Singles’ Day is here and e-shoppers in China will be seen binging on what is touted as the world’s busiest online shopping day. Also known as anti-Valentine's Day, the date 11.11 is special for those who are single.
E-commerce players have a tradition of enjoying a huge rally on the Singles’ Day shopping fervor. Last year, online sales hit $18 billion on Singles Day, triple the combined sales of $5.9 billion in U.S. on Black Friday, Cyber Monday and Thanksgiving. This year too is expected to be no exception, with many market researchers predicting another record level of online purchases.
While several Chinese e-commerce platforms as well as bricks and mortar retailers participate in this online shopping festival, Alibaba (BABA - Free Report) continues to dominate. The Chinese e-commerce giant, which turned this day into the biggest 24-hour spending blitz worldwide eight years ago, is expected to fetch $23 billion this year given an increase of more than 60,000 global brands across its marketplaces. The company grossed a whopping $17.8 billion in sales last year, up from $14.3 billion in 2015 (read: 5 ETFs to Ride on Alibaba's Solid Earnings & Outlook).
Global brands such as Lululemon (LULU - Free Report) , Adidas, Bose, Gap (GPS - Free Report) , Mac Cosmetics, Nike, Procter & Gamble (PG - Free Report) , Macy's (M - Free Report) and Zara are participating in the event with a presence on Alibaba's Tmall platform. With an increase in the number of brands, Alibaba will offer more than 15 million products this year. Further, it has collaborated with roughly 50 shopping malls in China to set up pop-up shops on Nov 11, in 12 cities. According to the Fung Global Retail & Technology, apparel is the most popular category followed by household supplies, footwear and foot.
China’s second-largest e-commerce firm JD.com (JD - Free Report) has teamed up with Baidu (BIDU - Free Report) , Tencent Holdings (TCEHY - Free Report) and Walmart (WMT - Free Report) to boost online traffic for Singles’ Day sales this year and bring its offerings to Hong Kong, Macau and Taiwan.
How to Play
Given this, investors seeking to tap Singles’ Day benefits in a diversified way should focus on –the following four ETFs that provide substantial exposure to the Chinese e-commerce segment.
KraneShares CSI China Internet Fund KWEB
This product provides concentrated exposure to the Chinese Internet market by tracking the CSI China Overseas Internet Index. In total, the fund holds 34 securities in its basket with Tencent, Alibaba, Baidu and JD.com taking the top four positions with a combined 37% share. The ETF has amassed $1.2 billion in its asset base and charges 72 bps in annual fees from investors. It has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: Here's Why International ETFs Continue to Outperform?).
Emerging Markets Internet & Ecommerce ETF (EMQQ - Free Report)
This ETF targets the Internet and ecommerce sectors of the developing world by tracking the Emerging Markets Internet & Ecommerce Index. Holding 45 securities in the basket, Alibaba, Tencent, Baidu and JD.com are among the top 10 firms that collectively make up for 31.6% share. The product has accumulated $345.3 million in its asset base and charges 86 bps in annual fees. It has a Zacks ETF Rank #3 with a High risk outlook (read: Emerging Markets Leading This Year: 5 Top-Performing ETFs).
Global X China Consumer ETF (CHIQ - Free Report)
This product offers exposure to the consumer sector in China by tracking the Solactive China Consumer Total Return Index. Holding 41 securities in its basket, Alibaba and JD.com make up for third and fourth spots, respectively, with nearly 5% share each. The fund has AUM of $160.1 million and charges 65 bps in annual fees. It has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
Guggenheim China Technology ETF (CQQQ - Free Report)
This fund targets the overall technology sector in China and follows the AlphaShares China Technology Index, holding 72 stocks in its basket. Tencent, Alibaba and Baidu are among the top four firms accounting for a combined 29.1% of the assets. The product manages an asset base of $363.3 million while charges 70 bps in fees per year. It has a Zacks ETF Rank #2 with a High risk outlook.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>