SKADDEN, ARPS, SLATE, MEAGHER & FLOM
PARTNERS CHRISTOPHER W. BETTS GEOFFREY CHAN * ANDREW L. FOSTER * CHI T. STEVE KWOK * EDWARD H.P. LAM ◆* HAIPING LI * RORY MCALPINE ◆ JONATHAN B. STONE * PALOMA P. WANG
◆ (ALSO ADMITTED IN ENGLAND & WALES) * (ALSO ADMITTED IN NEW YORK)
REGISTERED FOREIGN LAWYERS Z. JULIE GAO (CALIFORNIA) |
世達國際律師事務所
42/F, EDINBURGH TOWER, THE LANDMARK 15 QUEENS ROAD CENTRAL, HONG KONG
TEL: (852) 3740-4700 FAX: (852) 3740-4727 www.skadden.com |
AFFILIATE OFFICES - BOSTON CHICAGO HOUSTON LOS ANGELES NEW YORK PALO ALTO WASHINGTON, D.C. WILMINGTON - BEIJING BRUSSELS FRANKFURT LONDON MOSCOW MUNICH PARIS SÃO PAULO SEOUL SHANGHAI SINGAPORE TOKYO TORONTO |
February 14, 2020
Confidential
Mr. Larry Spirgel
Mr. Jeff Kauten
Mr. Joseph Cascarano
Ms. Inessa Kessman
Division of Corporation Finance
Office of Technology
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, D.C. 20549
Re: | Dada Nexus Limited (CIK No. 0001793862) |
Response to the Staffs Comments on
Amendment No. 1 to Draft Registration Statement on Form F-1
Submitted on January 17, 2020
Dear Mr. Spirgel, Mr. Kauten, Mr. Cascarano and Ms. Kessman:
On behalf of our client, Dada Nexus Limited, a foreign private issuer organized under the laws of the Cayman Islands (the Company), we submit to the staff (the Staff) of the Securities and Exchange Commission (the Commission) this letter setting forth the Companys responses to the comments contained in the Staffs letter dated January 31, 2020 on the Companys amendment No. 1 to draft registration statement on Form F-1 submitted on January 17, 2020 (the Draft Registration Statement).
Securities and Exchange Commission
February 14, 2020
Page 2
Concurrently with the submission of this letter, the Company is submitting its amendment No. 2 to draft registration statement on Form F-1 (the Revised Draft Registration Statement) via EDGAR to the Commission for confidential review.
To facilitate the Staffs review, we will separately deliver to the Staff today five courtesy copies of the Revised Draft Registration Statement, marked to show changes to the Draft Registration Statement.
The Staffs comments are repeated below in bold and are followed by the Companys responses. We have included page references in the Revised Draft Registration Statement where the language addressing a particular comment appears. Capitalized terms used but not otherwise defined herein have the meanings set forth in the Revised Draft Registration Statement.
Conventions that Apply to this Prospectus, page 7
1. | We note your response to prior comment 3. Please disclose that you treat each account as a separate consumer even though certain consumers may have set up more than one account. |
In response to the Staffs comment, the Company has revised the referenced disclosure on page 7 of the Revised Draft Registration Statement.
Managements Discussion and Analysis of Financial Condition Key Factors Affecting Our Results of Operations, page 79
2. | We note your response to prior comment 9. Please discuss the reason(s) behind the significant drop in your retention rate from 2018 to 2019. |
The Company respectfully advises the Staff that it defines retention rate for any specific period as the percentage of consumers who continued to be active and placed at least one order on JDDJ during that period among all consumers who first placed order on JDDJ in 2016 or before and were active consumers in 2017. The Company uses the same cohort of consumers namely those who first placed order on JDDJ in 2016 or before and were active consumers in 2017 as the denominator when calculating retention rates for subsequent periods. The drop in retention rate is a natural trend with the lapse of time. In response to the Staffs comment, the Company has revised the referenced disclosure on page 81 of the Revised Draft Registration Statement.
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Securities and Exchange Commission
February 14, 2020
Page 3
3. | We note your response to prior comment 7. Please disclose the reasons behind the decrease in the number of orders delivered in the twelve months ended September 30, 2018 and December 31, 2018. |
In response to the Staffs comment, the Company has revised the referenced disclosure on page 91 of the Revised Draft Registration Statement.
Key Components of Results of Operations, page 82
4. | You disclose on page 82 that revenues from JDDJ are earned from four different types of services. Please revise your table on page 83 to separately quantify JDDJ revenues from delivery services where you act as a principal and JDDJ commission fee revenues where you act as an agent. Please also clarify which types of services are included in other services revenues of RMB23,402 for the year ended December 31, 2018. Similarly revise your table on page F-19. |
In response to the Staffs comment, the Company has revised the referenced disclosure on pages 83, F-19, F-20, F-59 and F-60 of the Revised Draft Registration Statement.
5. | In your discussion of fulfillment expenses on page 84, and elsewhere as appropriate, please separately define, discuss and quantify expenses related to rider incentives when you act as the principal in the delivery transaction. Furthermore, please separately define, discuss and quantify expenses related to negative revenue when you act as agent in the delivery transaction that results in a loss. |
In response to the Staffs comment, the Company has revised the referenced disclosure on pages 84, F-17, F-18 and F-19 of the Revised Draft Registration Statement.
Consolidated Statements of Operations and Comprehensive Loss, page F-5
6. | We note your response and revised disclosures to prior comment 16. Please revise and present a line item that separately states the amounts of cost of services in accordance with Rule 5-03.2 of Regulation S-X. Also separately disclose and provide a related discussion in MD&A. |
The Company noted the diversity in presentation of costs and expenses and certain companies in the platform and delivery business such as Grubhub Inc. and Waitr Holdings Inc. do not present cost of revenue. In response to the Staffs comment, the Company has revised the presentation and related disclosure on pages 11, 17, 76, 81, 83, 84, 86, 87, 89, 99, 100, F-5, F-17, F-18, F-19, F-20 and F-54 of the Revised Draft Registration Statement to follow the presentation of Grubhub Inc. as its business nature and composition of costs and expenses are similar as the Companys.
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Securities and Exchange Commission
February 14, 2020
Page 4
The Company views the revised presentation is comparable to its industry peers and clearly reflects the costs and expenses incurred in the Companys business, and would appreciate the Staffs understanding and agreement in this regard.
* * *
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If you have any questions regarding the Revised Draft Registration Statement, please contact the undersigned by phone at +852 3740-4863 or via e-mail at julie.gao@skadden.com, or Hui Feng, partner at Deloitte Touche Tohmatsu Certified Public Accountants LLP, by telephone at +86 21 6141-2173 or via email at hufeng@deloitte.com.cn. Deloitte Touche Tohmatsu Certified Public Accountants LLP is the independent registered public accounting firm of the Company.
Very truly yours, |
/s/ Z. Julie Gao |
Z. Julie Gao |
Enclosures.
cc: | Philip Jiaqi Kuai, Chairman of the Board of Directors and Chief Executive |
Officer, Dada Nexus Limited
Beck Zhaoming Chen, Chief Financial Officer, Dada Nexus Limited
Hui Feng, Partner, Deloitte Touche Tohmatsu Certified Public Accountants LLP
David Zhang, Esq., Partner, Kirkland & Ellis International LLP
Steve Lin, Esq., Partner, Kirkland & Ellis International LLP