too much.

At first, the unit price of Dada was ok, but with more and more riders, the unit price of Dada dropped again. In a big city like Hangzhou, second only to Beishangguang, there were three or even two take-away orders around 20 17. Such a low unit price has greatly hit the rider's enthusiasm for running a single, and soon caused a large number of riders to lose.

2. The order for the takeaway platform is not for Dada.

In the initial stage of major takeaway platforms, the self-built distribution system of these takeaway platforms is not perfect, and major platforms are busy burning money to subsidize businesses and customers. They don't want to invest more money in the distribution system for the time being, so there is no restriction on merchants to send orders to Dada. It can be said that most of the orders of the major platforms at that time were issued by Dada, but later Dada did something that annoyed the takeaway platform. What happened? Dada actually made a take-away platform for fun.

Now the nature of cooperation between Dada and other takeaway platforms has suddenly changed. After seeing it, other take-out platforms began to exert their own crowdsourcing system and took a hostile attitude towards Dada, so Dada's list began to drop sharply. Soon Baidu's take-out was yellow, and there were fewer orders, so the number of riders naturally decreased.

It is precisely because Dada's unit price is low on the one hand, and on the other hand, it can't receive take-away orders, so it is inevitable that a large number of riders will be lost. Fortunately, JD.COM accepted the invitation in time, and with the blessing of JD.COM, Dada began to concentrate on running errands. Although there is competition from SF, uu and Flash, it is not a problem to occupy a place in the errands market. Now it is listed, and its market value is quite high, which shows JD.COM. COM acquisition is quite cost-effective.