Dingdong (DDL, Financial), after strategically prioritizing efficiency while balancing growth three years ago, is now successfully reducing losses and achieving profitability alongside renewed expansion. The company recently disclosed its Q3 2024 financial results, showing a revenue of 6.54 billion yuan, up 27.2% year-over-year, with consistent positive growth over the past three quarters. Under the Non-GAAP standard, Dingdong's net profit reached 160 million yuan, up over nine times year-over-year, marking eight consecutive profitable quarters. Under GAAP, net profit soared over 62 times to 133 million yuan, maintaining profitability for three quarters.
Dingdong's impressive financial performance reflects its refined operational strategies and market opportunities. In the third quarter, Dingdong's Gross Merchandise Value (GMV) surged to 7.27 billion yuan, up 28.3% year-over-year. This robust GMV growth is closely linked to its strategic focus on the Jiangsu, Zhejiang, and Shanghai regions, where the company reached its goal of opening 80 new front warehouses within nine months. GMV in Shanghai and Jiangsu-Zhejiang grew by 24.5% and 40%, respectively, with 13 cities achieving over 50% year-over-year growth. Shanghai's daily average orders approached 1,700, while Jiangsu and Zhejiang both exceeded 1,000 orders.
Dingdong's strong product offerings and supply chain capabilities have significantly improved operational efficiency, boosting user engagement and retention. The average monthly ordering users rose by 24.5% to 8.22 million, and average monthly income per user increased by 6.4%. Members outperformed regular users, with an 8.8% rise in monthly income per user to 540 yuan and a 9.8% increase in order frequency to 7.6 times per month.
The Q3 report indicates a strong value signal for investors, highlighting Dingdong's potential for sustained growth. The company's strategic differentiation in product offerings, particularly in fresh seafood, beverages, and ice cream, fueled more than half of its overall growth. In Jiangsu, Zhejiang, and Shanghai, the company enhanced product variety and price competitiveness, especially in convenience goods and beverages, achieving significant milestones.
Looking ahead, Dingdong plans to capitalize on its success in Jiangsu-Zhejiang-Shanghai by increasing investments in these regions, with a new target of opening 110 front warehouses this year. This strategic focus is expected to support orderly growth, given the region's high purchasing power and acceptance of fresh produce retail.
Dingdong's positive market feedback in these areas suggests its plans to expand to other domestic markets could further elevate its growth trajectory. The company's latest performance illustrates that its strategies are on the right track, with a promising outlook for continued growth.
This strong performance led to Dingdong's stock price rising significantly, despite overall declines in U.S.-listed Chinese stocks, closing at $4.45, the highest in one and a half years. As Dingdong continues to deliver on growth expectations, further stock valuation reassessments by the market are anticipated.
