Alibaba’s Singles Day online shopping frenzy has generated a whopping RMB498.2 billion ($74.1 billion) in sales amid signs that the Chinese economy is recovering from the aftermath of the Covid-19 crisis.
Alibaba (BABA) reported that gross merchandize volume (GMV) generated at this year’s event increased by 26% compared to the same period last year. The world’s biggest sales extravaganza, which in recent years was held on Nov. 11, was this year extended to an 11-day campaign with two windows to shop for discounted items. The US was this year’s top international country selling to China, contributing more than RMB36.2 billion ($5.4 billion) of GMV.
In total 250,000 brands participated in 11.11 this year, of which 31,000 were overseas brands. Over 470 brands, including Apple, L’Oréal, Nike, and Adidas surpassed RMB100 million ($14.9 million) in GMV. Alibaba’s online platform handled 583,000 orders per second during peak times as 800 million consumers participated in the event.
“The Chinese economy has bounced back to pre-pandemic levels,” commented Alibaba founder Joe Tsai. “Without having to leave China, consumers can access a rich selection of products from around the globe, just using their smartphones.”
“We look forward to helping even more international brands accelerate their entry and growth in China,” Tsai added.
The 11.11 shopping festival was launched in 2009 with participation from just 27 merchants as an event for brands to boost their online shopping channel.
The Chinese e-commerce giant has already served investors well during the coronavirus pandemic with its shares up 25% so far this year as stay-at-home mandates and the work-at-home trend forced more and more people to shop online and change their purchase preferences. (See Alibaba stock analysis on TipRanks).
However, the stock has shed more than 10% over the past five days amid investor concern that anti-monopoly guidelines drafted by China’s market regulators could have a negative impact on the e-commerce giant’s operations.
Meanwhile, Raymond James analyst Aaron Kessler reiterated a Buy rating on the stock , saying that he views “the guidelines as an attempt to check the power of large tech platforms, including the largely ecommerce marketplaces.”
“At this point, we do not believe the antitrust guidelines would have any material impact on Alibaba revenues,” Kessler commented. “It could also serve to limit new entrants from aggressively pricing to gain market share, which could be viewed as a positive for [Alibaba].”
Turning to other Wall Street analysts, the bulls have it all. The Strong Buy consensus boasts 24 unanimous Buy ratings. That’s with an average price target of $338.55 indicating that another 27% upside potential lies ahead.
Related News:
Uber Posts Worse-Than-Feared Loss On Weak Rides Demand; Wedbush Raises PT
Norwegian Cruise Posts Huge 3Q Loss; Shares Rise On Recovery Hopes
American Airlines Drops 4% On Plans To Sell 38.5M Shares
