Earnings call transcript Q4 2022

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Operator

Good morning, ladies and gentlemen, and thank you for standing by for Dada's Fourth Quarter 2022 Earnings Conference Call. [Operator Instructions].

I will now turn the meeting over to your host for today's call, Ms. Caroline Dong, Head of Investor Relations for Dada. Please proceed, Caroline.

Caroline Dong

operator. you, Thank thank earnings and joining fourth our Hello, call. you XXXX conference quarter everyone, for

On from discuss be Mr. and will guidance. answer in CFO; call will President Yang, financials Chinese Please the today and provided. talk and Q&A Huijian carefully Mr. Co-Founder company highlights. and the Mr. He, the about Jeff our Beck Mr. Chen, CTO. and Jeff Then operations note Jun Dada, Mr. consecutive session, will He we translation the Chen will and that during have questions

case original the translated In of and any should remarks the discrepancy in remarks statements between version prevail. the original

harbor begin, forward-looking earnings press statement conference like I'd website, you remind release call on we our statements. that applies to contains refer call. IR to this this safe in Before Please which the to latest our

certain measures we refer our contains this non-GAAP call, to Also, comparable earnings will a press our also during financial which to measures. GAAP release discuss measures. Please of the consolidation non-GAAP

Finally, stated, call please to please mentioned ahead. our is It President, figures otherwise my introduce now go all unless in RMB. conference Mr. are this He, during that note pleasure

Jeff Huijian He

Caroline, us. for you thank you, all Thank Okay. and joining

Group once with the quarter XXXX, achieved of During improving a strong first growth our again Dada significantly efficiency. operational

net revenues adjusted net points margin XX total increased Our and percentage by improved by year-over-year. XX

cash the half second in positive flow In addition, achieved free a we of XXXX.

depend JD.com, the on first discuss X operational with in Beck which our our will will update results through cooperation platforms. on financial take the from I detail. highlights provide an I after you then

JD.com with closely multiple work fronts. to continue We on

go GME ecosystem, particular, on a unified more XX% increased free home of of the detailed users exposure increased with tab significantly display by XXX quarter, down services the when and In the Now Shop driven page. upgrade the the all the the JD improved or entry demanded its increased than function year-over-year. to brand by Thanks than more that tab by the point within of year-over-year. GM for keeps During shelf first

XX roll and nearby the the touch features of to points the top in we continue tab, APP. our On JD exposure more than within more out

we has JD incremental Shop During to implemented feature traffic fees which Now. homepage quarter, newly among the on led commendation for the this RBS

the the quarter, for retail the X where of committed JDDJ, to technology JDDJ transformation. development industry, and Turning now to and innovation the our the on-demand and on-demand In Starting Even industry. the fourth urinate GM empowerment with robust highlights in the operational platforms. maintained brand local China. in platform the digital leading growth retailer leading the then

Let's start year-over-year. with more our And retailers. in efforts the retailer essential stores partners on up time XX% online In the them JDDJ provides to support more turn XXXX, JDDJ respect were active XX,XXX grow This the from JDDJ, in part sales. of empowering there ecosystem. than than

established XXX the In quarter, retailers top listen cooperation including different the mom-and-baby taps the and XX appliance partnership they we the first JDDJ as supermarkets, in supermarket supermarket with and and with now electronics such across continued home consumer expand China. have exactly, trends chains more of if and supermarket to top out with multiple

by than supermarket of onboarded to boost emit it From strategy year-over-year. our box festival December sales SKU shopping further chains. holiday launched GME to increased of offerings. the also Year to regional as January, We gift New more supermarkets end the local campaigns spot Thanks XX Chinese more of our such to a of the groups end the and like for JDDJ

X-week During to leading the New Year Chinese event. period

and store increased convenient cooperation other store we In engage leading with addition also stores. to to large the through convening and signed supermarket trends, continued have Recently, relate chains. we up density can

share consumers' the GME of fresh entry We first but supermarket further category. for fresh remarkably In quarter, increased also product that flash JDDJ. the dedicated stores in fresh launched recently our orders of on products to products product Moving improve see point the closed. to significantly

and food example, of several increased by For vegetable like operators tons markets, CME year-on-year. online for and

progress factory. the In appliance shopping the We festive. further first consumer maintained electronics double also factory growth and in smartphone by made home quarter, driven the the

CME also While than the Home partners price As the by more as quarter made the home such appliances in XXX we sub further Xiaomi first depend further cooperation increased with home Appliance, year-on-year. or

XX baby to work private In stores their mom and jointly category, fourth baby XXX of stores mom more the users. of year-on-year growth the top and the saw retailers with in than engage closely and continue assess domain we with to GME quarter.

depend In as the region with key distributors the with such optimize as products. distributors the multi chance further to such new partnerships our with as of leading and such We supply category. corporation SKUs

GMV year-on-year. As the a first result, in more than quarter tripled

than than XX Turning more increase year-over-year. XXXX, marketing to JDDJ to JDDJ's online efforts brands brands. XXX and an In empower partnered more in of with

ability demand auto most brands. us market in position leading on for in -- the digital platform in Our make trusted and

In year-on-year dependent the further exceeded quarter, brand driven and the first by XX, of partnerships. services our marketing online broaden growth

brands. we We have and market to campaigns with Together brand our -- our And convert innovating partners brand continue with attract such -- work we keep brand signed new consumers. brand to partners, and closely we listened, as with FMCG new

dropdown in and the festival first we and colaunched shopping participated the on marketing XXXX intend who's plants, in including them, we XX XX retail, boost Double JD's and to team our the JD.com, event. page, During intercity JDDJ intercity

participating campaign by brands the total XXX increased of GME over-year. day on And the

for and both Next, I brands. digital technology will innovation on retailers touch our the the in driving the transformation

system Haibo deployed At X,XXX stores. chain of end system on retailer Haibo the retailers. has our in our December, been Firstly, than for more outdoor operating omnichannel

XXXX. the in expansion year-on-year supermarkets the spending set pet to and driven baby more successfully by the While and also we Haibo Haibo to system GME and on continuous continue penetrate recently mom in we have stores, doubled in services by the than a the

continued quarter, Haibo's the operating we first the have efficiency. to improve to features outdoor upgrade In chance

enhance intelligent deal by in new X% enable this enhancement function order newly cost the reduce of to have delivery savings we upgraded in a function and tested This to taking time services XX% model. dispatching the in order in efficiency, to their example, the improvement a operating pickup and X% provides engage saw order multiple costs. introduced delivery For an

Moving on our digitized for to use services Dada Picking. store picking the

the Dada and provide to We year-on-year and supermarkets, quarter. Flash leading steady continue to more doubled a of Sam orders total support than fulfilled Picking including in number Walmart, fourth the by

digital Meanwhile, and management, management. a data include aggregation which chance pros improving recruitment, we tools, management aim digital We set picking quality have analysis staff Picking capabilities. the and onboarding sales functions, provide further a comprehensive our been of spending picking and to with monitoring. the

brand made to channel and digital in progress also inventories system grid insights We our brand. to digitize providing solutions management. enables

project optimize While value. cloud helps store customer brands

December of of translated OXO the on online Our level help optimize Based more presence to brands more and than with solution pilot the adopting partner perfect brands than leading percentage solution processing later points. store in SKUs into rolling solutions sales partnered point key online out program data to brands ability which incremental management great X the several increase JDDJ the and amplify sales roll the percentage We third in XX in store for a a perfect tool, a supply, food launched quarter.

to In point off-line on-demand our pain value. Longing the brands operations. JDDJ of WeChat platform cloud store brand to and project user the in conversion and projects. Pilot maximize addition, launched brands enables efficiency cloud the customer branded promoters project improve adjust store of the

retention X-day was promoter customer the increased So rate increased XXX by by average fecilitated and number of each by XXX. orders

XXXX, Moving flexible order new local the cloud Dada on sourcing Now. our In X Now active XX million, on-demand increasing to thanks leading network. China. up year-over-year, on riders to Dada platform in platform more reached and than The delivery

rapid a continued employment workers. opportunities intends business improve growth order revenue first range wide both the provided and quarter. quarter, flexible maintained have Dada We while meaningful efficiency taking first our a volume for to the in loss In of the

more we In and capital, delivery the to XX year-over-year. measures The more revenue leading to to our than by continue demand supermarket increasing through such by to XX% as we services with continue do or than on revenue Meanwhile, dispatching improve optimizing, position increased experience customer efficiency year-over-year. consolidate our

with we closely the partners and quarter, Sam's San Walmart, as Flash. while Club, such During worked

XXX to quarter. up beverage new set beverage year-on-year and In revenue supermarkets the other the such our cooperation year-on-year. with the with by CR brands XX With last capital, X continued more we and coffee We such cooperation than partnerships as during also also with as increased than our We and as increased by more strengthened such

being imparted platform. In addition, nationwide Leverage services and for of on partners the Beijing, the first and Dada, coverage. officially to food Shanghai of level Currently, local offering now we the in in early sacs, fulfillment means on-demand lean became is the in service delivery delivery the life deliver X Chengdu. further in December, sense

to well, when pandemic. CXC individual believe searching of deliver dispatching business business, SME flexibility efficiency. fulfillment service the is in while our expand high CXC our serve SMAs serve to our our up. consumers we full sale services light and In and business scares to network continued more We and needs during care will

first than As increased year-on-year the accelerated and Magnetism. pricing saw and by quarter. in SME Meanwhile, an by a improvement result, business more U. driven incentive in orders fulfilled of XX We optimization the our CXC by

shopping Logistics this steady quarter continue fleet, enhanced outsourcing complementing provide our during knowledge a period the services, liver we case COVID and festival when spike. the flexible For especially to to JD network to by

Lastly, has our of with deliver orders delivery an autonomous open Dada services. This update platform through China. XX,XXX made for supermarkets At more the January, in on-demand had supermarkets on vehicle the largest for manufacturers. cooperation autonomous Dada autonomous end platform autonomous than deliver fulfilled

November, and notably ESG by continuously BBB. MSCI our to on B have improving With improved. In rating to ESG. from practice leading our third-party agencies disclosures, upgraded rating ESG been Moving

all us score improved corporate to governance. CSA of we On top XX% November, the our retailing in X our global assessment environment, the across ESG among Also XX placing social higher strength the sector. scores in dimensions, and in

into enhance to is in operations our To ESG excel wrap practice. the improvement, for the platforms. past ESG This challenges updates macro the rare our demand covers we to significant still integrate further we and daily operating X for late will our continue up, That a year. room

dependent single as cooperation record Looking list and from ahead, products our enabling local retail on in We demand synergies our as that strategy progress every brands JD.com. well with as believe on of petition retailers program

capture Thank positioning us pass the opportunities you. will to call the go our now years. coming back in to are where I We financials.

Beck Chen

Thanks, Jeff.

We all basis, otherwise go just figures noted. give the Therefore, I'm are percentage most advance. are changes items judge to will over going to few year-over-year comparisons housekeeping a year-over-year be way performance. unless numbers, and a renminbi our on all we Before in the in believe useful

revenues Net from start increased with by driven CNY by net will mainly numbers to Total delivery increases XX% X.X volume QX to I increased quarter million, the merchants. first. intercity to fourth by the in XX% service billion. XXX order in of CNY chain revenues

JDDJ X.X services revenue of contributed increased GME, by in driven average in CNY Increase to the Net online the growth due and consumers increase revenues marketing mainly billion, the by to of from JDDJ. in value. number which revenue order increases X% was also to active

to retailers $X.X over Dada the costs billion, on moving increase as to primarily increase operations and was the of expense result in were supporting the merchants Next, provided side. platform chain order the intercity platform. an delivery a Now The volume and for JDDJ services rider to increasing on cost various due

an February of transaction due expenses incentives marketing amount the platform the and absolute attract XXXX. was subscription JDDJ consumers in increase to arising billion, advertising unit increase primarily growing from and X.X expenses marketing new to corporation CNY JD.com to and agreement with to in share of amortization Selling dollar consumers back were JDDJ the

shareholders efficiencies. $XX of data quarter-over-quarter. net ordinary at X.X%, and operating Non-GAAP XXX XX costs million, net G&A decreased year-over-year and percentage R&D enhance million flat million the control $XXX we points mainly CNY non-GAAP attributable was loss due lower loss was expenses attributable expense as R&D our more remained margin to to measures. to mainly than improving expenses by personnel to points percentage

and loss free as cash in the the by we a XXXX. narrowed positive second In driven flow beginning, management addition, working report the are capital efficient in pleased half to of Jeff mentioned significantly

XXXX. restricted cash As December equivalents, XX, investments announced in cash short-term March XXXX, company of had USD pursuant to repurchase billion program our the $X.X million and share XX in cash,

year of we As under million program. rate had approximately results will few -- XX ADS of XX, full through can details repurchase quickly I this repurchased USD now XXXX, run financial December a basis, XXXX was further lining to but found The forma growth recognition pro of $X.X revenues net our be earnings in revenue XX%. total release. net was last-mile the billion, comparable revenue a delivery method services

were XXXX. million to CNY R&D loss $X.X CNY ordinary Selling and X.X were costs marketing XXX billion compared million and with CNY expenses net billion million billion XXXX. shareholders were in in attributable expenses Non-GAAP billion compared with CNY in in G&A $XXX was $XXX Operations with X.X with X.X XXXX. billion expenses supporting were CNY at data XXXX. XXXX. compared compared of $XXX million compared in $X.X with X.X billion

outlook to billion net expect Heading to revenues improving sustaining confident to of the while further XXXX, are rate momentum. between year-over-year growth profitability we total terms growth for XX% In representing $X.XX quarter first in $X.XX we XX%. be billion, a of into XXXX, of revenue

we Thank prepared are Q&A you. remarks. our concludes ready session. this Operator, So the now begin to

Operator

Instructions]. [Operator

comes Your with from Sachs. first Ronald Keung question Goldman

Ronald Keung

hear you Can me?

Jeff Huijian He

Yes, Ronald.

Ronald Keung

have questions. I two

for year outlook hear some How side for we should on business year? pretty turnaround for about side? think given of And about guided. strategies this the economic you've we to that the to are on want the -- track First, the just unit profit profit for JDDJ growth healthy the this

business question do my be about we And capacity? and we your the rider second have operation on if Don opportunities. How this and grows, there thinking announcements core food cooperation are on the delivery the with just sufficient would

Jeff Huijian He

in gradually reached consumer revenue terms year, this to that and half In of situation. that second And extreme XX% expect economic we quarter-by-quarter about outlook cautiously the of confidence expect are gradually And first year. we borrowing the of the this business in half for recover year. activities we this in case, to and accelerate optimistic

impact like now color I'd JDDJ since on to So the share the on some reopening.

options offline . restrictions spending to since due services recovered. preferred to and goods dropping mobility available have on-demand the consumers for pandemic, the During choices, limited somewhat with consumers, and shopping reopening more

the rounds cave situation formed X have in healthy our have abates. maintained the shopping Since outbreak users reopening the the users even who Based experience of last last during not of of on changed. has several retention resurgence year, retention the rate a late years, habits as our significantly

is that all faster have to behind consumers are convenience product used on-demand reason delivery of demanding and The of become shop shopping increasingly the categories.

our now on shocking available. other remained as platform they channels become even Therefore,

confident significantly by feel long-term we So that a industry. the maintaining rate outpaces growth

fact local first services So to food second delivery address that December, were quality. our officially partners our be on merchants on-demand in we first partner fulfillment of demand delivery your among will cooperation the of ins of offering with early on the in, to platform. speaks The question X recognition for win we the on its of the service became life brand services and

we Dada's Specifically, the riders dispatch the the delivering orders of experience aggregate partners. and as platform Once a for premium all convenient X them its on of to fulfill food key accounts, receive the to delivery distribute on-demand them orders, will consumers.

contribution, of for significant incremental will terms delivery years. food experience revenue In if meaningful be service data the in growth, coming the now there

business Chengdu with we and Beijing, only our nationwide of service fulfillment and revenue contribution flexibility coverage, our Shanghai strength food significant service provide not limited high when believe KA baked Leveraging financial in back from on in our incremental cooperation Currently, That in gain order efficiency with delivery full said, dispatching up. is we piloted guidance. delivery scales our will being any volume. have

other KA terms orders par In on we as economics, expect volume to orders. quickly be with of other growth, unit

from delivery delivery our long-term confident apart us competitive We're given share partnering platform, the intracity is and market food with Changsu. on share market significant advantages. our the our of platform, terms In in on food about

including pharmacies. a cost advantage. brighter stable, Compared restaurants enjoy we more of with serve broad range supply Since customers, intracity, and supermarkets, we and

delivery. more whereas asset of throughout orders spread evenly majority for the the are orders Our day, are

perspective, result distribution. cloud model also cost And our are sourcing as efficiency flexible higher more thanks more order a to competitive, and from fulfillment we a of even

country. unit And support and food roads across as our city out cost. fully delivery We is the needs is compared much lower X presence broader X,XXX mostly counties services offer delivery cities, in we the while cities regions. can more in with coverage Tier Chanzhong's available in service and the over

pick deliver In not The of X to service a food is and to time model needs the the point order high cater typically does only addition, most to delivery. due riders merchants. delivery cost, up point delivery at the

Beck Chen

Yes.

So about share me the so let about Ron, UE question, just profit like so and first the the turnaround.

maintain we outlook are company of to in So also the still middle for for to confident our yes, even break in the level year and the corporation.

Chinese on we we XX% to after the going in can still back now basis. supply see XX% March, year-over-year increased like So is year-over-year Year rider into daily sufficient our the as on March, by a think active New riders right

businesses. delivery intracity the For

we for year. think is packaging this the So don't right supply us

Operator

Your with Chong Jefferies. Thomas from comes next question

Thomas Chong

with My year? the should the first about cooperation question with KPI this we XXXX, how given is looking for think JD regarding success the in

question and comment how second my AOV for trend should GMV about about going mix other the Can on And And is forward? you the supermarkets JDDJ. for we the categories? think

Jeff Huijian He

net Thank this question. GMV Core year revenue remains growth you income. and KPI for for your

So our twofold. priorities are

customers the we exposure is acquire first JD's our app to ecosystem. aim The helping in JD channel. And boost penetrate more JD new users meanwhile, to on off-line in

Beck Chen

Okay.

for some second about question numbers. Thomas, So the

for mix. So the category

X% while XX% account total for our of categories the QX, GMV, and remaining GMV. the while XX% account for electronics the in So of of total, our account appliances the for consumer like market total the categories

in average market in be order GMV So still the And the electronic terms value. our QX. consumer in be major and appliances categories of will

RMB order for increased has the the value supermarket, RMB value XXX. XXX, So is average to wise, to also average increased further order the the platform while

by up go is, very of the mix for large the now X size will robustly, the products. the we're which forecasting trend those XXXX, from in course, that ticket of X When driven contribution still reasons. was the like platform So number AOV

order is the up a on of average basis. course, year-over-year second of The supermarket value also is, categories going

in just and So New for event the campaign let's February. Chinese for Year the example, -- and January

supermarket value growing So order also the compared average same basically, we're events to for our very last year. much

So that's for the second question.

Operator

Alicia question next Citigroup. with comes Your from Yap

Alicia Yap

to And the with their business share or landscape our Difficulty] bit the food then any the a JDDJ on of consumer on JDDJ compared of HX. little partnership service local terms versus there going [Technical demands business category conflicts competitive or on our grocery on in would be category? potential

consumption seeing such And items post the ticket then Year. are consumption trends share and the latest you bigger terms appliances New on us as question is willingness with the second category of that the and can is the management electronics supermarket what also the in Chinese

Jeff Huijian He

Thank your The enormous penetrates answer entire the you healthy to industry first market opportunity player for convinced are seeing your To rate retail given the than we now. of further enough large as question. all sector question, accommodate more and X we penetration OGIO is low development. remain the enjoy

parties regarding to leverage thus will differentiated Specifically, and cater shopping, advantages distinctive they Masonite consumer to third needs. the and diversified have strengths

both you share and our Now I on demand supply will thoughts side. with my advantages the on

our as more work enabled and On which our making positioning lies us our pure pricing edge with to platform the has front, extensively and a variety, in and competitive us brands, play supplies. product main more and capabilities, digitalization chain quality supply merchants leading

Jeff Huijian He

details. explain me adjectives let in our Now more

more retailers retailing never a us. in ourselves. pure cooperate with As marketplace, willing That's why to are we engage our

in local leading we've China, and the instance, top teamed up progress out supermarket making in cooperating with XXX are champions. For we with chains XX of

with contrast, sales business retailers. our competes in directly Now which has direct

about work Only launched. number and platform. have In stores the case platform. a have to right actually retailers reservations agreed of the leading their other retailers launching that with concerns So

confident advantage long cannot shift. the -- into marketplace we run. last fundamental in maintaining other this are. we a as the goes why That's and a through strategic pure Our are company It transform

crucial investments technology digitally Moving Dada a retailers. retailers, maintaining of and and as partners. our empowering well-recognized in digital our on us products know-how as such our Picking. solid capabilities After to serving in leading and helping class These several solutions merchant Haibo we've and relation with products accumulated and were years in

to auto platform only digitally to delivery retailers, efficiency. and platform needs Not to network empower a them improve not also operating provides but

with of business. in are around now So And in food centered efforts main you potential terms the conflict, predict, delivery right the as

So much there's on-demand not retail been our conflict with strategic business.

answer changes The economic on To retail we platform, confidence and the on entire in consumer the on-demand exception. your in second affects are -- another retail and cycle an industry macro. question

the On the retail is in early hand, penetration with rate the single-digit other on-demand only retail sector. stage in local still

So we industry. of long-term the confident potential remain in the

year, So growth in expect recovery. some terms but of last this pace we of the faster economic still is and outlook, in uncertainty consumption year there versus

half had So expectations half. in first second we the higher the than for .

and pandemic of January, end regions in since measures control infections lifted chain there multiple -- the were towards and XXXX, December supply Since were consumer the the confidence. affecting massive the in the

Now and gradually has business the improving. mobility have environment shocks the and from normalized, lives Depot's corporate overall upgrades is subsided daily

we So year. consumption expecting better economic growth this and are

That the some the first half, said, and in not to pro especially we consumer seeing and in manifest time recovery, consumption may the uncertainties confidence bear immediately. fruit are reopenings of boost pace income itself your take that to policies the given

modest are expecting in the we a in half confidence and in seeing first reacceleration -- consumption consumer second the recovers. gradually we're So as half growth

the other in players. the growth In e-commerce achieving and outpaces sector rapid to long run, the confidence rise that retail, the of significantly ad thanks penetration in

Operator

Chang next with JPMorgan. comes Your from Andre question

Andre Chang

my translate will question myself. I

So from JD. my questions traffic are related allocation to the

source give et entry the management now, us in points as from traffic nearby, an can cetera? So multiple JD, such by about update

future. if opportunity Group can And into about the auto in that And the from give more lower-tier and the our on our competitive penetration question how change second the to Group we Will the or cities. channel. from more prices affect no driver the view chance traffic the actually products JD strategy will are be provide lower-priced which for their area in recent that debate JD provides the growth support is of

Jeff Huijian He

Thank you for question. your

entry main of have day multiple GMV across mix X In on we the terms entry points. points

platform. on accounts on The of first to is search for total our channel XX% or ad JD that recommendation the the GMV fleet XX% homepage on

is second -- a page. is GME the grew year-over-year. In faster than XXX% QX, the nearby more nearby the point the contributed page The point. faster-growing main entry nearby from entry by GM And the the is

Jeff Huijian He

first So for GMV in supply the and is the expansion prominent driver the growth most terms -- continued of front. the growth, the expansion drivers on

in our and We grid. expanding selection SKU regional categories are more continuously more

our So capabilities. the in iteration our second upgrade product is driver continuous and will

we the think increasing exposure are our For -- rate customers repeat among I search now Shop example, in of results.

And who retention driver shopping of the search is demand of the users third have the our through convenience experienced results.

retain to our will We their consumer stickiness increase with shopping have nearby and channel them informed the habit. packing

answer low-priced And your about strategic day to question offerings. second for change more

reason chain. We impact relatively the the in supply about main optimistic that in on categories, some our offline are channels The terms platform. is of for is the efficient

we gain categories. growth these So faster will in

achieved have we categories, long-term to penetrate XX% target rate. penetration some And of remains users. JD our In double-digit

Operator

we question-and-answer now Dong to Caroline hand for the session today. for remarks. have That's closing I'll all time back

Caroline Dong

Thank behalf you, call. for you of closing, your In team, in on operator. Dada's participation we'd to management today's thank like

today. concludes to information, further out feel to Thank call. us you This joining require please us free directly. you the any for reach If

Operator

does That conclude our Thank you for today. for participating. conference

You disconnect. may now

Dada Nexus Limited (DADA) 8 Mar 232022 Q4 Earnings call transcript