How Alibaba turned a fake holiday into a $25 billion shopping extravaganza

25 December 2018  |  NEWS

It’s that time of year in the western world: turkeys, carols, and literally shopping ‘til you drop. Stampedes are a standard part of Christmas shopping fare, especially on that fateful weekend when prices are slashed. Amazon released less than ideal Q3 earnings, and they’re hoping to make it up through holiday sales. But as your international share broker will tell you, things are done a little differently in China. They don’t just speculate. They make things happen. And Alibaba – Amazon’s Asian competitor – is the perfect example.

China has their own Google, even their own internet. So, Alibaba figured they should have their own holiday too. They dubbed it Single’s Day, a festive occasion to celebrate yourself by buying nice things … for yourself. In Chinese, the direct translation for Single’s Day is ‘bare sticks’. It refers to unmarried men who in China are sometimes described as ‘bare branches' because they’re not adding any branches to the family tree.

A twist in the tale

From 1978 to 2016, China made it illegal for families to have more than one child, a policy that stayed in place until 2015 (Chinese nationals are now allowed to have two children.) Projections estimate that by 2020, China will have 30 million more men than women resulting in a large generation of bachelors. And because the families that kept their daughters placed a premium on them, a lot of these now educated women have good careers and less interest in marriage.

Since this unmarried demographic – the millennials of China – don’t use their money on childcare or family-related expenses, Alibaba persuaded them to spend on themselves. On Single’s Day in 2017 (November 11th) Alibaba made $25 billion in sales – all in that single day (pun intended). For comparison, 2017 global sales for (Black) Friday 24th November and (Cyber) Monday 27th November didn’t come close, and that’s both days combined.

A day for the boys

When it was first introduced, Single’s Day was for unwed (male) university students to hang out. China has a big gift-giving tradition, especially in the run-up to China National Day and the spring festival. This makes late September and January / February high-performing months for retailers. By deliberately sneaking Single’s Day into the low intermediary season, Alibaba built its own shopping boom.

Alibaba’s Daniel Zhang first sold the idea of Single’s Day shopping bonanzas in 2009, and it has gotten bigger every year. It’s this type of forward thinking (and its attendant scope for profit) that makes our Monex consultants recommend the brand to our investors. Alibaba trades on the New York Stock Exchange (NYSE: BABA) , and you can purchase their stock with brokerage starting as low as US $9.99. And thanks to our on-the-ground presence and open access to Chinese markets, you can start investing in offshore stocks in China with brokerage fees as low as US$20.

To learn more about investing in China, or to open your account and start trading today, fill out our Monex contact form and we’ll get right back to you.

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