Chinese e-commerce platform sees increasing potential in Stadium Goods, readily joins hands to take advantage of the growing market
Alibaba Group Holding Ltd. (NYSE:BABA) shares are surging 2.12% in the market currently. Not only this, its shares are rising 26% year-to-date through September 14. Compared to this, shares of rival Amazon.com, Inc. (AMZN) are surging only 12.6% YTD. Even the Dow Jones and S&P 500 index are rising 3.5% and 4%, respectively on year-to-date basis. Thus, the group’s performance is quite remarkable in the market. It is expected to further enhance on the back of its deal with Stadium Goods.
Stadium Goods founder has finally found a way to enter the Chinese market. It signed an agreement with the Chinese group’s Tmall global platform to cater to the customers located in China. The e-commerce company decided to expand its helping hand because of the eye-popping price tags carried by the sneakers line. The prices range from under $100 and go all the way up to an attractive price tag of $23,000. These sneakers of the New York-based retailer have filled up the shelves in the US and were looking to expand their footprints outside of the country before the $252.02 billion enterprise came to aid them.
To many, it may seem like a foolish idea, however, turns out a good number of people are readily available to pay huge sums of money for online store’s sneakers. This retailer is a multi-billion dollar resale market for the sneakers in the US. It carries brands that are increasingly familiar with customers rather than sneaker fans, but are extremely hard to find. Its customers include consumers who buy sneakers as part of their collections.
The Chinese platform can benefit from this as, although the US market is only worth $1 billion, the global market has a potential to be worth $6.2 billion, according to Stadium Goods CEO John McPheters. He opened the store along with his two partners in October FY15. They expanded their footprint across the borders for the first time in August, earlier this year. They took help of Tmall and launched an e-store on its platform. This was done to reach the lucrative Chinese market. Currently, the company has only made its low-price footwear accessible to the customers, for gauging their interest in the products. If it is successful, it would soon roll out the higher end products and make them available for the Chinese customers readily.
Due to this agreement with Stadium Goods, the shares of the e-commerce platform have seen a rise in the market. The analysts once again eye their steps as bullish. The analysts of FactSet Fundamentals have given Alibaba group 33 Buy, three Overweight, and five Hold ratings currently. The company has also received the average price target of $111.23, with an upside potential of about 8.62% over the last closing price stated at $102.4.