Alibaba Records Slowest Ever Singles Day Shopping Festival Sales Growth — Report


According to a report published by Business Insider, Alibaba Group Holding Ltd. (BABA) recorded orders worth $84.54 billion during Singles Day, the 11-day shopping festival in China. The figure reflects an 8.45% year-over-year increase, the lowest in the event’s history.

Based out of the Chinese city of Hangzhou, Alibaba operates online and mobile marketplaces in retail and wholesale trade. It provides consumer-to-consumer, business-to-consumer, and business-to-business sales services through web portals. The company also offers electronic payment services, shopping search engines and cloud computing services.

Singles Day Sales

Since Alibaba created the event in 2009, this was the first year in which the e-commerce giant recorded single-digit growth. The company had sold $78 billion worth of products during the shopping festival last year.

The low growth rate comes amid slow Chinese economic growth due to relentless government crackdown. (See Insiders’ Hot Stocks on TipRanks)

Management Comments

The Chief Marketing Officer at Alibaba, Chris Tung, said, “In the early stages of 11.11, we focused on growth – the same way that parents would focus on a child’s height and strength. But as a child becomes a teenager, the parents shift their focus to nurturing the child’s sense of responsibility: the role he or she plays in society. That is what we’re doing now.”

Wall Street’s Take

Last week, Goldman Sachs (GS) analyst Piyush Mubayi maintained a Buy rating on the stock but lowered the price target from $253 to $252 (51.1% upside potential).

For the shopping festival, the analyst said, “Into the Singles’ Day promotions, they see encouraging industry growth with nationwide parcel volume on November 1 +28.5% year-over-year, while we expect GMV (gross merchandise value) to be more front-loaded into Phase I versus 2020.”

Analyst Recommendation

Overall, the stock has a Strong Buy consensus rating based on 19 Buys, 1 Hold and 1 Sell. The average Alibaba Group Holding price target of $239.79 implies 43.8% upside potential. Shares have lost 35.4% over the past year.

Website Traffic

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Alibaba’s performance.

According to the tool, the company’s website traffic registered a nearly 5% increase in global visits in October. Moreover, website traffic has gone up 3.5% year-to-date.

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