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Not as Prime as Single's Day | EMQQ

During 2019, Amazon (AMZN) extended its Prime Day sale promotion to two days.  The event spanned 15th and 16th July and was a record for the company.  Yet, the event did not come close to the sales volume generated by Single’s Day (11/11) in China during which Chinese ecommerce company Alibaba (BABA) experienced record volume.

Investors may be able to participate in the potential of ecommerce in China, and the upcoming Single’s Day event, through the purchase of Alibaba (BABA) shares.

Amazon's Prime Day

In July 2015, Amazon turned 20. On the eve of its birthday, the company introduced Prime Day, a global shopping event.  Its goal was to offer its Prime members better shopping deals than Black Friday (the Friday after Thanksgiving).  Over the five Prime Days since, the event has continued to grow.

According to an article on Yahoo Finance, 2019, was Amazon’s largest Prime Day [1].  The article noted that analysts estimate that over $6 billion in sales were generated during the two-day event.

While Amazon didn’t disclose its sales, it did note that sales at third-party vendors--made up mostly by independent small- and medium-sized businesses--doubled over the period to $2 billion. The company said it sold more than 175 million items over the course of the event, up from 100 million items last year, according to Yahoo Finance.

An Opportunity to Sign Up New Members

Amazon looks at its Prime Day event as an opportunity to sign up new members to its Prime platform. 

Yahoo Finance noted that Amazon said in a statement that it “welcomed more new Prime members on July 15 than on any previous day, and almost as many on July 16 – making these the two biggest days ever for member signups.”  This may help the company generate more in recurring revenues and help to offset the costs of the event.

Not as Prime as Single's Day

While impressive, sales during Prime Day do not come close to those generated during Single’s Day, the world’s largest shopping day, according to Forbes [2].

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. 

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. 

Single's Day Record Sales Volume

2018’s Single’s Day generated record sales volume of $30 billion for Alibaba [3].  While the company’s sales were impressive, the company reported additional staggering numbers.  Over 1 billion orders were processed by Cainaio, Alibaba’s logistics company.  The company’s website recorded sales of over RMB 100 million ($14.9 million) across 237 brands [4].

Alibaba expanded the focus of its Single’s Day event outside of China into parts of Southeast Asia and even the United States.  It also used the event to drive sales for its new retail platform – a strategy that blends both online and brick-and-mortar retailing.

Summary

Single’s Day still reigns as the world’s largest shopping day, reflecting the potential of consuming class in China. While Alibaba was the prime beneficiary of the event during 2018, other Chinese ecommerce platforms, such as JD.com (JD), also benefited.

Investors looking to gain exposure to the potential expansion of the consumer class in the emerging markets may do well to consider buying shares of the Emerging Markets Internet and Ecommerce UCITS ETF (EMQQ).

Find out more about the Emerging Markets Internet & Ecommerce UCITS ETF (EMQQ) here

Read our EMQQ Whitepaper "The Great Confluence" here.

Article Date: 13th August 2019. 

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