Alibaba’s Singles’ Day has been running since 2009 and became the world’s biggest shopping bonanza. Having operated for so long now, they have added securitization, a system wherein consumers will now have the chance to officially invest in the event.
Singles' Day, or Double 11, started in Nanjing in the '90s. It is originally aimed to celebrate singlehood, and eventually turned into the world’s biggest shopping event.
Ant Financial Services Group, an affiliate company under Alibaba, reportedly sold about 4 billion yuan (approximately $578 million) worth of securities last week. These are asset-backed securities funded by Chongqing Alibaba Small Loans, which will be granted to consumers on Singles' Day.
The loans were provided through an online portal called “Ant Check Later," wherein consumers are allowed to pay any purchases placed on any e-commerce website under the Alibaba Group one month after the delivery date.
The portal also allows consumers to pay in instalments for regular purchases.
There were approximately 604.8 million yuan worth of purchases made through the portal on Nov. 11, 2016.
The ABS program was already approved in June for securities which revolve into consumer loans. The manager of ABS said: “The pricing reflected a tighter liquidity condition at the time of issuance, but the deal still had the support of decent demand.”
The Shanghai Interbank Offered Rate jumped over 20bp, which forced a lot of issuers to postpone their bond deals in the past two weeks.
The cash bond market is now more open to embrace e-commerce companies with high debt ratios, thanks to the securitization format that is opened to consumers.
Ant Financial Services Group is currently awaiting approval of another investment in Tebon Securities, which is reported to be aimed at holding about 75 percent stake in the brokerage.