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Alibaba’s Singles Days is forecast to exceed the $38 billion GMV is reached last year
Alibaba
Alibaba Group will bring new goods and fresh names from around the world to shoppers across China for the big Singles Day shopping event on Nov. 11. Perhaps one of the biggest names is Taylor Swift.
Alibaba BABA, -7.98% has announced a partnership with Bravado, Universal Music Group’s merchandising and brand management arm, which will launch merchandise tied to Taylor Swift’s latest album “Folklore” to China, two weeks ahead of other parts of the world.
Taylor Swift previously performed for the event and Katy Perry performed this year.
Nike Inc.’s NKE, -1.02% Jordan brand is also releasing the Air Jordan 6 WMNS “Singles Day” sneaker, according to reports.
Alibaba’s Singles Day, which launched in 2009 and is held each year on Nov. 11, is one of the busiest online shopping days of the year and continues to grow in size and scope. While some companies and shoppers are just catching on, others in the fashion and retail world have seen the potential for some time.
Much like Amazon.com Inc.’s AMZN, -2.67% Prime Day event, which took place last month, Singles Day has been extended across multiple days, with pre-sale events starting Oct. 21. More than 800 million consumers are expected to participate this year. The event also includes celebrity appearances, livestreaming events and more.
Read: Amazon has already had its most profitable year ever, and just set a record for sales in a quarter
For 2020, two million new products are expected to launch, more than 250,000 brands are going to participate and more than 200 luxury brands, including first timers like Prada and Cartier, will be selling goods.
In 2019, gross merchandise volume (GMV) for the event reached $38.38 billion. Singles Day is expected to surpass that this year.
Black Friday and Cyber Monday reached $6 billion in GMV last year.
“Singles Day will be a good indicator of the health of the Chinese market in general, which seems to be on a tear at the moment,” said Andy Halliwell, senior director of retail at digital consultancy Publicis Sapient.
“As Alibaba expands internationally, Singles Day will look to rival Western offerings such as Amazon Prime Day and even Black Friday.”
GlobalData forecasts that e-commerce in China will grow 22.3% in 2020, with sales reaching $3.2 trillion by 2024.
As the global pandemic has driven more shoppers to e-commerce, companies like Alibaba, Amazon, Walmart Inc. WMT, +1.88% and many others have beefed up their digital offerings and capabilities, accelerating the e-commerce shift that began even before COVID-19.
“With rising purchasing power and internet-connected populations unrivaled by more advanced developed markets, the successes from events like Singles Day only serve to underscore the attractive growth opportunities for investors looking to gain exposure to the booming internet and e-commerce theme,” said Chelsea Rodstrom, a research analyst specializing in Asian Markets at Global X, the U.S. ETF arm of Mirae Asset.
Also: Alibaba gets its Whole Foods with new $3.6 billion investment in Chinese supermarket operator
The Global X MSCI China Consumer Discretionary ETF CHIQ, -3.47% is up more than 74% for the year to date. The Amplify Online Retail ETF IBUY, -2.42% has gained 84.6% for the period.
Alibaba recently announced a partnership and investment in luxury e-commerce site Farfetch Ltd. FTCH, -8.46% that will include Cie. Financière Richemont S.A. CFR, -2.02%, Cartier’s parent company.
See: Farfetch shares soar after $1.15 billion Alibaba, Richemont, Artemis investment
“The Chinese luxury market – which is expected to account for half of global luxury sales by 2025 – consists of hundreds of millions of young, digitally-native consumers,” said Daniel Zhang, chief executive of Alibaba, in a statement about the deal.
Marc Jacobs, another iconic fashion name, announced it would be joining TMall in September with items ranging from handbags to shoes and clothing.
And: Alibaba shares post worst day since 2015 after Ant Group IPO is suspended
Alibaba has also focused on bringing small- and medium-sized U.S. companies to Chinese customers, hosting a contest that yielded nine winners including America’s oldest apothecary, C.O. Bigelow, haircare brand Punky Colour and home goods brand French Bull.
“Increasingly, U.S. and European consumers are also participating in Singles’ Day as well as U.S. brands looking to reach global shoppers,” said Kelvin Phua, head of payment networks at PPRO, a local payments services provider.
According to Phua, some new shopping habits will persist even after the pandemic is over.
“During lockdown more than two-thirds of customers in some markets have tried a new product or service and of these, a quarter do not plan to return to their old habits once lockdown has ended.”
Last week, Alibaba announced earnings that beat expectations, with revenue up 30%.
Don’t miss: Alibaba earnings beat expectations but stock still dips
“Longer term, we believe Alibaba is well positioned to capitalize on the new growth opportunities from expedited online penetration and digitization post-COVID, which should expand Alibaba’s total addressable market on both the consumer internet economy and industrial internet economy,” wrote Benchmark analysts led by Fawne Jiang.
Benchmark rates Alibaba shares buy with a $355 price target.
“COVID-19 has caused major structural changes, accelerating the shift in consumption habits online, especially in lower-tier cities and segments with lower online penetration including food/grocery and cloud, with Alibaba set to derive disproportionate financial benefits over time,” wrote Truist Securities in a note.
Truist rates Alibaba stock buy with a $308 price target.
Alibaba shares have gained 27.5% for the year to date while the benchmark S&P 500 index SPX, -0.01% is up 9.7% for the period.
