Dada Nexus Ltd

NASDAQ:DADA

Earnings Call Analysis

Dada Group Reports Strong Q3 2023 Growth

In Q3 2023, Dada Group reported a 20% increase in total net revenues with adjusted net margins improving by 11 percentage points year-over-year. The company's growth was fueled by record-breaking performance on peak-day GMV and partnerships with over 400,000 retail stores including 93 of the top 100 supermarket chains in China. The GMV for convenience stores on the platform grew more than eightfold year-on-year, and consumer electronics saw significant growth with sales of the new iPhone series up 250% at launch. Other categories, such as home and baby products, and brands like Dell and Xiaotiancai, also enjoyed a 60% GMV increase. Dada Now, their delivery platform, reached 200 million orders in the period, indicating a strong uptake of their on-demand retail model. Dada Now's revenue growth outpaced JDDJ, the on-demand retail platform, strengthening the group's performance further. The GMV growth in the supermarket category was notable, and initiatives such as live streaming saw a tenfold increase in transacted GMV compared to previous promotions. The management expects revenue to grow 12% to 23% year-over-year, projecting up to RMB 3.3 billion for future quarters.

Sustained Growth and Improved Margins

The third quarter of 2023 was marked by significant achievements for Dada Group. The company reported a substantial 20% increase in net revenues and a noteworthy 11% improvement in adjusted net margin compared to the previous year.

Ambitious Five-Year Plan with JD.com

Dada Group, in partnership with JD.com, showcased its long-term vision by launching a five-year action plan aimed at transforming the on-demand retail industry. This initiative is set to facilitate over RMB 1 trillion in retail consumption, drive digital transformation for more than 2 million physical stores, and create upwards of 10 million flexible job opportunities, demonstrating the company's confidence in the industry and its commitment to social responsibilities.

Record-Breaking Double 11 Festival Performance

The popular Double 11 shopping festival served as a stage for Dada Group's impressive performance. JDDJ, the company's on-demand retail platform, achieved an all-time high in peak-day gross merchandise volume (GMV), with strong growth across various categories like liquor and home furnishings. Dada Now, their on-demand delivery service, also saw a record number of orders completed, reaching 15 million on the peak day and a total of 200 million throughout the promotion.

Expanding Partnerships and Engagements

With partnerships established with 93 of China’s top 100 supermarket chains, JDDJ has significantly expanded its reach. Notably, after implementing a delivery fee waiver, the company saw an improvement in customer engagement metrics such as retention rates and purchase frequency in the supermarket category. Additionally, GMV from convenience store partnerships saw an eightfold year-on-year increase.

Growth Across Diverse Product Categories

Dada Group experienced a surge in sales in various product categories. For instance, sales for new Apple products saw a 250% increase over the iPhone 14 launch, computer and accessories GMV went up by 60%, and the company's newly on-boarded 8,000 home appliance stores helped achieve a 70% year-on-year GMV growth for those merchants. The home furnishing category also tripled in GMV, reflecting successful new partnerships and product expansions.

Liquor and Apparel Category Expansion

In the liquor category, Dada Group more than tripled its GMV year-on-year, thanks to improved supply of core items. The apparel section also witnessed a massive growth, with GMV increasing over fivefold due to new partnerships with brands across various segments including outdoor, underwear, and luggage.

The Double 10 Billion Brand Plan

Aiming to boost brand sales on their platform, Dada Group introduced the 'Double 10 Billion Brand Plan', with the goal of assisting more than 10 brands to reach sales of over RMB 1 billion. Coupled with innovative marketing campaigns, such efforts have already led to remarkable sales increases for partner brands.

Innovative Technology for Enhanced Marketing Efficiency

Dada Group released 'Hongtu', an advanced grid-level marketing tool, designed to elevate marketing efficiency for brands. Early adopters have seen promising results, including a 12% increase in conversion rates and a significant decrease in customer acquisition costs by 37%.

Strengthened On-Demand Delivery Capacity

The company strengthened its delivery infrastructure with a more than 20% increase in active riders, substantially enhancing their capability to support on-demand delivery services. Additionally, the growth rate for revenue from on-demand delivery services to chain merchants has accelerated, up by an impressive 25% year-over-year.

Earnings Call Transcript 2023-Q3

[Operator]

Good morning, ladies and gentlemen, and thank you for standing by for Dada's Third Quarter 2023 earnings conference call. [Operator Instructions] As a reminder, today's conference is being recorded.

I will now turn the meeting over to your host for today's call, Ms. Caroline Dong, Head of Investor Relations for Dada. Please proceed, Caroline.

[Caroline Dong, executive]

Thank you, operator. Hello, everyone, and thank you for joining our third quarter 2023 earnings conference call. On the call today from Dada, we have Mr. Jeff Huijian He, President; and Mr. Beck Chen, CFO. Mr. He will talk about our operations and company highlights, then Mr. Chen will discuss the financials and guidance. Please kindly note that during the Q&A session, Jeff will answer questions in Chinese and the consecutive translation will be provided. In case of any discrepancy between the original remarks and the translated version, statements in the original remarks should prevail.

Before we begin, I'd like to remind you that this conference call contains forward-looking statements. Please refer to our latest Safe Harbor statement in the earnings press release on our IR website, which applies to this call. Also, during this call, we will discuss certain non-GAAP financial measures. Please also refer to our earnings press release, which contains a reconciliation of non-GAAP measures to the comparable GAAP measures.

Finally, please note that, unless otherwise stated, all figures mentioned during this conference call are in RMB.

It is now my pleasure to introduce our President, Mr. He. Jeff, please go ahead.

[Huijian He, executive]

Thank you, Caroline, and thank you all for joining us today. During the third quarter of 2023, Dada Group sustained its impressive top-line growth and made further gains in operating efficiency. Our total net revenues increased by 20% and adjusted net margin improved by 11 percentage points year-over-year.

I will begin today's presentation with some updates on our cooperation with JD.com and our performance during the Double 11 shopping festival, followed by operating highlights from our 2 platforms. I will then hand over to Beck, who will take you through our detailed financial results.

First, let's discuss our cooperation with JD.com. In October, Dada Group and JD.com held an on-demand retail industry conference themed "Happiness within Reach" or [Foreign Language], and unveiled a 5-year action plan in boosting consumption, enabling retailers, and creating jobs. Specifically, in the next five years, JDDJ and Dada Now aim to facilitate on-demand retail consumption of over RMB 1 trillion along with our ecosystem partners, drive the digital transformation of more than 2 million brick-and-mortar stores, and cumulatively create over 10 million flexible employment opportunities.

This not only demonstrates our strong confidence in the potential of on-demand retail industry, but also our commitment in shouldering social responsibility. JD.com and us will strengthen cooperation to achieve these goals.

Next, I would like to provide some highlights from the recent Double 11 shopping festival. For JDDJ, peak-day GMV reached an all-time high, and GMV throughout the promotion grew robustly, with multiple categories registering triple-digit growth, including liquor, mom-and-baby products, home furnishings and convenience stores. For Dada Now, orders fulfilled on the peak day hit another record high of 15 million, and total orders fulfilled reached 200 million during the promotion period.

Let's move on to the operational highlights for our 2 platforms. Starting with JDDJ, the leading on-demand retail platform in China. In the third quarter, we continued to strengthen and expand our partnerships with retailers and brands, and further enhanced our capability in technology innovation.

Starting with retailer cooperation. During this quarter, we continued to broaden and deepen our cooperation with retailers to enrich our product offerings. As of the end of September, JDDJ had onboarded more than four hundred thousand retail stores.

In the supermarket category, we added more top supermarket chains to our platform and have now established partnerships with 93 out of the top 100 supermarket chains in China.

After we rolled out our delivery fee waiver campaign to the majority of supermarkets across the country at the end of July, we saw notable increase in user engagement, as evidenced by improvement in both retention rate and repurchase frequency among our users in supermarket category.

We also made progress in our collaboration with major convenience store chains, leading to GMV generated by convenience stores on our platform growing more than 8 times year-on-year.

Moving on to the consumer electronics category, in the smartphone sub-category, JDDJ participated in the launch of new Apple products for the fourth consecutive year. After the iPhone 15 series was officially launched for sale in September, sales in the first two hours increased by 250% compared to the sales during iPhone 14 debut. In addition, Android brands such as Xiaomi, OPPO, and OnePlus also saw rapid growth in the third quarter.

For the computer and accessories sub-category, GMV increased by 60% year-on-year. This growth was attributable to our support for new brands, weekend marketing events, and our efforts to explore diverse shopping scenarios. Notably, brands such as Dell, Xiaotiancai, and XGIMI experienced significant growth during the quarter.

We also continued to make progress in the home appliance and home furnishing category. In the home appliance sub-category, we aim to serve diversified user needs by offering differentiated SKUs as compared with B2C channels, while offering enhanced experience of one-stop delivery and installation. In this quarter, we established new partnerships with major appliance brands such as Hisense and Skyworth and newly onboarded 8,000 home appliance stores onto our platform. As a result, GMV of home appliance merchants grew by 70% year-on-year.

The home furnishing sub-category also saw rapid growth, with GMV increasing by nearly 3x year-on-year. We established new partnerships with brands such as Nippon Painting Service, achieving a breakthrough in our offering of painting services.

In the apparel category, we recently signed new partnerships with a number of outdoor brands including Skechers, PEAK, as well as underwear brands such as Cosmo Lady, Aimer, and Hongdou, and luggage brands such as American Tourister. In the third quarter, GMV of the apparel category increased more than 5x year-on-year.

For the liquor category, GMV more than tripled year-on-year in the third quarter, driven by our continuous efforts in improving the supplies of core SKUs.

Next, let's talk about JDDJ's progress on deepening cooperation with brands. As a pioneer and leader in O2O marketing for brands, in September, we officially launched the "Double 10 Billion Brand Plan," which aims to help more than 10 brands achieve sales of more than RMB 1 billion and establish a benchmark brand with sales of more than RMB 10 billion on our platform in 2024.

Our brand partner pool kept expanding. Recently, we formed partnerships with leading baijiu brands including Moutai and Yanghe, being the first on-demand retail platform they cooperated with. We also established new partnerships with snack food brands such as Yanjin Food and dairy brands such as Lechun and Simplove.

We also continued to enhance our omni-channel O2O marketing collaborations with brands, helping them reach users through multiple channels, both on and off JDDJ. Starting in September, we collaborated with brands such as Quaker, OMO, and Maxam to help them enhance exposure via innovative offline campaigns such as dancing competitions. On the final day of the event in Shanghai, Quaker saw a remarkable 220% year-on-year increase in sales and a 58% increase in order volume.

Next, I'd like to talk about our technology innovation efforts. For retailers, our omni-channel O2O operating system Haibo continued to play an important role in improving efficiency. As of the end of September, Haibo had been deployed in nearly 12,000 stores. We recently upgraded the Haibo system's visualized stocktaking function to support additional business scenarios and make inventory counting more efficient through iterated algorithm logic. Pilot merchants who used this upgraded function saw a 99% drop in stocktaking abnormalities.

For brands, we further upgraded our marketing technology. In September, we released Hongtu, the first grid-level marketing tool for brands in the on-demand retail industry, to improve their marketing efficiency. Through B2C plus O2O omni-channel data analysis, Hongtu helps brands identify marketing opportunities grid by grid in terms of both consumer demand and their supply status, so as to make marketing campaigns more effective.

At present, the Hongtu system has been adopted by 10 brands in categories such as FMCG, consumer electronics, and health and wellness. Pilot brands that used the Hongtu solution to manage marketing activities saw their conversion rate increase by 12% and average new customer acquisition cost decrease by 37%.

I will now turn to Dada Now, China's leading local on-demand delivery platform. In the third quarter, we continued to expand our delivery capacity, with quarterly active riders on the Dada Now platform increasing more than 20% year-on-year.

I will first discuss our KA, or chain merchants, business. In the third quarter, the growth rate of our revenue from on-demand delivery services to KA merchants accelerated to 25% year-on-year.

In particular, revenue from beverage KAs continued to grow rapidly by high double digit rate. In addition, in the restaurant KA category, we recently formed new partnerships with restaurant chains such as Yoshinoya and Tastien while strengthening cooperation with leading brands among our existing partners.

Moving on to our SME and C2C business, thanks to a wider variety of service selections, the number of SME and C2C orders fulfilled in the third quarter increased by 40% year-on-year.

Lastly, an update on Dada Now's autonomous delivery service. We continue to consolidate our positioning as the largest autonomous delivery platform for supermarkets in China. To date, Dada Now's autonomous delivery open platform has fulfilled more than 200,000 on-demand delivery orders for supermarkets.

That concludes our operational updates for our two platforms. To wrap up, we delivered another strong quarter of financial results, with solid growth in revenue and significant year-on-year improvement in our bottom-line. Along with the continuous improvement in business performance, we believe our model also creates unique social value. Therefore, we set forth the 5-year plan surrounding consumption, digitalization and employment, which is in line with our strategy to realize healthy growth in a vibrant community consisting of consumers, retailers, brand owners, and riders. We will continue to execute this strategy to drive sustained returns for shareholders.

I will now pass the call over to Beck to go through our financials. Thank you.

[Zhaoming Chen Beck, executive]

Thanks Jeff. Before we go over the numbers, just a few housekeeping items in advance. We believe year-over-year comparisons are the most useful way to judge our performance, therefore all percentage changes I'm going to give will be on year-over-year basis. And all figures are in RMB, unless otherwise noted.

Total net revenue in the third quarter increased by 20% to RMB 2.9 billion. Net revenues from Dada Now increased by 29% to RMB 1.1 billion, mainly driven by the increases in order volume of intra-city delivery service to chain merchants. Net revenues from JDDJ increased by 16% to RMB 1.8 billion, mainly due to the increase in GMV. The increase in online marketing services revenue as a result of the increasing promotional activities also contributed to the revenue growth of JDDJ.

Moving over to the expenses side. Operations and support costs were RMB 2.0 billion. The increase was primarily related to an increase in rider cost as a result of increasing order volume for intra-city delivery services provided to various chain merchants. Selling and marketing expenses decreased to RMB 1.0 billion, primarily due to a decrease in advertising and marketing expenses, and a decrease in incentives given to JDDJ consumers.

G&A expenses decreased to RMB 29 million, as a result of decreased amortization of business cooperation agreement and non-compete commitment related with the acquisition of JDDJ in 2016, which was substantially amortized as of June 30, 2023, and reduced share-based compensation expenses, as well as efficient expense control measures.

R&D expenses decreased to RMB 94 million, mainly due to lower R&D personnel cost as we enhanced our operational efficiency. Non-GAAP net loss attributable to ordinary shareholders of Dada was RMB 9 million, a significant improvement compared with the loss of RMB 270 million in the third quarter of 2022. Non-GAAP net loss margin was 0.3%, improving by 11 percentage points year over year.

As of September 30, 2023, we had RMB 4.4 billion in cash, cash equivalents, restricted cash and short-term investments, achieving an increase as compared with the balance as of end of 2022.

In terms of the outlook, for the fourth quarter of 2023, we expect total revenue to be between RMB 3.0 billion and RMB 3.3 billion, representing a year-over-year growth rate of 12% to 23%.

This concludes our prepared remarks. Operator, we are now ready to begin the Q&A session, thank you.

[Operator]

[Operator Instructions] Your first question comes from Ronald Keung with Goldman Sachs.

[Ronald Keung, analyst]

So my first question is on how we've seen the recent trends of growth in Singles' Day, and based on your 4Q guidance, the sequential slightly slower year-on-year growth, do we see what are the drivers of our growth? And how should we think about next year along the consumption trends on discretionary or for on-demand products?

And my second question is on our cooperation with JD, with the JD rebalancing kind of traffic, the 10 billion subsidy program and 3B, how has the cooperation been? And do we see any change in the JD traffic allocation to ourselves and any updates on the cooperation? Let me translate myself. [Foreign Language]

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] Thank you for your question, Ronald. I'll first give you a brief update on the overall performance of our Double 11 shopping festival. As we all know, it's quite a long event starting from mid- to late October and running all the way through mid-November. So during the first 3 weeks of October, growth of both supermarket and the consumer electronics categories were on the softer side due to 2 factors, a, an increase in outdoor and traveling demand affected purchasing frequency of our supermarket category to some extent; and, b, demand for some smartphone brands was not as strong as we had expected.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] During the Double 11 shopping festival, however, we've seen a decent recovery in growth rate, especially of the supermarket category, primarily thanks to our efforts in prioritizing value and the customer savings on top of the convenience of 1-hour delivery that we provide.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] on the peak day of November 11, we made historic breakthroughs, especially we've seen decent growth for the supermarket category.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] Overall, the consumption market is recovering going into different categories. However, spending and services, including dining and accommodation, entertainment and tourism continue to outpace the spending in physical goods. In addition, the need for on-demand retail is less prominent in outdoor scenarios for service consumption.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] In light of these trends, we will continue to focus on consolidating our strength on the supply side and optimizing the user experience to position ourselves for the increase in O2O penetration in the long term, about which we are highly optimistic.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] To provide you with an update on our cooperation with JD.com, both JDDJ and Dada Now continued to strengthen our cooperation with JD during the quarter. Starting with JDDJ. First, we continued to penetrate JD's user base with the number of Xiaoshigou users in the third quarter increasing by close to 40% year-over-year.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] Our traffic growth on JD has been outpacing our user growth as we gained access to new entry points on the JD app. For example, the LBS feature is now being gradually integrated into the 10 billion subsidy and flash sale channels, which enables our merchants to generate incremental exposure.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] Apart from the incremental touch point interest gains, we are also making progress in the existing user interfaces. In terms of the search results, for example, recently, JD.com has been testing to prioritize audio products and categories, including fresh produce and heavy and bulky items to enhance user experience while improving efficiency.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] And in terms of the [indiscernible], previously known as Nearby Fujin Hub, we have refined the page design together with JD's product development team to drive significant BAU growth. At the same time, we are pushing forward the continuous increase in conversion rate and AOV.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] Now I'd like to share some observations and thoughts on the impact of JD's changing algorithm on JD eBay platform.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] We believe our Xiaoshigou service not only provides JD users with high-quality products and faster delivery, but also competitive prices that stem from our retail partners' strength in the supply chain. Therefore, Xiaoshigou is able to provide a better user experience in all 3 dimensions of product, prices and services. As a result, we believe JD's new traffic allocation mechanism will benefit Xiaoshigou's growth in the long term.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] Xiaoshigou's advantage in terms of product quality and diversity as well as delivery speediness is self-evident. So I would like to elaborate more on the price competitiveness of our Xiaoshigou service.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] With years of experience in off-line retail, retail merchants who we are cooperating with usually have already built strong supply chain capabilities, which enables them to provide consumers with competitive prices, in particular in product categories such as fresh produce and heavy and bulky items we just mentioned.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] In addition, conducting O2O business on top of other existing off-line stores requires little incremental rental and personnel costs for retailers. Given the lower selling expense ratio, there is a significant room for our retail partners to offer lower prices on the Xiaoshigou channel and provide our consumers with more value for money items.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] Looking at our operational results. Since JD began to emphasize the pricing factor in March, our exposure among JD search results has maintained remarkable growth. For example, in Q3, the daily average search exposure of Xiaoshigou's supermarkets category increased by 50%.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] In addition, the percentage of highly price-competitive products in Xiaoshigou stayed at above 30% during the November 11 shopping festival, a testimony of the overall price competitiveness of our Xiaoshigou products.

[Operator]

Your next question comes from Thomas Chong with Jefferies.

[Thomas Chong, analyst]

My first question is about JDDJ unit economics in Q3. Can management share about the take rate and expense ratio for different items? And on that front, how should we think about the duty economics as we go into 2024? What are the drivers behind?

And my second question is about the O2O opportunities in China? As we mentioned in the prepared remarks, the market size is huge. But on the other hand, we also see the competitive landscape is also quite intense as well. So I just want to get some thoughts from management about how we think about the landscape in 2024? And on that front, what is the long-term direct margin that we are expecting in the coming years? [Foreign Language]

[Zhaoming Chen Beck, executive]

Thank you, Thomas. This is Beck. So I'll address your first question and Jeff can take the second question. So in terms of the monetization of JDDJ in Q3, the monetization rate was increased to 10% in Q3, which is the first time we passed through like the 10% threshold historically. And in the same time, our consumer incentives was further decreased to 3.3%, which is either like decreasing on a Q-on-Q basis or a year-over-year basis. And our operation costs including rider cost, packing costs was 4.7%, which is decreased on year-over-year basis, while increased Q-on-Q, basically because of the seasonality in summer campaign.

And in terms of, for example, like 2024, the major driver still, we will keep to increase the commission in online marketing and manufacturing rate. And at the same time, we will further decrease our consumer incentive expenses and also operation cost side to further enhance our direct margin on a year-over-year basis.

And also in terms of the last question -- your second question, in terms of the long-term margin, so basically, as we have talked about previously, so JDDJ could be narrated to like the traditional e-commerce platform, which is just a localized version. So in terms of like the operating profit against GMV generated through the platform. So we are a marketplace model, neutral platform model, so it should be targeted as 3% as percentage of GMV as our long-term non-GAAP operating profit for JDDJ.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] Yes, I'd like to share some thoughts on your second question about the competitive landscape. The fact that more leading international companies are prioritizing the on-demand retail business speaks of its great potential. And we believe the industry can easily accommodate different players to grow vibrantly in their respective areas of strength.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] For JDDJ, firstly, our strength and extensive partnership with pay merchants remains rock solid. This is a result of our positioning as an open and neutral platform as well as our accumulated know-how and expertise in empowering retailers' various systems and services. Merchant ecosystem was built. It's hard to replicate in a short time by other platforms. For instance, in the supermarket category, we've onboarded 93 out of the top 100 chains in China. In addition, in categories such as smartphones and mom & baby, we've also teamed up with most of the leading chain retailers in China. This abundance of high-quality supply is the basis for us to continuously attract and retain users.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] Secondly, we enjoy huge potential in penetrating more of JD's users. Currently, Internet companies are focusing on cultivating the mindset for on-demand retail among their own user base, which means limited head-on competition among one another. And since JD's users are inherently purposeful shoppers, who demand higher merchandise quality and delivery speed, we believe it's more efficient for us to convert them into on-demand retail consumers. And we remain confident in penetrating 50% of the JD user base in the long run.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] And thirdly, on top of market share gains, we value sustainable growth by balancing growth and profitability through a combination of efforts in optimizing subsidies, improving delivery efficiency and increasing online marketing monetization. The profitability of JDDJ has improved significantly in the past few quarters to near breakeven. In the long run, we also believe that JDDJ has higher profitability potential compared with other players, test of our significantly higher AOV and online marketing monetizing rate.

[Operator]

Your next question comes from Alicia Yap with Citi.

[Alicis a Yap, analyst]

[Foreign Language] My first question is a follow-up on our management comment regarding the supermarket and the electronics category before the Singles' Day, the first 3 weeks of October, and then Singles' Day's rebound. And so just wondering what is the demand trend post Singles' Day that you're expecting for supermarket and non-supermarket category?

And then second question is on the cost of riders. So can I understand the increase in cost of riders is related to this intra-city delivery? Is there anything related depending on the type of the chain merchants that you are servicing? And which specific order demand during this 3Q that resulted in the higher rider costs? Do we expect a higher rider cost into 4Q given it is a promotional season and potentially colder weather?

[Zhaoming Chen Beck, executive]

Thank you, Alicia. So this is Beck. Let me address your 2 questions. So for the first question, so it's just like the weekend. So we finished like the Double 11 campaign. So still there is -- I don't think there's enough time for us to evaluate, like it's just 3 days daily sales to give you some color or comment for the post Double 11 campaign's trend.

So in terms of the second question, so about the rider cost. So in terms of the of absolute dollar amount of the rider cost, yes, it has increased either on Q-on-Q level or year-over-year level of the cost and overall and is still growing robustly, especially our [indiscernible] business is growing by 29%, within which our key accounts business is growing by 25% as we have discussed before.

So this is just the cost of overall business is growing. But in terms of like the unit cost as per like the order level or per [indiscernible] level basically is efficient in the same -- on a year-over-year basis. And in Q3, basically because usually it's like the summer season, so it takes more to recruit and retain riders compared to spring time or like the autumn season. So in Q4, we believe on a year-over-year basis, our per unit cost for the riders will decrease on a year-over-year basis.

[Operator]

Next question comes from Lei Zhang with Bank of America.

[Lei Zhang, analyst]

[Foreign Language] My first question is regarding the impact from our progress [indiscernible] delivery to [ RMB 59 ] in Q3? And can you share more color on this? Secondly, I noticed that we have disclosed live streaming related number during Double 11. And can you give us more thoughts on your movement regarding live streaming model?

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] Thank you for your question. Since the end of July, our delivery fee waiver campaign has covered basically all supermarket orders. And after that, we found that both conversion rates and repeat purchase rates increased, while AOV remained largely stable. Specifically, in August compared with July, the overall conversion rate of our supermarkets category improved by over 10%. And the next month, retention rate also increased by over 10%, while the AOV was substantially unchanged.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] Therefore, thanks to the initiative, the year-over-year growth of our GMV in the supermarket category accelerated in the third quarter of 2023 compared with the second quarter. And the program will be a long-term initiative to improve user experience.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] And in terms of the P&L impact, since the cost of the delivery fee waiver is shared by us and our merchant panels, the impact on the direct margin of JDDJ is in dozens of bids and manageable for us.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] To answer your second question about live streaming. As we've taken note of the rising popularity of live streaming during the Singles' Day promotion that just ended, JDDJ launched multiple live streaming events together with merchants and brands in categories, including supermarkets, consumer electronics and home appliances. This was the first time that our frontline operational teams engaged with retailers -- engaged with consumers to offer them value for money products deliverable within 1 hour. And we did see initial results with some sections attracting total yields exceeding RMB 1 million. The total GMV transacted via live streaming grew more than tenfold versus the June '18 promotion.

[Huijian He, executive]

[Foreign Language]

[Caroline Dong, executive]

[Interpreted] Overall, we are still in the exploration stage for the live streaming business. We plan to further optimize the process and enhance the product capability to better integrate LBS with live streaming. In the future, we are also going to encourage local merchants on our platform to host regular live streaming sessions, so as to provide our users with more immersive on-demand shopping experience.

[Operator]

The next question comes from Wei Xiong with UBS.

[Wei Xiong, analyst]

[Foreign Language] My first question is that we see Dada Now revenue growth is outgrowing our JDDJ this quarter. Do we expect that trend to continue in the fourth quarter and next year? And also the revenue mix shift, how would that impact our margin outlook in the fourth quarter next year as well? And secondly, just a housekeeping question. Could management share the GMV mix and AOV trend in this quarter?

[Zhaoming Chen Beck, executive]

Okay. So about the first question, so basically, we expect still the 2 platforms will grow in similar speeds in the following quarters or next year. So for the second question about GMV mix. So the broader supermarket category is still accounting for close to 50% of the GMV amount, while the 3C electronics account for 40% of the total GMV amount. And in terms of the average order value. So in Q3, the AOV is like RMB 250. This is like the update for Q3.

[Operator]

We have come to the end of our Q&A session. I'll now hand back to Ms. Caroline Dong for closing remarks.

[Caroline Dong, executive]

Thank you, operator. In closing, on behalf of Dada's management team, we'd like to thank you for your participation in today's call. If you require any further information, please feel free to reach out to us directly. Thank you for joining us today. This concludes the call.

[Operator]

That does conclude our conference for today. Thank you for participating. You may now disconnect.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]