Singles Day – China’s Hallmark Holiday, Done Big

Enter Singles Day, November 11. Started in the university scene during the 1990s, as a day to celebrate bachelorhood, over the last ten years it has become the largest online shopping day in China. This is now a day when singles buy a special gift to woo a special someone, or couples make purchases together. Alibaba Group Holdings (BABA – Research Report) encouraged the shopping with special sale prices available online this day and quickly turned it into the company’s annual cash cow. This years’ Singles Day matched its hype, though not without some asterisks. Let’s take a closer look at what happened.

Over $30 Billion In Sales

Start with the rawest number: $30.8 billion worth of sales in 24 hours. The first billion was achieved in one minute, 25 seconds, while the $10 billion mark was reached in just over one hour. The fast start shows that Alibaba’s marketing is effective, and customers were ready and waiting for the sales event to begin.

The total sales were 27% higher than last year, which itself was a record-breaking Singles Day. Interestingly, during the event, the post-90s generation accounted for 46% of total buyers. SunTrust Analyst Youssef Squali (Track Record & Ratings) said of the year-over-year sales growth: “[It] was particularly impressive amid concerns of the macro headwinds and also points to a 40% increase in consumers who made purchases from international brands as well as the 23% increase in the delivery orders from Alibaba’s Cainiao logistics network.” Squali gives BABA a $180 price target.

Impressive as the day was, however, it was also smaller than 2017’s 39% year-over-year beat. Seeking a reason for the difference, some analysts referenced the lower spending habits of rural Chinese buyers, as well as something perhaps unexpected. Oppenheimer’s Jason Helfstein (Track Record & Ratings), in a special report issued specifically on the Singles Day sales: “We believe this suggests a weaker macro environment in China, on top of the law of large numbers.”