This year marks the 11th year of Alibaba's
In turn, Amazon
Last year, Alibaba made nearly $40 billion in sales over a 24-hour period on its self-created holiday. The company sells nearly every item in the world and its offerings even exceed that of Amazon. Like Amazon, there are business to business, business to consumer, and consumer to consumer transactions with Alibaba handling all sorts of operations in between.
Singles Day has been a phenomenon. In its inaugural year in 2009, it resulted in $7.6 million in sales. Recently, growth has come from lower and middle-class Chinese people who are beginning to spend more on online shopping in part due to a younger generation coming up and aggressive efforts by Chinese eCommerce companies to tap this market. The company has also been seeing increased sales outside of China on Singles Day.
Alibaba certainly deserves a large bulk of credit for the explosion of online shopping in China, however some of its success is simply a reflection of the size and scale of the Chinese market. Its competitor, JD.com has its own shopping festival over an 11-day period which resulted in a $19.1 billion haul last year.
When Alibaba made its debut as a public company in late-2014, there was concern about the company's unusual ownership structure, rapid growth rate, and high valuation. Since its IPO, Alibaba's stock has been relatively boring given the controversy. It opened around $80 and trades around $170 today. In comparison, the NASDAQ (QQQ) traded around 4,500 then and currently is around 8,110. It's certainly had a nice gain but largely followed the broader technology index.
Despite the trade war starting in early 2018, Alibaba's stock price has largely been flat over this time period. It's underperformed the NASDAQ but largely traded in line with other Chinese internet stocks. Although the trade war may have impacted public investors' appetite for its stock, the company continues to hit its growth metrics consistently. In the second quarter of 2018, it earned $3.39 per share and the stock's price to earnings ratio was 58. In the second quarter of 2019, Alibaba earned $5.59 per share and its price to earnings ratio was 30.40. Thus, the stock has become more profitable yet cheaper over this time period.