Online Chinese grocery delivery platform Dada Nexus has listed on the Nasdaq exchange amidst calls for greater scrutiny of and curbs upon the stateside IPO’s of companies from China.
Dada listed under the ticker DADA on Friday 5 June, with a valuation of USD$3.5 billion.
The company was first founded in 2014, and its JD-Daojia (达达-京东到家) and Dada Now (达达快送) brands have since emerged as two of the leading on-demand retail platforms in the Chinese market.
JD.com and Walmart made an investment of $250 million in Dada Nexus in 2016, while the company is also cooperating with other companies in areas including marketing, user traffic, supply chain, and an “omni-channel initiative.”
JD.com is currently the biggest shareholder in Dada Nexus with a 51.4% stake, while Walmart holds 10.8% of equity. JD.com also holds a 47.4% stake in joint-venture JD Daojia, and is the company’s single largest shareholder.
The listing comes just after the mooting of various measures by the US to impede the listing of Chinese companies on its bourses, amidst worsening Sino-US relations in the wake of the COVID-19 pandemic.
Nasdaq plans to introduce a minimum threshold requirement of USD$25 million for IPO’s by foreign companies, in a move which observers say will put a roadblock in front of the listing ambitions of smaller Chinese firms.
The Trump administration has also proposed that all Chinese companies seeking to list in the US submit financial reports that comply with local accounting standards in the form of Generally Accepted Accounting Principles (GAAP).
Dada CEO Philip Kuai said that the proposed restrictions would not have an adverse impact on the company, which he also sees as benefiting from the COVID-19 lockdown.
“We particularly welcome better auditing and regulation,” said Kuai on the day of Dada’s IPO.
“Only when your entire environment is as healthy as possible will the interests of everyone — including investors and customers— be protected, and the market develop in a healthy way.”
While China’s GDP posted a 6.8% contraction in the first quarter of 2020 as a result of the Novel Coronavirus lockdown, Dada’s active customers for on-demand retail delivery posted a 7.1 million YoY rise to 11.9 million.
Average order size also increased by over 50% to 149.5 yuan (USD$21).