November 11 is Singles’ Day in China. It is an unofficial shopping holiday that was started by Alibaba in 2009. It is called Singles’ Day because the repeated number “1” in “11.11” refers to single people in Chinese. Although Singles’ Day is often compared to Black Friday in the US, it is actually more similar to Cyber Monday, since it is an online shopping holiday.
Chart 1 shows annual Singles’ Day gross sales since inception. While Singles’ Day had only CNY 52 million sales in 2009, equivalent to $0.01 billion, it grew to $38.4 billion in 2019. The compound annual growth rate (CAGR) is 135.15%. Currently, Singles’ Day online sales surpass by miles those of the US’s Black Friday, Cyber Monday, or any other 24-hour shopping campaign, making it the biggest shopping holiday in the world. With more than half a billion shoppers participating, sales hit $1 billion in just 68 seconds last year. The Chinese e-commerce giant has hosted a number of celebrities, including Taylor Swift, to promote the shopping holiday, as well. Many internationally renowned brands have joined the Singles’ Day platform. Kim Kardashian, for instance, put her fragrance brand KKW on Tmall last year.
CAGR 135.15%
[caption id="" align="aligncenter" width="600"]
Chart 1. Annual Singles’ Day gross sales in billion US dollars[/caption]
Undoubtedly, the success of Singles’ Day has become a major chapter in Alibaba’s legendary storybook. But how does Singles’ Day affect Alibaba’s stock performance? Our research finds Singles’ Day to be a good example of the “buy the rumor, sell the news” type of event. Please see Table 1 below. If we compare Alibaba’s January 1 – November 11 return to the company’s return for the entire year, performance through November 11 has been better than full-year performance by 4.44% on average since Alibaba’s IPO in 2014; only 2019 saw a positive post-Singles’ Day performance.
| Year | 1.1-11.11 Return | 1.1-12.31 Return |
| 2014 | 26.90% | 10.70% |
| 2015 | -21.40% | -21.55% |
| 2016 | 23.01% | 14.50% |
| 2017 | 110.40% | 94.62% |
| 2018 | -21.13% | -25.36% |
| 2019 | 36.91% | 55.16% |
| Average | 25.78% | 21.34% |
Table 1. Alibaba stock annual performance leading up to Singles’ Day
Alibaba added a new sales window from November 1 to 3 this year, hoping to provide new companies and small businesses the opportunity to showcase their products. With 250,000 brands and 800 million consumers expected this year, we will soon find out whether COVID-19 has had any impact on Singles’ Day growth.
Leo Chen, Ph.D.
Portfolio Manager & Quantitative Strategist
Email | Bio
Note: Data for chart & table from Bloomberg as of November 6th, 2020.
Originally published via MailChimp: Check it out.
Links to other websites or electronic media controlled or offered by Third-Parties (non-affiliates of Cumberland Advisors) are provided only as a reference and courtesy to our users. Cumberland Advisors has no control over such websites, does not recommend or endorse any opinions, ideas, products, information, or content of such sites, and makes no warranties as to the accuracy, completeness, reliability or suitability of their content. Cumberland Advisors hereby disclaims liability for any information, materials, products or services posted or offered at any of the Third-Party websites. The Third-Party may have a privacy and/or security policy different from that of Cumberland Advisors. Therefore, please refer to the specific privacy and security policies of the Third-Party when accessing their websites.
Sign up for our FREE Cumberland Market Commentaries
Cumberland Advisors Market Commentaries offer insights and analysis on upcoming, important economic issues that potentially impact global financial markets. Our team shares their thinking on global economic developments, market news and other factors that often influence investment opportunities and strategies.
