Single's Day 2018 - What's In Store For The World's Biggest Shopping Day?

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Includes: BABA, EMQQ, JD
by: Kevin Carter
Summary

Single's Day is the largest 24-hour shopping event in the world.

In 2017 Alibaba alone racked up $25 billion in sales.

This year shapes up to be even larger than last year.

Historically a China phenomena, the holiday is beginning to spread across Asia.

The biggest shopping day in the world is not Black Friday, Cyber Monday or any other day associated with a U.S. or European holiday. Rather, it is China’s Single’s Day, although the holiday and its associated shopping event is slowly reaching other countries.

Alibaba (BABA), which brought the event to prominence in 2009 and JD.com (NASDAQ:JD), were the largest beneficiaries of the sales event in 2018. Recent announcements by Alibaba raise the possibility that this year’s event could be even larger than last year’s.

Investors seeking exposure to beneficiaries of Single’s Day could purchase shares of Chinese ecommerce companies such as Alibaba or JD.com. Or they could purchase shares of EMQQ – the Emerging Markets Internet and Ecommerce ETF – which held shares of both BABA and JD as of 10/29/18.

What Is Single’s Day?

Single’s Day is a holiday popular among young Chinese people that celebrates their pride in being single. The event began as a protest of sorts against Valentine’s Day, propelled by college students in the 1990s. The date 11/11 is significant because of the solitary implications of the number 1. Much like other holidays, Singles’ Day has turned into a retail event.

Single’s Day really came into prominence in 2009, when Alibaba turned the holiday into an online — and occasionally brick-and-mortar — mercantile extravaganza. As a result, Single’s Day has become linked with Alibaba. Each year the event grows larger. In 2017, Alibaba sales passed $25 billion and JD’s sales topped $19 billion, making it the biggest shopping day in the world, offline or online, according to Fortune.

More Than Just Retail

Alibaba’s Tmall hosts a national television gala on November 10 with a countdown to the midnight start of Singles' Day that gives the event a New Year’s Eve at Times Square feel. The show features international stars and historically captures an audience of 150 to 200 million viewers, according to Fortune. This gala will be augmented by product launch events, live-stream shows, fan contests, and demonstrations.

What’s in Store for 2018?

As this is Jack Ma’s last year at Alibaba, the company has big things in store for this year’s Single’s Day.

On 10/19, Alibaba officially kicked off the Single’s Day festival with an event in Beijing, China, where the company outlined how the company's “new retail" strategy will help make this year's event be the largest ever "in terms of scale and reach," according to CNBC.

Global Push: This year, companies involved in Single’s Day, particularly Alibaba, will focus on the expansion of the celebration outside of China. Singles' Day has caught on in Taiwan and Hong Kong and is starting to see traction in Southeast Asia. For the first time, Alibaba’s southeast Asia platform, Lazada, will participate in Single’s Day by marketing the event to customers in Singapore, Malaysia, Thailand, Indonesia, the Philippines, and Vietnam.

Beyond Ecommerce: Alibaba intends to add Singles' Day benefits to physical stores as well. For example, around 200,000 mom-and-pop stores that are powered by Alibaba's Ling Shou Tong platform — which provides technological tools for small retailers — will offer online sales and promotions, according to Business Insider. Alibaba's supermarket chain, Hema, will also have promotions in select stores.

Local Services: Alibaba will focus on its local services platforms such as food delivery platform ele.me and Koubei. According to Business Insider, 150,000 merchants that partner with Alibaba subsidiary Koubei will offer half-off deals on things like catering, beauty, and karaoke bars.

Summary

Single’s Day is the largest 24-hour retail event in the world. Since Alibaba brought it to prominence in 2009, the event has grown each year. This year, Alibaba is looking to grow the event even more by expanding it across Asia and using it to boost its “new retail” strategy. Alibaba and JD.com were last year’s largest beneficiaries of the event.

EMQQ – the Emerging Markets Internet and Ecommerce ETF – invests in companies engaged in ecommerce in the emerging markets. Many of the company’s holdings are involved in ecommerce in China and across Asia and have the potential to benefit from Single’s Day. As of 10/29/18, EMQQ held shares of Alibaba and JD.com.

Disclosure: I am/we are long BABA, JD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.