China's Dada Nexus Surges After JD.Com Pays USD800 Million to Have 51% Stake in Delivery Asset
Lu Hanzhi
DATE:  Mar 23 2021
/ SOURCE:  Yicai
China's Dada Nexus Surges After JD.Com Pays USD800 Million to Have 51% Stake in Delivery Asset China's Dada Nexus Surges After JD.Com Pays USD800 Million to Have 51% Stake in Delivery Asset

(Yicai Global) March 23 -- Shares of Dada Nexus jumped after JD.Com said that the Chinese e-commerce giant will pay USD800 million to have a majority stake in the firm that owns JD Daojia and Dada Express on-demand delivery platforms.

Dada Nexus's stock price [NASDAQ: DADA] closed 4.1 percent higher in New York yesterday.

JD.Com will buy Dada Nexus's newly issued common stock to have a 51 percent stake in total in the company that owns grocery platform JD Daojia and delivery service Dada Express, the Beijing-based buyer said in a statement yesterday.

The deal further deepens cooperation between the two. Dada Nexus will take care of JD.Com’s on-demand retail and delivery business, which will enhance consumer experience to achieve a win-win situation, the statement added.

The buyer may be zooming in on the Shanghai-based target firm's labor pool. Dada Nexus is able to attract more flexible workers, which should lower JD.Com's labor costs, transport expert Yang Daqing told Yicai Global. The e-commerce giant is placing heavy bets on logistics as delivery, now run by JD Logistics, plays a crucial role in its entire system.

Fast delivery can increase all units' competence. One example is JD Health International, JD.Com's online pharmacy which went public last December. JD Health has high profits because the parent can offer delivery via JD Logistics and attract its high-end customers to the platform, Han Mengying, senior analyst at consulting firm Analysys, told Yicai Global.

Editor: Emmi Laine, Xiao Yi

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Keywords:   Dada Nexus,JD.com