China’s Singles’ Day, that country’s equivalent of a shopping holiday that mixes Cyber Monday with a dash of anti-Valentine’s Day sentiment, arrives on Tuesday Nov. 11.
Amid expectations that single Chinese men will attempt to soothe their lonely status with ramped up online shopping, shares of Alibaba (NYSE: BABA) and the KraneShares CSI China Internet Fund (NasdaqGM: KWEB), the exchange traded fund with the largest weight to Alibaba, are rallying Monday.
KWEB is up 2.6% on volume that is already more than double the daily average while Alibaba, China’s largest e-commerce company, is higher by 2.4% on heavy volume after earlier touching a new all-time high. Alibaba has surged nearly 38% over the past month while Amazon (NasdaqGS: AMZN), one of the U.S. companies Alibaba is most often compared to, has traded lower. KWEB is up 16.5% over that period. [Alibaba ETFs Crush Amazon Counterparts]
The Singles’ Day catalyst is legitimate. Last year, Alibaba generated nearly $5.8 billion in Singles Day sales. Analysts are forecasting that number could be as high as $8 billion this year.
“If Alibaba has the same revenue growth for Singles’ Day this year that it had in the third quarter (53%), Singles’ Day revenue could be $8.7 billion. I think it will be $8.5 billion,” said Big Tree Capital’s Kevin Carter in an interview with ETF Trends.
California-based Big Tree is introducing the Emerging Markets Internet & Ecommerce Index (EMQQI) later this week. That index is designed to give investors exposure to the fast-growing emerging markets e-commerce and Internet companies that are often left out of traditional benchmarks tracking developing world equities.
Alibaba is EMQQI’s largest holding with a weight of 8%, according to issuer data.
Although Alibaba is by far the largest Chinese e-commerce company, there are plenty of other U.S.-listed companies that stand to benefit from a potential surge in Singles’ Day spending. Baidu (NasdaqGS: BIDU), China’s largest Internet search provider, JD.com (NasdaqGS: JD) and Vipshop Holdings (NYSE: VIPS) could all get a lift from increased Singles’ Day spending. [Vipshop Boosts These ETFs]