Dada's internal audit found suspicious behavior, JD Group's relevant subsidiaries responded

Update: A reporter from the 21st Century Business Herald learned from an insider at Dada Group that this incident was discovered by Dada on its own initiative during the audit, or was caused by an individual being suspected of fraud. The insider said: "We have reported the case to the public security organs. In addition, the matter does not involve Dada's core business and the scope of impact is very limited."

News from this site on January 8, JD.com Group announced on the Hong Kong Stock Exchange that the company’s consolidated subsidiary Dada Nexus Limited (Dada) announced that it discovered some questionable behaviors during its regular internal audit process , These actions may raise questions about certain online marketing service revenues and operating support costs of Dada in the first three quarters of 2023. The Audit Committee under Dada’s board of directors decided to conduct an independent review, which will be assisted by independent professional consultants.

According to information disclosed by Dada Group, the company currently estimates that online advertising and marketing services will be approximately 500 million in the first three quarters of 2023 Revenue and operating support costs in RMB were approximately RMB500 million each, which may have been overreported.

According to previous reports on this site, JD Group and Dada Group announced in February 2022 that JD Group completed a transaction to subscribe for common shares issued by Dada Group. After the transaction is completed, including its current shares, JD Group will hold approximately 52% of Dada Group’s shares. Dada will further strategically undertake JD.com’s instant retail and instant delivery business, and obtain the support of JD.com’s strategic resources.

According to Dada Group’s unaudited third quarter performance data for fiscal year 2023, as of September 30, 2023, the company’s total revenue in the third quarter was 2.9 billion yuan, a year-on-year increase 20%. At the same time, the adjusted net profit margin increased by 11 percentage points year-on-year.

Among them, the revenue of JD Daojia platform in the third quarter was 1.8 billion yuan, a year-on-year increase of 16%. In the 12 months as of September 30, 2023, the total transaction volume (GMV) of JD Daojia platform was 73.1 billion yuan. A year-on-year increase of 24%. The number of JD Daojia stores in operation exceeds 400,000.

Dada Express platform’s revenue in the third quarter was 1.1 billion yuan, a year-on-year increase of 29%, and Dada Express’ active riders increased by more than 20% year-on-year in the third quarter.

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