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Chinese tech giant Alibaba’s (BABA) – Get the report The big 11.11 Singles Day buying event could generate $ 45 billion or more in sales this year, analysts say, at a time when the retail industry has been challenged and digital sales have been crucial for survival.
This year’s event, which Alibaba started promoting in 2009 as a day for individual shoppers to shop for gifts online and has since grown into the world’s largest shopping event, included for the first time a “Phase 1” sales period which ran from November 1 to November 1. 3. The company added this to give small brands and new retailers on its platform the chance to gain more exposure and improve the consumer experience.
Analysts have warned that due to the change in format and the impact of the global pandemic, sales estimates are more difficult to make and may not be as comparable to results in previous years.
In 2019, Singles Day posted record revenue of $ 38.4 billion, up 24.6% from $ 30.8 billion the year before. By comparison, Cyber Monday generated $ 9.4 billion in sales in the United States last year, while Black Friday generated $ 7.4 billion in online sales.
“If I had to offer a screening, I would say [this year’s Singles Day generates] around $ 45 billion for the entire shopping festival, including phase 1, ”said Kevin Carter, founder of the Emerging Markets Internet & Ecommerce ETF, which tracks the performance of e-commerce companies and Internet markets emerging listed on the stock exchange. (Carter is also chairman of the ETF Index Committee). This would represent a growth of around 17% compared to 2019.
Youssef Squali, analyst at Truist, said that singles’ day sales have traditionally increased by around 20% to 30% each year and that he expected them to grow in the order of 25% to 30% in 2020, bringing the total transport to between 48 billion dollars. and $ 49.92 billion. Squali said he expects overall sales for the quarter to increase by the same 25% to 30% range.
“If they grow up [Singles Day sales] 30% or more, we would definitely consider it a successful event, but that wouldn’t necessarily mean they would kill him for the entire quarter, ”Squali noted.
This year, Alibaba is encouraging global brands to take the opportunity to reach Chinese consumers online at a time when physical sales have been so severely affected by the coronavirus pandemic.
“This year, the focus is on global small and medium brands and live streaming,” Carter said. Live streaming has become a very popular practice in China in which an influencer presents a product or service in a live broadcast and can sell it directly to viewers.
American consumer brands like shoe company All Birds and Michigan vacuum and floor care company Bissell are both participating in Singles Day for the first time. Since April, more than 200 American brands have launched on TMall Global.
“The Chinese consumer has always embraced American brands, although the ongoing American commercial attacks on China may have reduced their appeal,” Carter noted. “However, the Chinese consumer is back and they are looking more and more for new high quality products. So I suspect that many American brands will be very successful this year.”
Since October 20, brands have been launching new products and exploring new ways to reach consumers who use this time to put things in their baskets for Singles Day.
“They make these events more global,” Squali said. “Over the past five years, [they have been] addition of many American brands, European luxury brands [and] Japanese brands in China. “
Alibaba last week released stronger-than-expected second quarter results on Thursday, as e-commerce core revenues jumped nearly a third after China eased coronavirus lockdown restrictions.
Since the start of the year, Alibaba shares are up 37%.
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