Published in News

US chain stores fear Alibaba

by on02 December 2014



Call for even more protection

US chain stores are calling on their chums in Congress to kill off online retailers before they provide serious rivalry for their business models. It seems that Alliance for Main Street Fairness, which includes Best Buy, Target, JC Penney and other major chains are particularly concerned about Alibaba which it fears may "decimate" local companies unless Congress closes tax loopholes for online retailers.

In TV and radio ads over the weekend, the lobby group called on Congress to end special tax treatment for Alibaba and other online giants. U.S. retailers and industry analysts expect Alibaba to soon launch a service targeted at American consumers, armed with its IPO war chest.

There is little reason to think this. Alibaba is primarily focused on the Chinese market, from which it already gets most of its revenue. The company says increasing wealth and online penetration will ensure its home market remains the prime driver of growth in coming years.

Alibaba presently sells to American consumers through its global retail service AliExpress. But its core Taobao service, often likened to eBay's marketplace, is not yet available to US customers in English. 

What is more likely is that the big chain stores what to force Congress to tax the online stores so that their operations remain viable. The bigger chain stores manage to keep their costs down thanks to big tax discounts and state subsidies, and if the online stores are taxed, it means that they will have less problems competing.

Rate this item
(0 votes)