American retailers are scared of Chinese online giant Alibaba
The largest American trading chains urged the USA Congress to terminate the special tax regime given to Alibaba and other online retailers, reports Reuters. The Alliance for Main Street Fairness, including such retailers as Best Buy, Target, JC Penney and other largest trading chains, stated that Alibaba can destroy local competitors in the USA, if the existing tax privileges remain. “Major shopping streets of the country will never be the same,” says a TV commercial launched earlier by the Association in the USA. The Chinese Internet giant processes the volume of orders that is larger than that of Amazon and eBay put together. However the company has not reached a significant user audience in the USA so far. The reason for such an active marketing campaign against Alibaba may be a remarkable progress publicly announced earlier: during a shopping festival held on November 11 the online retailer processed the overall amount of orders equaled to $2 bln only during the first hour of sales. Furthermore, American retailers and analysts expect that in a short time Alibaba will launch special services for American customers, and the promotion of these will be funded by a sufficient amount of money raised during IPO. The Initial Public Offering of Alibaba was quite a remarkable event on the Internet market of this year. The company placed shares at the price of $68 and raised $21,8 bln – an unprecedented amount for the USA stock market. At the closing of auction on Monday, Alibaba shares cost $105,99, and the market capitalization was estimated at a value of $276,65 bln being second only to Google among Internet companies.