E-commerce giant JD.com (NASDAQ: JD) and its on-demand delivery affiliate Dada Nexus (NASDAQ: DADA) on Monday released a joint announcement, indicating that JD has agreed to buy USD 800 million worth of ordinary shares from Dada, increasing its holding to 51% after the transaction.
JD was already the biggest shareholder of Dada before the deal, with a 47.9% stake.
“Our increased investment will facilitate both sides to promote the expansion of on-demand retail and delivery, as well as omnichannel collaboration,” said Lei Xu, CEO of JD Retail. “This will help us to further diversify our retail services, to enable our partners, especially real economy enterprises, to continue to optimize cost, efficiency, and experience and accelerate their intelligent digital transformation.”
Aside from Dada, the Alibaba rival also counts subsidiary JD Logistics as part of its network. Dada was merged with JD’s grocery delivery unit JD Daojia in 2016 and went public in June 2020. It now operates as JD’s online grocery shopping and delivery platform.
The deal comes at a time when China’s grocery e-commerce sector has turned red hot. Key players are reportedly preparing for IPOs while the internet giants such as Pinduoduo, Meituan, and Didi are actively building their own neighborhood group-buying platforms.
In 2020, Dada recorded a net loss of USD 260 million, 1.7% higher than in 2019. The net revenue increased 85.2% to USD 890 million, according to its earnings report.
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This article is part of KrASIA’s “Key Stat” series, where KrASIA picks and presents the most significant figures of the day’s technology and business world.