Bankinter | Good prospects for Singles’ Day in China (11.11) which is expected to reach new highs on the day of the highest volume of online purchases in the world. As a reference, in 2019 Alibaba increased its sales by 25.7%, up to 38,400 M$, with the average growth in the last 3 years standing at 30.7%.
Good figures are expected on the one hand because China has overcome the confinement phase. But also because we think that precisely the confinement experience has accelerated the shift of physical purchases to online.
There is a reactivation in economic growth in China with an increase in GDP of 4.9% in Q3’20 and a significant recovery in private consumption and e-commerce (cosmetics up 19% and household appliances up 4% in 2020).
This year it is expected that 800 million consumers will buy on Singles’ Day (200 of the Generation Z- born at the end of the decade of the 90s – recently incorporated into the consumption chain). Alibaba will extend the duration of its offers (up to 4 days), include 250,000 brands (2,600 new non-Chinese brands) and organize live-streaming videos in English to stimulate international audience participation.
The day marks the start of the “holiday season” (November-December), which can account for up to 40 percent of consumer company sales this year. The National Retail Federation expects consumer spending to drop by 4.9 percent in the U.S. this season. The decline is mainly affecting travel and leisure spending. We believe that in this environment, luxury and casual/healthy lifestyle companies will suffer less from the “rewarding” trend, the increased resilience of high net worth consumers and their exposure to China.