Dada Group recently released its Q1 2022 financial results, showing significant growth. Among them, JD Daojia's revenue reached RMB 1.4 billion, up 80% year-over-year. Despite multiple external pressures, the company still delivered a strong performance.
JD Daojia, as a well-known leader in the instant retail sector, was previously covered and analyzed by New Distribution. Months later, JD Daojia continues to show strong growth momentum. According to financial data, as of March 31, 2022, JD Daojia's total GMV reached RMB 49.1 billion, up 74% year-over-year.
Behind the growth in platform GMV, there must be substantial business increments for brand owners.
How to achieve high-quality growth is also a topic of urgent concern for every brand owner in the current volatile market environment and increasingly fierce competition.
Especially for top-tier brands, after completing product matrix design, brand awareness building, and nationwide regional coverage, they face higher requirements and challenges in shifting from quantitative growth to qualitative growth and further tapping into consumer demand.
JD Daojia provides answers for brand owners seeking business growth through its digital capabilities and traffic potential. This article aims to provide a three-dimensional interpretation from the perspective of brand owners, explaining how JD Daojia delivers tangible value for brand breakthrough growth.
Let's start with the conclusion: JD Daojia's tangible value to brand owners can be summarized in two dimensions:
- Basic connection: The platform has traffic, users have demand, and fulfillment is guaranteed.
- Deep empowerment: Create scenarios, tap into demand; regional insights, improve efficiency.
Basic Connection: Platform Has Traffic, Users Have Demand, Fulfillment Is Guaranteed
The financial report discloses that JD Daojia had 67.9 million active consumers in the 12 months ending March 31. On top of the platform's own traffic, it also has the ability to acquire high-quality traffic, thanks to deep synergy with JD.com. In October 2021, Dada Group and JD.com jointly launched JD Hours, placing it in the "Nearby" channel at the top right of the JD APP. This can be considered the best traffic entry point, reflecting the importance the entire JD system places on instant retail.
Omnichannel strategy has become a consensus in the retail industry. JD Hours deeply connects with offline physical retail formats, helping retailers seize digital transformation opportunities and bridge online and offline channels. With Dada Group fully undertaking operations, JD Group provides traffic support. Products in the JD APP with the "JD Hours" label allow consumers to enjoy hourly delivery upon ordering.
According to official public introductions, JD Hours aims to penetrate 50% of JD users and is a collection of instant retail capabilities within the JD ecosystem. This also marks JD's full-scale push into instant retail, with a localized supply chain model that will create a second growth curve for JD.
Returning to consumer demand, instant retail corresponds to instant consumption needs. Nowadays, with the abundance of goods, consumer demand at the product level has shifted from whether it exists, to whether there is enough, to whether it is good. Once good products are available, whether they can be obtained instantly is an important dimension in consumers' pursuit of quality life.
Except for virtual goods, strictly speaking, physical goods cannot achieve true "see and get" but can only approach it infinitely. From the past three-to-five-day delivery, to one-to-two-day delivery, and now to the hourly and minute-level delivery satisfied by JD Daojia.
Instant retail is a definite trend. The instant retail format, represented by JD Daojia, has evolved and extended through the catalysis of consumption upgrades in recent years.
According to the "Supermarket O2O Channel Shopper Observation" report, purchase needs in the supermarket O2O channel are not limited to instant needs but also include multiple motivations such as stockpiling, replenishment, finding promotions, discovering new products, and casual browsing. In terms of scenario penetration, besides habit formation, there are also high-frequency scenarios like "lazy" personality, "tight" time, and "bad" weather.
In terms of fulfillment and delivery, Dada Now, the local instant delivery platform under Dada Group, provides instant fulfillment guarantees for the "last mile" of goods.
Unlike food delivery, instant retail fulfillment is more complex, covering warehousing, picking, and delivery. Dada Now was the first in the industry to propose a "warehouse-picking-delivery" integrated full-chain solution for retailers.
Based on digital capabilities such as the Haibo system, Canghai system, and smart logistics system, Dada Now comprehensively upgrades the three major links of store warehousing, picking, and delivery. During this year's 415 same-city shopping promotion, Dada Now provided stable and professional instant fulfillment services to over 150,000 physical stores in more than 1,700 counties, districts, and cities nationwide.
In the warehousing and picking stages, Dada has accumulated nearly 40,000 crowdsourced pickers for picking services. In the delivery stage, hundreds of thousands of riders ensure sufficient capacity.
In summary, high-quality user traffic, definite demand trends, and stable instant fulfillment guarantees form the foundation of JD Daojia's value to brand owners.
Deep Empowerment: Digital Capabilities Help Brand Owners Tap Potential and Improve Efficiency
What does tapping potential mean? Take a typical case: during the 520 period, consumers planned to buy a bouquet of flowers for their loved ones. When entering the platform, they saw the "flowers and chocolate are a perfect match" package scenario created by the platform and merchants, which stimulated them to buy more.
The establishment of such marketing scenarios comes from the platform's deep insight into demand. Today's marketing activities are no longer just issuing a promotional coupon or running a simple promotion; behind them is insight into user needs and operation of scenarios.
The marketing activities created by JD Daojia, based on categories, brands, and new products, aim to trigger consumers' "passive demand" through multi-scenario linkage, satisfy their pursuit of quality life, thereby amplifying brand voice and increasing business increments.
According to public data, JD Daojia's innovative marketing initiatives in Q1 included launching the "Good Products Home" marketing IP, which brought popular products to users based on the latest consumption trends, helping brand owners create trending bestsellers. In March, JD Daojia launched the "Organic Good Products" themed marketing campaign, during which sales of milk and milk powder products from brands such as Mengniu, Wyeth, and Junlebao increased by over 100% year-over-year.
In Q4 2021, JD Daojia joined forces with four major brands—P&G, Coca-Cola, Snickers, and Yili—to launch the first Super Alliance campaign, during which GMV increased by approximately 200% year-over-year.
In terms of improving efficiency, JD Daojia provides brands with the Kunce system tool by deeply connecting with leading offline retailers, enhancing regional management operational efficiency.
For brand owners, leading offline retail stores are core business sources, and in some categories, key offline retail stores contribute more than 50% of overall business. How to effectively manage leading offline retail stores nationwide, thereby increasing market share and efficient investment, has always been a key concern for brand owners.
Based on this pain point, the digital management tool Kunce system can help brand owners improve management efficiency, innovate brand marketing capabilities, and assist brands in achieving precise supply chain efficiency optimization in areas such as precise supply, inventory management, sales promotion improvement, and price regulation.
How is it applied specifically?
Through platform and brand definitions, cities are divided into grids. For key cities and high-quality grids, product supply coverage and dynamic inventory management are observed. For general cities or problematic grids, targeted increases in online coverage of key brand products are made, i.e., product listing. At the same time, merchants are linked to improve store displays, ensure advance stocking, precise marketing, and increase product sell-through rates.
Through this series of operations, the final result is improved sales for brand owners' leading offline retail stores in terms of product distribution coverage and promotion of key products.
As of Q1, Kunce has served over 30 partner brands in categories such as food and beverages, grain and oil, maternal and infant, and daily chemicals. Since Kimberly-Clark adopted the Kunce system, the supply coverage of its core product Kotex in China Resources Vanguard increased by over 20 percentage points during the 3.8 promotion, with sales increasing by more than 20 times month-over-month.
The improvement in retail digital capabilities achieved through Kunce is a manifestation of the deep empowerment based on technology and tools that JD Daojia can provide to brand owners.
Summary:
For brand owners, JD Daojia has traffic, tools, and gameplay. Under the major trend of combining instant demand and quality demand, brand owners should not simply engage in trade cooperation but rather deep cooperation, deep participation, and deep co-creation.
It's not just about finding increments on the platform, but also about directly connecting with consumers through the digital platform, gaining deep insights into consumer demand, and providing data-driven decision support for their own business and operations.
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