On September 21, the leading local on-demand retail and delivery platform, Dada Group(Dada Nexus, NASDAQ: DADA), and Mengniu, a leading manufacturer and distributor of dairy products in China, signed a new business agreement in Beijing announcing an extension of their business partnership, which expands their collaboration on cutting-edge online retail models and marketing capabilities. As per the new agreement, Mengniu and Dada Group will join forces in multiple aspects, not limited to but including digital marketing, user operation, product category management and supply chain capacity.
Fei Gao, Senior Vice President of Mengniu, said, “Mengniu and Dada Group will continue to utilize each other’s strengths to launch a more comprehensive local on-demand retail model for dairy products. Through this expanded partnership, Mengniu will focus on integrating online and offline transactions, adapting to evolving user needs and bringing people to its online platform, JDDJ. Dada Group will also be revamping our digital management capabilities to improve worker efficiency, business efficacy and management.”
Philip Kuai, Founder, Chairman and CEO of Dada Group, commented, "Mengniu is a very important and close partner of Dada Group, and its high quality and innovative products are beloved by Chinese consumers. The marketing, product operation and supply chain capabilities of our JDDJ platform will help Mengniu further enhance its product innovation and sales capabilities to bring our consumers the best dairy product shopping experience the market has to offer."
JDDJ as one of the most important O2O channel to boost online sales
With JDDJ’s resources and support, Mengniu was able to increase its sales on JDDJ’s platform by 176% in January 2020 to August 2020 since the year-ago period, and the company is looking to continue this positive trend.
In terms of digital marketing innovation, JDDJ will create customized marketing campaigns for Mengniu so it can fully achieve its sales potential. Through targeted marketing, it can further build brand recognition, brand loyalty and improve users’ purchase frequency. In addition, with access to the user data on the entire domain and with the help of JDDJ’s Monica system technology, which analyzes user behavior, Mengniu will have unparalleled insight into its customers’ preferences, allowing it to create customized marketing solutions for each individual.
To improve supply chain management, the companies will further explore the consumption characteristics of dairy products in O2O channels, in order to meet demands and fulfill purchases with greater speed than ever before. Dada’s Haibo system in particular will be useful in monitoring the supply chain and will be used to help Mengniu unlock the potential of integrated O2O omni-channel price and inventory management, helping it to optimize the sales strategy and promotions in real time.
Joint exploration in the online-offline integration of new uni marketing models
Mengniu has always been eager to explore new business models of online commerce, globalization and on-demand retail. As a leader in on-demand retail, JDDJ has established partnerships with nearly 100,000 stores and nearly 60 percent of China’s top 100 supermarkets. Meanwhile, JDDJ’s "Omni-channel Fulfillment" connections with retailers will help offline stores seamlessly integrate into JD.com’s platform and enter online retail, which is far more efficient and customer-friendly as the integrated businesses will offer improved home-delivery services and JDDJ’s existing infrastructure.
In addition, capitalizing on its increased presence in lower-tier markets, JDDJ can help Mengniu increase sales numbers in smaller, more rural cities, which will increase user awareness, brand sales and product penetration, enhancing the competitive strength of Mengniu. At the same time, JDDJ will also aggregate regional retailers and resources, build up intra-city marketing ecosystems, develop differentiated product structures for different channels, regions and scenarios and optimize product supply chains.
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