Online grocery and delivery company Dada-JD Daojia announced on Thursday $500 million worth of fresh funds from its existing backers, US retailer Walmart Inc. and Chinese e-commerce group JD.com Inc.
The logistics firm, which is partly owned by JD, plans to use the funds to invest in supply chain technology and serve merchants on its platform that connects scooter-riding drivers in about 400 cities with around 1.2 million online merchants and transports everything from packages to groceries.
JD Daojia delivers products from local supermarkets and other partners using a location-based smartphone app and currently has about 20 million monthly active users.
Walmart China Chief Executive Wern-Yuen Tan said by working with strong partners, and investing in digital capabilities, they will create easier and more convenient shopping experiences for customers. For the latest round, the Arkansas-based group invested about $320 million.
Walmart teamed up with JD Daojia in 2016, when it invested $50 million in the company. At present, 200 Walmart supermarkets in 30 Chinese cities are among JD Daojia’s major clients. The global retail giant has five online stores on the main JD.com platform as well.
Tan also stated that they are confident this deeper partnership with JD Daojia will boost their omni-channel footprint and deliver a better online-to-offline (O2O) customer experience.
Combining Online and Offline Shopping Experience
As China’s smart retail movement flourishes, Walmart has been stepping up its efforts to integrate its retail network with the movement, seeing other retailers and tech firms such as Alibaba Group Holding Ltd. and Tencent Holdings Ltd. establishing deals to combine customers’ online and offline experience.
Earlier this year, Walmart opened its first small-sized high-tech supermarket in China where customers can use their smartphones to pay for items that are available on the retailer’s virtual store on JD Daojia’s platform.
The stores are competing with Aliababa’s Hema stores in offering quick grocery delivery service to customers.
Alibaba is currently China’s No. 1 e-commerce player, while Tencent is a strong player in the social media and gaming industry and has, along with Walmart, a large stake in JD.com. As a result, the Beijing-based group has access to sell directly to buyers through Tencent’s social messaging platform WeChat.
Alibaba and Tencent have between them spent more than $10 billion on retail transactions, which has helped strengthen their offline presence. That means only a small number of brick-and-mortar retailers are now left without a deal to one or the other.
Outside the new retail experience, JD.com has lately been looking for ways to expand its overseas presence.
In June, search giant Google Inc. announced a $550 million all-cash investment in JD.com, which will see the two companies working together to offer JD.com products for sale on the Google Shopping platform around the world.
The Chinese e-commerce group said it intends to make a selection of products available for sale in locations like the US and Europe via the platform.
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