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Alibaba Singles’ Day Set to Challenge $31 Billion Record

Alibaba Group Holding Ltd.’s Singles’ Day shopping bonanza got off to a scorching start, logging more than 114 billion yuan ($16.3 billion) of purchases in less than 90 minutes, the equivalent of more than half of last year’s record haul for the 24-hour event.

An estimated half-billion shoppers from China to Russia and Argentina are expected to swarm the e-commerce giant’s sites to scoop up everything from iPhones and refrigerators to cashew nuts. The company again hosted a televised entertainment revue in Shanghai to run alongside the bargain-hunting, this time enlisting Taylor Swift and Asian pop icon G.E.M. to try and pump up sales.

The world’s largest shopping event has become an annual ritual for Asia’s largest company, a 24-hour marathon that’s part showcase of commercialism and part publicity blitz. Also referred to as “Double 11” because it falls on Nov. 11, it will be closely watched by investors keen to gauge how willing Chinese consumers are to spend as economic growth threatens to slip below 6%.

Tensions between Washington and Beijing continue to fuel uncertainty and roil business. Among China’s largest corporations, Alibaba is expected to better ride out the storm, thanks to booming online consumption in the world’s No. 2 economy.

“Alibaba will probably be the one that will be able to circumvent and come out from the trade war in better shape” versus Baidu Inc. and Tencent Holdings Ltd., Richard Wong, head of ICT for the Asia Pacific at Frost & Sullivan, told Bloomberg Television. “The current sentiment and confidence in terms of spending is still relatively high.”

Read more: How Singles’ Day Became Biggest Shopping Spree Ever: QuickTake

While Alibaba and its rivals routinely trumpet record sums in the aftermath of their events, it’s unclear how much Nov. 11 sales actually contribute to the bottom line given the enormous discounting involved.

Singles’ Day emerged as a uniquely Chinese antidote to the sentimentality surrounding Valentine’s Day. Emerging on college campuses across the country, it takes its name from the way the date is written numerically as 11/11, which resembles “bare branches,” a local expression for the unattached.

It’s now become an excuse for people to splurge. Last year, sales at Alibaba climbed 27% to 213.5 billion yuan, or the equivalent to $30.7 billion at the time. More merchandise is sold online over the 24-hour period than during the five-day U.S. holiday buying spree that begins on Thanksgiving and ends on Cyber Monday.

Online Shopping
Alibaba’s Nov. 11 sales have surpassed the busiest U.S. online spree
But the company’s facing stiff competition this year as smaller platforms including Inc. and Pinduoduo Inc. — the aggressively expanding upstart that’s now encroaching on the market leaders’ turf. They’re vying for the wallets of Chinese shoppers, particularly in the relatively untapped rural areas. All employ heavy discounting and hard-sell tactics in the run-up to and during the 24 hours in a bid to best the previous year’s record.

“Overall, we think this year will likely see a more competitive Double 11 period,” Ella Ji, an analyst at China Renaissance Holdings Ltd., said in a report. “We anticipate each platform will spend more on subsidies.”

Daniel Zhang, who took over as Alibaba chairman from billionaire Jack Ma in September, pioneered the show in its present form in 2015. The Singles’ Day impresario passes the baton this year to Jiang Fan, president of e-commerce marketplaces Taobao and Tmall, and a potential successor to Zhang himself.

“Over the years, we’ve seen consumers become more diverse and younger. Each generation of consumers needs their own peers to serve them,” Zhang said in a post on Alibaba’s blog. “I think this young team is the future.”

The 2019 edition already comes with slight twists to the formula. Alibaba, stung by criticism it harmed the environment by shipping an estimated 1 billion packages in a single day — has enjoined its logistics arm Cainiao to set up recycling centers at 75,000 locations. It says it will also work with courier companies to pick up used boxes and wrapping.

Other aspects remain the same. Singles’ Day has always been an opportunity for Alibaba to test the limits of its cloud computing, delivery and payments systems. Leaving little to chance, Alibaba sent teams across the nation ahead of Nov. 11 to help myriad outlets prepare for the festival. Some 200,000 brands are expected to participate.

“There’s nothing to suggest this won’t be another record year for Singles’ Day, especially since it opens up not only in China but Asia,” said Patrick Winter, managing partner at Ernst & Young LLP.


Alibaba Singles’ Day sales hit $23 billion in first nine hours

Chinese e-commerce giant Alibaba on Monday said sales for its annual Singles’ Day shopping blitz hit 158.31 billion yuan ($22.63 billion) in its first nine hours, up 25% from 126.72 billion yuan at the same point last year.

Akin to Black Friday and Cyber Monday in the United States, Singles’ Day has been promoted as a shopping fest by Alibaba Chairman and Chief Executive Daniel Zhang since 2009, growing rapidly to become the world’s biggest online sales event.

Also known as “Double Eleven”, the festival’s name originates from the calendar date Nov. 11, with the four ones of 11/11 signifying being single.

For an interactive graphic on the event, click here

Alibaba netted sales worth $30 billion on its platforms on Singles’ Day last year, dwarfing the $7.9 billion U.S. online sales for Cyber Monday. Yet the 27% sales growth was the lowest in the event’s 10-year history, spurring a search for fresh ideas.

Citic Securities, in a Nov. 9 research note, forecast Singles Day sales to grow 20-25% this year, held back partly by slowing overall e-commerce growth in China.

The Chinese retail juggernaut, with a market value of $486 billion, kicked off this year’s 24-hour shopping fest with performances by American pop star Taylor Swift and local celebrities such as Jackson Yee.

Sales hit $1 billion in the first minute and eight seconds and reached 84 billion yuan in the first hour, up 22% from last year’s early haul of 69 billion yuan.

Singles’ Day was among the top trending topics on China’s Twitter-like Weibo microblogging platform on Monday morning, with users discussing what they spent their money on.

Alibaba has said it expects over 500 million users to participate in the shopping festival this year, about 100 million more than last year.

This is the first time Alibaba’s Singles’ Day does not have flamboyant co-founder Jack Ma at its helm, after he resigned in September as chairman to “start a new life”.

It also comes at a crucial time for the company, which is looking to raise up to $15 billion via a share sale in Hong Kong this month.

Alibaba continues to dominate the online shopping industry, but not without competition.

In addition to longtime rival, it also faces competition from Pinduoduo, which surged in popularity in 2017 by targeting consumers in China’s lower-tier cities.


It’s Time to Bet on a Big Bounce for Shopify Stock

Shopify Inc (NYSE:SHOP) is moving 2% higher to trade at $291.50 this afternoon, reversing course off its recent trend lower on the charts. SHOP has struggled to make gains since dropping from its Aug. 27 record high of $409.55, most recently when it surprised Wall Street with a third-quarter loss late last month. However, the equity remains 110% higher year-to-date, and history suggests more gains may be in Shopify’s stock near future.

According to Schaeffer’s Senior Quantitative Analyst Rocky White, the security is trading within one standard deviation of its 10-month moving average, after spending a notable amount of time above this trendline over the past 20 weeks. Similar tests of support have occurred four times since 2016, resulting in an average three-month gain of 30.4%, with 100% of the returns positive. A similar surge from current levels would put SHOP above $380 by early 2020.

Monthly SHOP with 10MA
Monthly SHOP with 10MA

In the options pits, Shopify stock’s 10-day call/put volume ratio across the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) comes in at 1.15 and ranks in the 62nd annual percentile. This shows a stronger-than-usual demand for long calls relative to puts in recent weeks.

Near-term options are attractively priced at the moment on the online retailer, too. The stock’s Schaeffer’s Volatility Index (SVI) of 48% sits in just the 28th percentile of its annual range, meaning now is an opportune time to speculate on SHOP short-term trajectory with options.


3 Reasons Investors Should Dump Shopify After Its Q3 Results

Shopify (NYSE:SHOP) recently released its third-quarter results, and while the company again achieved strong year-over-year sales growth, that doesn’t mean all is well for this tech stock. There are three reasons why investors may want to consider selling shares of Shopify after a quarter that was really much of the same for the company.

Sales growth is down again, and it’s not likely to get stronger any time soon
In the report, Shopify revenue was up 45% year over year. That figure may be impressive on the surface, but it also marks an ongoing decline in the company’s growth. In the second quarter, Shopify’s growth rate was 48%, and at the beginning of the year, it was 50%. This is part of a trend that’s been going on for some time now, and it’s likely that deceleration will only continue. In fact, management’s guidance for the quarter has revenue coming in between $472 million and $482 million — at the middle of that range, growth would be below 39%.

For one, the company has already rapidly scaled its business and finding new avenues to expand into will be challenging. While its move into fulfillment will certainly help open up more opportunities, that’s not something that can be developed overnight. And if the recession everyone fears sets in, there could be a slowdown in the number of merchants in need of Shopify’s services.

There’s also the risk that Shopify simply starts losing market share. One of the biggest concerns investors should have about the company’s future is its lack of a moat. And with Adobe’s Magento and Facebook’s Instagram both offering similar services for merchants, enabling them to sell their products online, things are about to get more difficult for Shopify to grow, not easier.

Without that high growth rate, investors may find it hard to justify investing in Shopify’s stock.

Losses keep on mounting
While investors will be quick to point out that Shopify had a larger-than-normal loss this quarter because of income tax expenses of $48 million that weren’t present a year ago, the problem in its financials is evident long before getting to the bottom line. Operating losses of $35.7 million were already up 14% from the $31.4 million loss in the year-ago quarter.

And operating income is often more indicative of a company’s true performance than net income since it doesn’t include taxes or other expense items. Although Shopify’s third-quarter gross profit grew 45% from the prior year, operating expenses were also up 39%, limiting the improvement in the company’s bottom line. The company has posted loss after loss, and despite making some modest progress recently, it should be closer to breakeven by now, perhaps even profitable.

It’s a much more established company than it was just a few years ago when growth may have been sufficient to justify the losses. But with Spotify’s growth rate slowing down as well, management needs to show real improvement on the bottom line, too.


Russian e-commerce booms despite economic doldrums

MOSCOW — Photographer Galina Goryushina says that online shopping has changed her life.

“I’ve got more time for myself,” said the 30-year-old freelancer.

“I don’t have to haul heavy shopping bags. And I don’t waste money on silly knick-knacks laid out on the store shelves,” said Goryushina.

The young woman began shopping online a decade ago when she could not find clothes she liked in Russia and now makes most of her purchases online.

Russia may be a latecomer to the world of online shopping but e-commerce is experiencing explosive growth in the country despite a stagnant economy weighed down by Western sanctions.

Russia’s economic growth stood at just 0.7 percent in the first 6 months of 2019.

Over the same period, the Russian e-commerce market has expanded by 26 percent to 725 billion rubles ($11.3 billion), according to a study by Data Insight, a Russian-based research agency.

The sector is developing rapidly despite numerous logistical challenges in the world’s largest country including an often unreliable postal service.

Long distances and low population density make e-commerce an appealing — and sometimes even the only — option in Russia.

Even in affluent Moscow, where shopping malls offer a huge variety of consumer goods, many prefer to shop online to avoid the ubiquitous traffic jams.


One of Russia’s biggest online retailers, Ozon, began as an online bookstore — much like the global giant Amazon — and later expanded into other types of merchandise.

On a recent tour of Ozon’s offices in Moscow’s business district, chief executive Alexander Shulgin said the potential for growth in Russia was enormous.

“I am absolutely confident that e-commerce will be absolutely huge in Russia, it’s transformative for the country,” he said, pointing to Russia’s high internet penetration, with 95 million online users.

In the first 6 months of this year, the number of online orders went up by 44 percent reaching 191 million.

Together with Russia’s biggest e-commerce site, Wildberries, and the online pharmacy, the top trio’s business has grown by 107 percent compared to the first half of last year.

Shulgin said that online shopping offered Russians living in remote locations access to millions of products at affordable prices.

“It’s just phenomenal how e-commerce improves quality of life for people in small villages and towns,” he added.

Besides its huge size, Russia’s harsh climate is also seen as a boon for the business.

“When there is rain or snow or it’s cold outside, people prefer to shop online, so (Russia) is an ideal country,” he said.

Shulgin said the e-commerce market was fragmented and accounted for just 6 percent of total retail.

“So the opportunity for growth is huge,” he added.

In a logistics center in the town of Tver, located around 180 kilometers (111 miles) northwest of Moscow, Ozon employees are busy pushing carts around aisles as they prepare to ship goods to customers across Russia.

“The center handles over 100,000 packages a day and around 2,000 people work here on a daily basis,” said Ivan Popov, deputy logistics manager at Ozon.

In the cities, the company relies on couriers, automated pick-up lockers and drop-off locations.

To ship the packages to remote locations, Ozon has partnered up with the Russian Post.

“They have a branch in every possible location, ideal for smaller villages, they can deliver anywhere,” said Shulgin.


Ozon’s competitor Wildberries has also been growing at breakneck speed in recent years, making its founder one of the country’s richest women.

This year its founder, Tatyana Bakalchuk, a 44-year-old mother of four, became the second female billionaire in Russia, according to Forbes.

Bakalchuk, a former English teacher, founded the company in 2004, at the age of 28, in her Moscow apartment while on maternity leave.

She came up with an e-commerce business idea after trying to shop at traditional stores with a newborn.

Initially focusing on shoes and clothing, her business has now expanded into food, books, electronics and health products, offering 15,000 brands.

In March, it became the third most visited e-commerce fashion website in the world, trailing behind H&M and Macy’s, according to a study by SEMrush marketing analytics firm.

Already present in ex-Soviet Belarus, Kazakhstan, Kyrgyzstan and Armenia, Wildberries is now aiming for Central Europe and is building a logistics center in Slovakia.


Alibaba: First Hour Of Singles’ Day Rakes In $12B

China’s Alibaba rang up over $12 billion in sales in less than 90 minutes during its Singles Day shopping bonanza, Reuters reported on Sunday (Nov. 10).

The sales for the Chinese eCommerce giant were up 22 percent over last year’s Singles Day sales. Singles Day is similar to the U.S. Black Friday and Cyber Monday except it celebrates people who are single in China. It was launched in 2009 by Daniel Zhang, Alibaba’s chairman and chief executive officer (CEO).

The shopping day is also called “Double Eleven,” from calendar date Nov. 11 (1111), with the four ones referencing being single.

Alibaba — the $486 billion Chinese retailer — launched 2019’s 24-hour shopping event with a televised entertainment revue in Shanghai featuring acts like U.S. pop star Taylor Swift and local celebrity Jackson Yee.

The 2019 Singles Day marks the first year that Alibaba co-founder Jack Ma was not involved. He resigned in September as chairman.

The shopping event comes on the heels of the company’s plan to raise $15 billion via a share sale in Hong Kong this month.

More merchandise is moved on Singles Day than during the five-day U.S. holiday buying spree that begins on Thanksgiving and ends on Cyber Monday.

It is estimated that over a half-billion shoppers from China to Russia and Argentina will descend on Alibaba to buy everything from iPhones to refrigerators. In 2018, sales at Alibaba climbed 27 percent or the equivalent to $30.7 billion.

In other Alibaba news, two years after it acquired a majority stake in the firm, Alibaba plans an additional investment of roughly $3.33 billion in logistics affiliate Cainiao to increase its equity stake from 51 percent to 63 percent. The company would subscribe Cainiao shares that are newly-issued and also buy equity interest from a shareholder in the company who was not named, according to reports.

Conglomerate Fosun Group, department store owner Intime Group and other logistic companies also have Cainiao stakes. Alibaba had increased its stake from 47 percent to 51 percent in 2017 and committed to spending over 100 billion yuan to grow the logistics business over five years.


Jeff Bezos asked Michael Bloomberg months ago if he’d consider running for president

Sometime after Amazon pulled the plug on plans for a New York City headquarters in February of this year, the city’s former Mayor Michael Bloomberg received a call from a top company executive.

It wasn’t just any Amazon executive — it was Jeff Bezos, the company’s founder and CEO and the world’s richest man.

Bezos was calling with a question for his fellow billionaire and media mogul: Would Bloomberg consider entering the 2020 presidential race?

Bloomberg told Bezos no at the time, according to a person briefed on the phone conversation.

But he had a question of his own for Amazon’s CEO: Would Bezos reconsider his decision to cancel plans for an Amazon headquarters — dubbed HQ2 — in New York City?

Bezos’s response matched Bloomberg’s — he wouldn’t.

A spokesperson for Bloomberg confirmed the conversation. An Amazon spokesperson did not respond to requests for comment.

Now, months later, Bloomberg is in fact on the cusp of entering the race for the Democratic nomination as he’s watched the party’s leading moderate, former Vice President Joe Biden, struggle. On Friday, Bloomberg filed paperwork to qualify for the presidential primary in Alabama, which has the earliest deadline of any state. He has still not announced his candidacy.

It’s unclear what prompted Bezos’s call earlier this year, or what he thinks of Bloomberg’s recent inching toward the race. It’s also not known whether the discussion took place before or after Bloomberg’s March 5 announcement that he wouldn’t run for president.

Bezos, who’s been described as a libertarian, has largely stayed out of the world of big-money political donations, other than a $10 million gift with his then-wife MacKenzie to a super PAC that aims to elect military veterans to congressional office.

But it’s easy to imagine that a man worth more than $100 billion wouldn’t mind a new business-minded presidential opponent to Sens. Elizabeth Warren and Bernie Sanders. Both of those contenders for the Democratic nomination have made economic inequality centerpieces of their campaigns.

Warren has proposed a wealth tax for the uber wealthy like Bill Gates and Leon Cooperman, who each recently publicly expressed concerns about the plan. Sanders simply doesn’t think billionaires should exist and has his own wealth tax proposal.

Each of the senators are also vocal critics of Amazon on topics ranging from its treatment of warehouse workers to its growing power in retail and other industries. Warren, of course, has outlined a plan to break up Amazon, along with other tech giants.

Some believe a Bloomberg candidacy could actually boost Warren’s chances of landing the nomination by weakening Biden (who top Amazon spokesman Jay Carney once worked for when he was vice president). Others are cheering the former New York City mayor on.

As for Bezos, we still don’t know exactly what he thinks. But he was interested enough in the idea of a Bloomberg presidency to make a call.


Amazon founder Jeff Bezos interested in owning NFL team, has strong support among current owners

Multi-billionaire Jeff Bezos has interest in purchasing an NFL team and has become close with several current owners, according to league sources, and has strong support within the league to eventually join their ranks. Bezos, the Amazon mogul who also owns the Washington Post, has spend considerable time around owners, including Washington’s Dan Snyder, and is in the process of moving to Washington.

Bezos is one of the richest people on the planet and watched the last Super Bowl from commissioner Roger Goodell’s suite, sources said. Powerful owners like Jerry Jones believe he would be a great addition to the NFL, to say nothing of the ability to pay top dollar, in cash, for a franchise to his liking as they become available. There are not any teams currently on the market, though the Seattle Seahawks will be sold at some point following the death of Paul Allen last year, and there is considerable concern in the league office about the mounting lawsuits from various heirs to former Broncos owner Pat Bowlen, with that team possibly heading to the market in a few years as well.

Bezos’ move to Washington is creating a stir in that area, as is his ties to Snyder. Snyder has been trying for years to get a state-of-the-art downtown stadium built in DC, growing increasingly frustrated by the location and age of FedEx Field. Bezos moved the Washington Post to a new location after purchasing the paper, is setting up an Amazon hub in the area and some believe could aid Snyder’s pursuit of a new stadium, perhaps even with an Amazon sponsorship.

Regardless, he is someone who will be increasingly tied to potential franchise sales in the coming years, league sources said, and on a short list of those who could quickly execute a complicated transaction of that nature in short order.


Woody Allen, Amazon reach settlement in $68 million breach of contract lawsuit

Woody Allen’s battle with Amazon has ended.

The filmmaker had sued Amazon in February after the online giant ended his 2017 contract without ever releasing a completed film, “A Rainy Day in New York.” Sources previously claimed the film contained an adult-teen sex scene.

Amazon had responded that Allen, whose daughter Dylan has accused him of molesting her when she was a girl, breached the 4-movie deal by making insensitive remarks about the #MeToo movement. Allen has repeatedly denied the allegations made by his daughter.


Allen and Amazon agreed that the case should be dismissed without prejudice, according to papers filed Friday in U.S. District Court. Terms were not disclosed.

Attorney Robert Klieger told U.S. District Judge Denise Cote in April that Allen, 83, breached his contract when he made “public comments that at a minimum were insensitive to the #MeToo movement.”

Klieger said that Allen’s remarks hurt the project, which starred Timothée Chalamet, Selena Gomez, Elle Fanning, Jude Law and Rebecca Hall, and made the film too difficult to promote.


Allen did not attend the April hearing; his lawyer, John Quinn, told the judge that Amazon initially claimed it was ending the deal because of sexual abuse allegations made against Allen, not because of his incendiary remarks.

“A Rainy Day in New York” was released overseas, but not in the U.S. Allen’s career has slowed in recent years, with several actors who had appeared in his films saying they would not work with him again.


American Dream Mega Mall Opens In Mega eCommerce Era

Even with the mall under pressure due to the rise of online shopping, the American Dream’s first phase will come to life on Friday (Oct. 25) with a ceremony to celebrate the opening of its theme park if there are no last-minute hitches. The months to come will see the christening of the ski slopes, the largest indoor water park in North America, and then hundreds of restaurants as well as shops, the Financial Times reported.

Multiple attractions will make the New Jersey mall a destination. Those include a 1.5 million gallon water park, a beach kept at 87 degrees Fahrenheit year-round, a Sea Life aquarium, a regulation National Hockey League skating rink and an aviary featuring local birds, among other features. The American Dream Meadowlands mall project, first known as Xanadu, was initiated in 2003, although a lot has changed since then — including the rise in eCommerce.

Since that time, New Jersey has experienced five governors. The pastel tiles that caused one of them to call out the aesthetics of the building were replaced. Mills Corp., the original developer, dropped out as did Colony Capital, its successor. Triple Five Group then agreed to take over the project in 2011.

And in that time period, online shopping has increased. As it stands, the shopping mall is under pressure due to the rise of eCommerce, which has impacted brick-and-mortar stores. According to FT, vacancies in U.S. shopping malls reached a high of eight years in Q3 per Reis with vacancies at their worst level as of the financial crisis. And, with consumers shopping through eCommerce and department stores buckle, many malls are contending with a glut of space. “It would not appear to be the best of times to open a 3m-square-foot jumbo mall,” the report said. But Triple Five Group is clearly banking on the attractions to make the mall a destination.

In related news, northern New Jersey’s malls are aiming to find ways to differentiate themselves as American Dream arrives after serving as destinations for Big Apple shoppers for at least 50 years. Poonam Goyal, an analyst at Bloomberg Intelligence, said per a past report, “There are shopping centers that are underperforming, and I think those are the ones that need to worry.”


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