Alibaba Group Holding Ltd (BABA) Will Burn Local Businesses: U.S. Retailers

Alibaba Group Holding Ltd (NYSE:BABA)

Alibaba Group Holding Ltd (NYSE:BABA) have been a target of a weekend TV and radio ad campaign over  tax exemption for online sales. Dragging the Chinese giant online merchant into a political issue of tax loopholes is the Alliance for Main Street Fairness, a U.S. retailers group consisting of major chains such as Home Depot Inc (NYSE:HD), Best Buy Co Inc (NYSE:BBY), Target Corporation (NYSE:TGT), J C Penney Company Inc (NYSE:JCP), and thousands of smaller stores. The group’s ad, targeted at U.S. lawmakers, claims that the current tax loopholes allowing online retailers to avoid sales tax will put Alibaba Group Holding Ltd (NYSE:BABA) in a position to “decimate” local U.S. retailers, even before the Chinese online merchant has yet to establish an American presence pending the availability of an English interface of Taobao, its highly popular website.

Alibaba Group Holding Ltd (NYSE:BABA)

Alibaba Group Holding Ltd (NYSE:BABA) was quick to deny the ad’s claims, saying on Monday that it pays taxes in accordance with applicable laws in the country where it operates, including the U.S. The company further affirmed its focus on China as its primary market, noting that it gives an opportunity for U.S. companies to explore the Chinese market through its online properties. Traditionally, it has been Amazon.com, Inc. (NASDAQ:AMZN) that has been at the center of the group’s lobbying against the perceived tax loopholes. Amazon, however, has shown support for the proposed legislation to end the supposed loophole, while eBay Inc (NASDAQ:EBAY) opposes the same on grounds that it will hurt small sellers on its online platform by inevitably causing increase in prices.

Alibaba Group Holding Ltd (NYSE:BABA) is known to be larger than Amazon and Ebay combined, and analysts predicts that it will soon launch a service targeting American consumers. Having launched its IPO early in September, currently considered as the world’s largest initial public offering, it then went on to hold the phenomenal “11.11 Singles Day Shopping Spree” in November, which garnered a total of $9 billion in sales over a single day. It currently serves American online shoppers through AliExpress, its global retail unit.

This article has been written by Nonito Guntan.

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