With the announcement of the performance of dada group, the parent company of Jingdong, in 2020, the rapid take-off track of the real-time retail industry under the epidemic situation has also been shown.
Dada recently released financial results show that last year, the group achieved a total revenue of 5.7 billion yuan, an increase of 85%. It is worth noting that, as one of the core businesses, Jingdong home achieved a total platform transaction volume (Gmv) of 25.3 billion yuan last year, a year-on-year increase of 107%.
However, at present, the epidemic prevention and control has entered normalization. Can last year’s “tuyere” be continued this year? What are the new opportunities for home business and o2o? Now let’s take a look.
Market share continues to expand
After last year’s epidemic, o2o and “home” businesses have become outlets, while dada, which is also involved in home retail and real-time distribution business, has entered a period of rapid growth.
According to the statistics of iResearch, in 2020, Jingdong Jiajia will continue to be the largest local retailer super o2o platform in China, and its market share will increase from 21% in 2019 to 25%. In addition, dada express, another main business sector of dada, will continue to rank first in China’s socialized intra city distribution market share in 2020, with the market share increasing from 19% in 2019 to 25%.
It is understood that at present, Jingdong Jiajia has reached cooperation with 71 super top 100 chain stores. In the fourth quarter of last year, it signed contracts with more than 20 super top 100 and regional leading supermarkets such as Hubei Huangshang supermarket, Anhui Andeli supermarket, Zhejiang Wankelong supermarket and Shandong Guihe supermarket.
At the same time, dada Express has strengthened cooperation with Sam’s club. As of December 2020, dada express wholehearted service has covered nearly 100 cloud warehouses of Sam, and 100% of them have undertaken the order delivery of Sam’s official app, app and jd.com. The average daily delivery order volume of single warehouse has increased by more than 10 times compared with that at the beginning of cooperation in 2017.
Optimistic about the prospects of low tier cities
Compared with last year’s extremely hot market, people from all walks of life now pay more attention to whether the home business can maintain the heat in the post epidemic period? Can last year’s rapid growth be repeated this year?
In this regard, Kuai Jiaqi, founder, chairman and CEO of dada group, revealed at the annual performance meeting that due to the promotion of “Celebrating the Chinese new year on the spot” during the Spring Festival this year and the strong purchasing power of consumers, the order volume of dada group still recorded a strong growth.
Kuai Jiaqi, founder, chairman and CEO of dada group
“Even under the high contrast base during the Spring Festival last year, the group is expected to achieve a year-on-year growth of more than 50% in the first quarter of this year.” He said.
Kuai Jiaqi also believes that low tier cities still have great potential. One example is that thanks to the continuous expansion of coverage network, the Gmv of Jingdong home in low tier cities increased by 150% in the fourth quarter of last year.
Data show that by the end of last year, Jingdong had covered nearly 1400 counties, districts and cities across the country, adding 200 counties, districts and cities in a single quarter, and continued to sink. In December 2020, Gmv in Hunan, Hubei, Guangxi, Jiangxi, Sichuan, Shandong and other provinces increased by more than 100% year on year.
Low line cities are also “potential stocks” that are favored by consumer brands to drive growth.
Previously, Zhang Xiqiang, President of Taitaile, talked with the snack generation that consumers in some rural areas can’t buy Taitaile’s products, and thought that there is “two or three times (growth) space” in the sinking channel.
In order to achieve accelerated growth, this year, the company launched a “delicious partner” plan for dealers, hoping to make use of dealers’ partners to do channel sinking.
Brands continue to add o2o
It is understood that last year, many FMCG brands made efforts to strengthen the layout of o2o channels. PepsiCo China, Nestle, Yili, Mengniu, Mars Wrigley and other well-known FMCG companies have successively established strategic cooperative relations with dada group. And Jingdong home has become the fastest growing channel for many brands.
Jingdong Jiajia also plans to open up more entrances and attract more retailers to settle in this year, and gradually introduce more categories of businesses to settle in, including mobile phone digital, mother and baby, personal care beauty and so on.
In February this year, the Kaidu consumer index pointed out in a latest report that there are five major trends in the retail market in 2021, one of which is that o2o intra city retail will enter the era of multi category and high frequency.
Data show that nearly 60% of Chinese urban consumers will purchase FMCG through o2o distribution platform in 2020.
“Compared with the low price and sinking of community group buying, o2o intra city retail meets more consumers’ demand for instantaneity, and the price sensitivity of target users is low, and the scope and frequency of purchasing categories are gradually expanding. “The report said.
In fact, for some brands, the role of o2o is not only selling goods, but also becoming a part of enterprise strategic layout.
Xiaoshidai learned that the o2o business of Taitaile achieved three or four times growth last year. In Zhang Xiqiang’s view, o2o is definitely not only a delivery or sales platform, but also a position for brand promotion and user recruitment.
Tiktok regards O2O as an important platform for media delivery, he said. The latter is also a publicity platform like TV advertising and jitter. This year, it plans to continue to increase O2O.
Zhan kunjie, CEO of beverage giant Coca Cola, also pointed out at the annual performance meeting held in February that the epidemic situation makes digitalization more important, and the company is reshaping its organization and using e-commerce more.
Coca Cola said in its financial report that last year, the company continued to invest in Omni channel opportunities in digital channels, seizing the vigorous development trend of China’s o2o, “by focusing on excellent digital execution and the availability of core SKUs, its market share in terms of value calculation on o2o platform increased by three points last year, and it is in a leading position in China’s overall digital commerce growth.”.