On-demand deliveries have gained huge strides in China following the outbreak of COVID-19, which saw movement restrictions and lockdowns across China.
Dada Group is one of the leading on-demand delivery and retail firms in China backed by JD.com and Walmart. The company operates two on-demand delivery platforms – JD Daojia (JDDJ) and Dada Now.
The company grew on the back of the need for grocery deliveries, propelling the company to becoming the largest local on-demand retail platform in the supermarket segment by gross merchandise value (GMV) by the first nine months of 2020.
While China has made marked progress in contained COVID-19, the company believes consumers will not be shaking the habit of getting products delivered within the hour anytime soon.
“Due to COVID-19, consumers are getting used to placing orders online for fresh fruit and vegetables, daily necessities, mobile phones and cosmetics, and enjoy one-hour delivery,” said Huijian He, vice president of Dada Group.
The Nasdaq-listed firm is currently working to expand its reach beyond groceries and into other categories, including beauty and personal care, which the company believes holds a lot of potential for growth.
During the recent 6.18 Shopping Festival, China’s major mid-year online shopping event, sales of beauty products on JDDJ increased by more than double when compared to the same period last year.
He told CosmeticsDesign-Asia that skin cleansing products alone increased by fourfold year on year.
He added that according to a survey by Chinese firm Quest Mobile, over 90% of Chinese consumers said they were willing to pay extra for high-quality home delivery services.
“As the development of on-demand retail speeds up, beauty retailers and brand owners step up efforts to embrace digitalisation and omnichannel operations, to meet the increasing on-demand consumption from consumers.”
Snapping up new beauty partners
The company has been growing its portfolio of beauty brands and retail partners at a rapid pace.
In December last year, the company began a partnership with JD.com and Amorepacific’s Innisfree.
“Through this agreement, Innisfree joined JDDJ platform, transforming its logistical and order fulfilment capabilities and providing its customers access to Dada Now’s one-hour delivery service. Through three-party cooperation, Innisfree could achieve more significant sales growth, and create a new on-demand retail model for beauty brands among the three parties.”
The company continued to partner up with more beauty brands and retailers in 2021. In June, Dada established partnerships with two major Chinese cosmetics retailers, THE COLORIST and WOW COLOUR.
“As of now, 178 offline stores of THE COLORIST have been integrated into the JDDJ platform, covering hundreds of cities and counties in China. Meanwhile, the first batch of WOW COLOUR’s 60 stores also launched on the platform in June.”
Most recently in August, the company announced that it has entered a partnership with beauty retail giant Sephora.
“The strategic cooperation with Sephora is the key milestone of JDDJ to build the leading on-demand retail platform for all categories,” said He.
The LVMH-owned retailer launched over 70 stores on the JDDJ platform, covering China’s first and second-tier cities.
According to Dada, all Sephora stores in China will be integrated both on JDDJ and JD.com by the end of this year.
In addition to the aforementioned beauty retailers, the platform has also established partnerships with Watsons, Gialen, and Afiona.