Chinese consumers are flexing their muscles after a difficult start to the year. That’s good news for e-commerce giant Alibaba, which has been in hot water.
What’s happening: China’s annual Singles Day online shopping bonanza is on pace to break records despite the Covid-19 crisis. Alibaba said Wednesday morning that the sales frenzy has so far pulled in more than 372 billion yuan ($56 billion). The total includes the first 30 minutes of the event, along with an earlier three-day period that was added to boost sales.
The figure is a sign of the strength of the recovery in China, the only major economy expected to grow this year, my CNN Business colleague Sherisse Pham reports.
“China’s economy has seen a strong recovery and Chinese consumers’ purchase behaviors have already returned to pre-pandemic levels, if not higher,” Forrester analyst Xiaofeng Wang said.
For brands scrambling to recover from months of shuttered shops and consumers stuck indoors, China is a much-needed bright spot.
A survey from market research firm Oliver Wyman found that 86% of Chinese consumers are willing to spend the same as or more than what they did during Singles Day last year.
But this time around, there’s a shadow over Alibaba and its billionaire founder Jack Ma.
Remember: Last week, Chinese regulators slammed the brakes on the highly-anticipated IPO of Ant Group, Alibaba’s financial affiliate, at the very last minute. Regulators cited “major issues” that might cause Ant “not to meet the listing conditions or disclosure requirements.”
Industry watchers think Ma’s public criticism of Chinese regulators for stifling innovation may have played a role.
Public criticism of the Singles Day event may indicate that Ma is still out of favor with Beijing, casting a pall over his businesses.
See here: State-run news network CCTV recently called for “fewer tricks” by shopping platforms during the Singles Day shopping season, saying they should not cheat consumers.
Shoppers probably don’t care, so long as they get a solid deal. But tensions between the Chinese government and some of the country’s biggest tech giants are an ongoing threat.
Watch this space: Alibaba’s shares in New York are down more than 14% since Ant’s IPO was pulled. In Hong Kong, shares of Alibaba and rival JD.com each plunged more than 10% since Tuesday, putting both stocks on track for their worst week ever.
Fear has been triggered in part by signs of a crackdown out of Beijing, my CNN Business colleague Laura He reports. On Tuesday, China’s top market regulator outlined guidelines it says are intended to prevent internet monopolies.
The drafted rules signal a “much more vigorous regulatory environment,” said Jeffrey Halley, Oanda’s senior market analyst for Asia-Pacific.
The Trump campaign is waging a legal war over the 2020 presidential election results. Wall Street, on the other hand, is already moving on.
Even though President Donald Trump is promising to fight and has not conceded, there’s little doubt among investors that Joe Biden will become the 46th president of the United States on Jan. 20, my CNN Business colleague Matt Egan reports.
Trump’s flurry of lawsuits is being viewed as a sideshow, experts say. The real focus among investors, analysts and market strategists is on Pfizer’s blockbuster vaccine announcement, Biden’s agenda and cabinet, and expectations that Republicans will retain control of the US Senate despite runoff races in Georgia.
“For most investors, the perspective is that the election has been settled,” Tobias Levkovich, Citigroup’s chief US equity strategist, told CNN Business. “Providing evidence of shenanigans and irregularities is required in a court of law. And I haven’t seen any.”
He added that the probability Trump is able to overturn the result is “fairly remote at this point.”
While the Trump campaign team has sought to draw parallels to the 2000 recount that left the outcome hazy until mid-December of that year, investors aren’t buying it. They note that Trump trails by too many votes in too many states for recounts to sway the results.
“We see the likelihood that recounts and legal challenges could overturn this outcome as remote and favor looking through any resulting market volatility,” BlackRock strategists wrote in a note to clients Monday.
During a pandemic, people aren’t eager to share cars. Delivery networks, however, are more important than ever — and Lyft is paying attention.
The company, whose business has been slashed nearly in half due to the coronavirus, needs to make some changes, my CNN Business colleague Sara Ashley O’Brien reports.
The company said Tuesday that its revenue fell 48% in the third quarter compared to one year ago, to just below $500 million. Active riders dropped 44% over the same period to 12.5 million.
Like its rival Uber, Lyft is striving to achieve profitability next year. It thinks it can reach that goal “even with a slower recovery.” But Lyft clearly needs to find new ways to offset ride-sharing declines. Uber’s Eats food delivery business has been a bright spot for the company during a rough 2020, and has been growing rapidly.
The idea: Lyft executives told analysts that while the company is not interested in launching a delivery platform like Eats, it sees opportunities to help companies with transport logistics.
Retailers, restaurants and small businesses “want a partner, someone to help them move their goods from point A to point B, but one that does not step in between them and their customers,” CEO Logan Green said. “This delivery model plays to our strengths, including making full use of our existing technology.”
Investor insight: Wall Street may be on board. Shares are up 6% in premarket trading.
Disney and Tencent are among the companies due to report earnings on Thursday.
Regulators authorized AstraZeneca’s coronavirus vaccine for use in adults throughout the European Union on Friday, amid criticism the bloc is not moving fast enough to vaccinate its population.
WASHINGTON (AP) — A former FBI lawyer was sentenced to probation for altering an email that the Justice Department relied on during its surveillance of an aide to President Donald Trump during the Russia investigation.
MADISON, Wis. (AP) — Democratic Gov. Tony Evers lashed out Friday at rival Republicans who tried to repeal his statewide mask mandate, saying killing the order would be a ridiculous move comparable to abolishing speed limits.
COLUMBIA, S.C. (AP) — As some conservatives in South Carolina celebrated getting a bill that would ban almost all abortions in the state past a legislative barrier and likely becoming law, they said they are not finished trying to end all abortions.
A Moscow court on Friday put the brother and several allies of Russian opposition leader Alexei Navalny under house arrest for two months as authorities sought to stymie more protests over the jailing of the top Kremlin foe.