How Could Singles Day Help The Biggest Company In The World?

It only took 17 minutes for Alibaba Group Holding Ltd BABA to make $1 billion USD during Singles Day 2014, an event that initially started to celebrate those who are single.

Alibaba has cleverly transformed the holiday into the Chinese version of Cyber Monday, offering massive discounts to lure millions of customers.

"It's a day that they've kind of fostered and really developed and almost created to drive e-commerce sales during what is generally a slow period for them," CRT Capital analyst Neil Doshi told Benzinga. "Last year they did [about] $5.8 billion worth of [merchandise]. It was up pretty significantly, 40 to 50 percent."

Doshi said that Alibaba hopes to expand Singles Day -- which takes place on November 11 -- outside of China. "I think it's a critically important day for Alibaba," he added.

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American Inspiration

Wedbush analyst Gil Luria thinks the Singles Day sales -- which sound like a western concept -- might have been inspired by American holidays.

"We have our Hallmark holidays -- Mother's Day, Valentine's Day, Father's Day, Graduate's Day, Executive Assistant's Day," Luria told Benzinga. "Jack Ma, who is very versed in the ways of the West, saw this opportunity that was culturally there. Singles Day is not a new phenomenon, but about six years ago he decided it was a good day to commercialize."

Ma used the phenomenon to encourage people to start shopping.

"This comes at a time when the Chinese consumer is waking up and starting to be active, so it really resonated with the Chinese consumer and started taking off and the growth has been exponential all the way through this year," Luria added. "The big breakthrough this year is that they've taken it internationally. They have western brands offering deals to Chinese consumers in a really big way for the first time."

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Protecting The Brand

Alibaba owns a trademark for the 11.11 symbol in China. When JD.com attempted to run ads to compete with Alibaba during Singles Day, Alibaba acted immediately.

"Alibaba went out to all the TV stations in China and said, 'We'll pull our ads and we're going to come after you because this is trademarked,'" said Doshi. "[Alibaba] pretty much has free reign on 11.11. I think it's a big driver of growth and a big driver of sentiment, too."

Global Potential?

If Singles Day becomes a global phenomenon, other retailers could ultimately steal Alibaba's thunder.

"It's a very compelling idea," said Luria. "It hasn't really taken off anywhere else. I'm not sure that Alibaba will be the one that brings it to the U.S. in a major way. I think if it catches on in any significant way, you'll see Amazon and eBay and big retailers in the U.S. take over."

Alibaba has high hopes for global expansion, but it has not yet become a big player outside of its home nation.

"AliExpress has a relatively small presence," Luria continued. "They do have expanding presence in countries like Russia and Brazil, and maybe they can benefit somewhat from that day there. What they've been able to trademark is the Chinese symbol around that. I doubt they'd be able to trademark Singles Day or 11.11 in the U.S. or Europe. So if it takes off, I wouldn't necessarily expect it to be Alibaba that's the big beneficiary."

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.