SHOPPING: Consumers have been a key bulwark to rising recession risks, with both labour markets and their balance sheets strong. They are running down excess savings to maintain spending. This works for now, but is not inexhaustible. It is also masking a relative shift back to physical sales from online, and to services from physical goods. Plus, however resilient the US, trends in China are dwarfing them in scale and level of online penetration. Next week’s Amazon ‘Prime Day’ is the next US retail resilience health-check but may not be enough to help suffering online and payment stocks. See @ShoppingCart, @FashionPortfolio, and @MobilePayments.
PRIME DAY: Amazon (AMZN) ‘Prime Day’ runs from July 12-13, and offers deals to its 200m+ members, paying US$15/month, in 22 countries. It also sees Walmart (WMT) and Target (TGT) offer similar deals. It stands along with Black Friday (Nov. 25) and Cyber Monday (Nov. 28) as one of the biggest retail days of the year. Though Amazon is reportedly de-emphasizing the day, it remains a key test for both online sales and broader retail sentiment and resilience. Sales are forecast at $7.8 billion, up 17%. Amazon did an estimated 55% of all US online sales last year.
CHINA LEADS: Prime Day is dwarfed by Alibaba (BABA) ‘Singles day’, on November 11 each year. Spending was US$84bn last year, and peer JD.com (JD.US) sold an additional US$54bn. Broad retail sales are now turning up after lockdown. China is over half of all global online sales, more than double US. Similarly, over half China retail sales are online vs 20% globally. Global online sales are on track for $5 trillion this year, led up by EM’s India, Indonesia, Brazil growth.
All data, figures & charts are valid as of 04/07/2022