Share this page with your friends:

Print

Please note: The Frank Talk articles listed below contain historical material. The data provided was current at the time of publication. For current information regarding any of the funds mentioned in these presentations, please visit the appropriate fund performance page.

The Holiday that Jack Ma Built

November 13, 2014

Rock star retailer: Jack Ma's Alibaba generated more online revenue during Singles Day than Black Friday and Cyber Monday combined

One hour into the Singles Day sale, Jack Ma’s Alibaba had already sold $2 billion worth of merchandise. By the end of the 24-hour promotion, the Chinese retailer had exceeded expectations by generating more than $9 billion, a record.

Let that sink in for a moment. Nine. Billion. Dollars. In a single 24-hour period.

That’s more than the combined online revenue from last year’s Black Friday and Cyber Monday, the top two shopping holidays here in the U.S.

Alibaba also broke the Guinness World Record for both the highest e-commerce sales and the most cell phones sold online within a one-day period.

When you compare the company’s Singles Day haul to that of Cyber Monday, which follows Thanksgiving weekend, the results are startling.

Will the Sectors that Lagged in January Outperform the Rest of 2014?
click to enlarge

The data also illuminates the urbanization and changing spending habits of China. In a country of 1.35 billion people, about half have Internet access; of those, about half shop online, more than 300 million. Because of the one-child policy, China’s gender ratio has tilted decidedly male in recent years—so much so that by 2020, the country is expected to have 35 million more men than women.

That’s a lot of single guys.

It was for these men (and women) that Singles Day was first conceived.

From 1111 to $$$$

Legend has it that four such men attending Nanjing University in the early 1990s came up with the idea of celebrating bachelorhood. There was no special day for singles as there was for lovers and spouses. They settled on November 11, or 11.11, allegedly to emphasize the date’s composition of ones and because in Mandarin Chinese, “one” sounds like “single.”

According to Xian Liang, portfolio manager of our China Region Fund (USCOX), “11-11” also looks like “bare branches,” which is a common nickname for bachelors. The reason for this is because “human” is written thus, with two halves:

It was here at Nanjing University that four students in the early 1990s allegedly conceived of Singles Day, also known as Bachelors' Day and Double Eleven Day

Whereas “husband” typically looks like this:

It was here at Nanjing University that four students in the early 1990s allegedly conceived of Singles Day, also known as Bachelors' Day and Double Eleven Day

It was here at Nanjing University that four students in the early 1990s allegedly conceived of Singles Day, also known as Bachelors' Day and Double Eleven Day

So if you stay unmarried, you basically look like a set of bare branches.

Over the years the festival became more popular among the Chinese youth who even adopted fun traditions like eating youtiao—basically donuts that resemble the number one—for breakfast.  Young women were soon invited to participate. And most important of all, people were encouraged to buy gifts for their lonely-hearted friends.

What started off as a tongue-in-cheek festival for randy young men was quickly evolving into a real, monetizable event.

Chinese retailers had already been clamoring for such a holiday in November, historically a dry period for sales. As demand for apparel, jewelry, handheld electronics and other discretionary goods ramped up, they realized that Singles Day, also called Bachelors’ Day and Double 11 Day, was a perfect fit.

Enter Alibaba

Jack Ma might not have been the first to call the promotion “Double 11,” but he was certainly the first to secure exclusive rights to use the expression on his e-commerce sites. As a result, Taobao.com and Tmall.com, both subsidiaries of Alibaba, became the de facto sales destinations for all things Singles Day.

Between 2009 and 2013, Double 11 sales rose a meteoric 5,740 percent, and this year, Alibaba amassed a fortune that exceeds the combined GDPs of several third-world countries. Consumers from over 217 countries made transactions on Tmall before midnight.

Only one hour into Singles Day sale, Alibaba had sold $2 billion worth of merchandise.

Indeed, we’re seeing a new tectonic shift in the online marketplace ecosystem and payment service industry. This shift is led not by eBay or Amazon.com so much as it is by Alibaba and other Asian e-commerce merchants. It will be interesting to see what Alibaba has in store for next Singles Day. Those 300 million online shoppers will soon become 400 million, then half a billion.

Understandably so, many American retailers want a slice of Jack Ma’s Christmas pie. Conventional wisdom might say that because we already have Black Friday and Cyber Monday within the same 30-day period, there’s neither demand nor room for a third sales event. But of the 217 countries that placed orders on November 11, Hong Kong, the U.S. and Russia ranked as the top three regions in terms of volume. Clearly the demand and opportunity is there. Alibaba’s success shows that its business model is attractive not just to Chinese but also global consumers. This is where the money wants to be.

And not just on Singles Day, but every single day.

Please consider carefully a fund’s investment objectives, risks, charges and expenses.   For this and other important information, obtain a fund prospectus by visiting www.usfunds.com or by calling 1-800-US-FUNDS (1-800-873-8637).   Read it carefully before investing.  Distributed by U.S. Global Brokerage, Inc.

Past performance does not guarantee future results. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk. By investing in a specific geographic region, a regional fund’s returns and share price may be more volatile than those of a less concentrated portfolio.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings in the China Region Fund as a percentage of net assets as of 9/30/2014: Alibaba Group Holding, Ltd. 0.42%, Amazon.com, Inc. 0.00%, eBay, Inc. 0.00%.

Net Asset Value
as of 12/13/2017

Global Resources Fund PSPFX $5.93 0.07 Gold and Precious Metals Fund USERX $7.33 0.21 World Precious Minerals Fund UNWPX $5.64 0.13 China Region Fund USCOX $11.28 0.11 Emerging Europe Fund EUROX $7.04 0.01 All American Equity Fund GBTFX $24.61 0.05 Holmes Macro Trends Fund MEGAX $22.05 0.08 Near-Term Tax Free Fund NEARX $2.21 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change