Singles’ Day or Double 11 is here and e-shoppers in China are binging on what is touted as the world’s busiest online shopping day. Sales on this day, are traditionally higher than U.S. Black Friday and Cyber Monday combined.
E-commerce players have a tradition of enjoying a huge rally on the Singles’ Day shopping fervor. They make quick bucks on the back of heavy discounts and promotions on everything from daily necessities to luxury items and even apartments. While several Chinese e-commerce platforms as well as U.S. brick and mortar retailers participate in this online shopping festival, Alibaba ( BABA Quick Quote BABA - Free Report) continues to dominate followed by its smaller rival JD.com ( JD Quick Quote JD - Free Report) . KraneShares CSI China Internet Fund (, KWEB Quick Quote KWEB - Free Report) First Trust Dow Jones International Internet ETF (and FDNI Quick Quote FDNI - Free Report) Emerging Markets Internet & Ecommerce ETF (, which have substantial exposure to these two e-commerce giants, are expected to benefit the most from this gala. Last year, Alibaba raked in a record $74 billion sales over the 11 days of the mega shopping event while JD.com recorded $41 billion in sales (read: EMQQ Quick Quote EMQQ - Free Report) Here's Why Internet ETFs Are Sizzling With Opportunities). The massive shopping event this year comes amid concerns over a slowing Chinese economy and continued regulatory crackdown on the tech sector. But there are indications that consumers are still willing to spend on this year’s shopping festival. In a recent survey carried out by Bain & Company on 3,000 people, more than half (52%) of the respondents said that they are planning to spend more than last year, while only 8% are planning to decrease their spending. The Singles Day event started early as Alibaba and JD.com kicked off promotions on Oct 20. This time, BABA is offering more than 100,000 new products with more than 200 luxury brands. The online blitz is an 11-day event with the best deals concentrated in two discount periods, Nov 1-3 and Nov 11. Alibaba said that the number of buyers who placed orders during the first sales window for luxury goods jumped 40% over the prior year. Other e-commerce firms are also offering huge discounts to entice buyers to spend on their platforms. eMarketer projects that Alibaba is likely to remain China's largest e-commerce player in 2021 (with an expected market share of 47%), followed by JD.com (17%). ETFs in Focus KWEB KraneShares CSI China Internet Fund provides concentrated exposure to the Chinese Internet market by tracking the CSI China Overseas Internet Index. It holds 55 securities in its basket with Alibaba and JD.com being among the top five firms with a combined 17.6% share. KWEB has amassed $8.3 billion in its asset base and charges 70 bps in annual fees from investors (read: Is the Time Ripe to Buy Beaten-Down China ETFs?). FDNI First Trust Dow Jones International Internet ETF follows the Dow Jones International Internet Index, giving investors exposure to the 40 largest and most actively traded non-U.S. international companies in the Internet industry that are engaged in Internet commerce and Internet services. Alibaba and JD.com account for a combined 14% share in the basket. FDNI has AUM of $102.2 million and charges 65 bps in fees per year. EMQQ Emerging Markets Internet & Ecommerce ETF seeks to offer investors exposure to the growth in Internet and e-commerce activities in the developing world by tracking the Emerging Markets Internet & Ecommerce Index. It holds 120 stocks in its basket with the two Chinese e-commerce giants making up for a combined 13% of the assets. EMQQ has accumulated $1.2 billion in its asset base and charges 86 bps in annual fees (read: Time to Buy China & EM Internet ETFs?). Bottom Line
Investors should note that most of these ETFs have a Zacks ETF Rank #5 (Strong Sell), underscoring the regulatory issue and slowing economy. However, the shopping festival bonanza is expected to provide some boost to these funds.