JD.com's Dada opens probe regarding suspicious ad revenue data

JD.com's on-demand delivery affiliate Dada Nexus (達達) has opened probe after it discovered certain suspicious ad revenue data in the course of its routine internal audit.

JD.com said in an official statement on Hong Kong Stock Exchange that the suspicious practices identified may cast doubt on certain revenues from Dada’s online advertising and marketing services, together with Dada’s operations and support costs, for the first three quarters of 2023. 

According to the commission file submitted by Dada Nexus to the US Securities and Exchange Commission, it estimated that approximately RMB$500 million of revenues from online advertising and marketing services and operations and support costs may have been overstated respectively, for the first three quarters of 2023.

Moreover, Dada Nexus said the revenue guidance previously provided by the company for the fourth quarter and full year of 2023 should no longer be relied upon until further notice.

The audit committee of Dada Nexus’ board of directors has determined to conduct an independent review with the assistance of independent professional advisers.

“The company has always been and will remain committed to maintaining high standards of corporate governance and internal controls, as well as transparent and timely disclosure in compliance with the applicable rules and regulations,” the announcement reads. 

According to Chinese news site 21st Century Business Herald (21世紀經濟報導), a person familiar with the matter said the incident could be caused by an individual being suspected of committing a fraud crime. The company has reported the case to the public security organs and is  believed to have a limited impact on the company.

MARKETING-INTERACTIVE has reached out to JD.com and Dada for a statement. 

Dada Nexus is a platform for local on-demand retail and delivery in China. The company operates JD-Daojia (京東到家), a Chinese on-demand retail platform for retailers and brand owners, and Dada Now, a local on-demand delivery platform open to merchants and individual senders across various industries and product categories.

Related articles:

Gucci unveils digital flagship store on JD.com to promote digital innovation
JD.com unveils large language model to drive innovations across industries
JD.com names new CEO and executive director as Xu Lei transitions on
Tiffany & Co. launches online flagship store on JD.com