Chinese e-commerce behemoth Alibaba smashed all the previous records by transacting goods worth $14.3 billion on Singles’ Day last week. The number is massive, especially considering the slowing Chinese economy which affects domestic consumption. Alibaba’s push for this year’s Nov.11 event was to grow it into a global event. The Hangzhou-based company had inked deals with over 20,000 foreign retailers to sell products on its Taobao and Tmall platforms.
China’s economic slowdown still biggest concern
However, experts believe that an impressive 60% YoY rise in Alibaba’s Singles’ Day sales doesn’t mean a boom for China’s retail market. The biggest long-term concern for the sector remains China’s economic slowdown, reports the South China Morning Post. Alibaba shares have declined more than 7% since the Singles’ Day. Shares of JD.com fell 5% in three days through Friday.
At this year's Sohn Investment Conference, Dan Sundheim, the founder and CIO of D1 Capital Partners, spoke with John Collison, the co-founder of Stripe. Q1 2021 hedge fund letters, conferences and more D1 manages $20 billion. Of this, $10 billion is invested in fast-growing private businesses such as Stripe. Stripe is currently valued at around Read More
Billionaire hedge fund manager David Tepper’s Appaloosa Management sold off its 1.36 million shares of Alibaba, a US regulatory filing revealed on Friday. Of course, the Singles’ Day numbers were strong. But experts believe that consumers might have pulled from the prior and future months to spend on that day. About 60% of China’s 26 publicly-listed department stores reported a decline in their Q3 profits, according to data from Wind Financial.
Alibaba’s actual Singles’ Day numbers could be lower
Though department stores were affected by intensified competition from e-commerce players, they also cited “weakening macro conditions” and slowing consumer spending as main reasons. Deutsche Bank analysts Alan Hellawell recently said in a research report that “deterioration in macroeconomic conditions” was still a grave concern for Alibaba investors in the long run. The company’s failure to curb the sales of fake goods could also lead to a slowdown in user growth and activities.
Analysts have also raised doubts about the record Singles’ Day sales numbers. Alibaba’s $14.3 billion figure doesn’t take into account the sky high refund rate. Some sellers might also have fabricated orders on Nov.11 to inflate their sales numbers. The Hangzhou-based company doesn’t reveal return rate for Singles’ Day, but data from China Industry Research Network shows online shoppers returned 40% of average orders they placed on Singles’ Day in 2013.