Alibaba Group Holding Ltd (NYSE:BABA) is poised for a record-breaking 2020, the COVID-19 pandemic having created a perfect business opportunity. The Chinese e-commerce behemoth is fresh from setting a new record when it comes to singles day sales.
Record Singles Say Sales
The e-retailer generated $74.1 billion gross merchandise volume during the 11 days, representing a 26% year-over-year increase. The 24-hour shopping event is one of China’s biggest, synonymous with huge discounts across millions of products. The event generates more sales than Black Friday and Cyber Monday combined.
The 26% gross merchandise increase could be attributed to Alibaba and JD.com, extending the shopping event from November 1 to November 12. In the yesteryears Single Days shopping, bonanza only took place in a day.
The Singles Day could also have benefited from increased online shopping owing to the COVID-19 pandemic. The Chinese e-commerce sector has experienced tremendous growth in recent months on shopping patterns shifting to online. The increase also affirms the strength of the Chinese consumer.
Likewise, Alibaba is benefiting on imported goods becoming a big hit as fewer people are traveling abroad owing to COVID-19 concerns. Its shopping platform run by Alibaba has brought over 2,600 new overseas brands for the first time.
In addition, Alibaba has been making inroads into low tier Chinese cities where e-commerce penetration is still low. The company has succeeded in attracting new customers, conversely fuelling the strengthening of the e-commerce empire.
China Antitrust Stalemate
Amid the impressive numbers of Singles Day Sales, Alibaba stock continues to edge lower. The stock was down by close to 8% after the Chinese government proposed a new set of antitrust regulations that could take a toll on big retailers.
The new set of rules defines what constitutes anti-competitive behavior covering areas around pricing, payment methods, and the use of data to target shoppers. Implementation of the new antitrust rules could have a negative impact on Alibaba, given its sheer size and the amount of power it wields on e-commerce.
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