Amazon, a controversial but world-famous e-commerce giant, suffered $5bn off its stock market valuation after U.S. President Donald Trump unleashed another attack through Twitter on August 16 against the business, saying that “towns, cities and states throughout the U.S. are being hurt-many jobs are being lost!”
Trump has repeatedly accused the business of evading its “Internet taxes” even before this latest attack.
Recently, South Carolina claimed that Amazon owed the state an amount of $12.5 million in taxes, interest, and penalties in the first quarter of last year alone. According to a published report, Amazon declared, as a response, that the sellers should be collecting sales taxes themselves.
Apart from this, the Seattle-based company has been observed to give the retail industry much pressure and headache as it evidently has the advantage against businesses that rely on physical shops. This leads to Amazon being the receiver of blames from traditional retailers and other entities outside the e-commerce industry.
Amazon Dominates but not Without Repercussions
These days, Amazon has been exerting tremendous efforts on expanding its private label businesses, which have been seeing generally favorable results. AmazonBasics, which is one of the business’ private label lines, was the top performer among other labels. Other label lines, such as its private label electronics line (Echo, Fire TV, and Kindle, among others), have been closely tailing AmazonBasics. There has also been a report which states that Amazon is planning to dive into the fashion world, accompanied by the aggressive growths seen in its own-label clothing lines.
Amazon recently held its annual Prime Day in July and offered significantly lowered prices on a big number of goods. This event has been recognized as one of the contributing factors to the bolstering of U.S. retail sales last month. The upturn suggests that Internet shopping fueled around 0.6% gain in the said retail sales surge.
However, as mentioned above, there have also been repercussions rooting from the company’s success.
Last Tuesday, Dick’s Sporting Goods chief executive officer Edward Stack stated that there is an on-going price war in the retail industry. The executive also described the retail industry as being in “panic mode,” and attributed this state of panic in part to the presence and domination of the e-commerce firm.
Moreover, Amazon has sealed a deal with Nike, another international corporation which specializes in footwear and other sports goods, allowing the latter to sell its merchandise through the former.
“What they’ll do ultimately — we’ll deal with that when it happens,” Dick’s CEO told analysts and investors.
Amazon recently announced its plans to acquire the American supermarket chain Whole Foods Market in a $13.7 billion deal that it aims to finish before this year ends.
The acquisition means a more advantageous situation for the e-commerce giant since the deal will give it more physical presence, which probably will be used as local distribution centers.
In contrast to the majority of sentiments by physical shop retailers, other CEOs take this as a good opportunity, while others stated that the said tie-up may not be a total bad news. Kimco Realty CEO Connor Flyn, and Dish Network CEO Charles William Ergen are among those who gave a generally positive outlook on the said acquisition.
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