3RD QUARTER 2018
World News
PHILIPPINE RETAILING
Following the Court’s decision, in the future, states
could require e-commerce retailers to collect
sales taxes on transactions that occur within their
territories, regardless of where the retailer is
physically based.
US Supreme Court
enables states to
collect taxes on
online sales
The US Supreme Court recently ruled that
American states have the right to collect
taxes on e-commerce sales regardless
of whether the online retailer selling in
their territory has a physical presence in
the state or not.
The ruling, known as South Dakota vs. Wayfair, Inc.,
reversed a 1992 deliberation, Quill
Corp. vs. North Dakota, that exempted online
retailers by paying taxes on sales made in states in
which they do not have offices, warehouses or any
other form of physical presence.
Supporters of the Court’s decision, such as the
lobby group Retail Industry Leader Association, said
that the ruling put an end to a situation that was the
result of a preinternet era decision—the 1992 Quill
Corp. vs. North Dakota deliberation—that gave an
unfair advantage to pure-play retailers over brick-
and-mortar retailers by granting the former with a
de facto tax break.
Brick-and-mortar retailer Walmart also commented
positively on the decision, which, according to
the company, will put an end to an unfair fiscal
advantage enjoyed by pure-play retailers and will
benefit the community by generating more tax
revenues. Detractors said that the decision could
potentially have a negative impact on smaller
e-commerce retailers and would leave unaffected
e-commerce giants that have the resources to
absorb the impact.
The impact of the Supreme Court’s decision will
largely depend on how it will be implemented at the
state level. Some states might introduce a minimum
revenue threshold that should protect smaller
players, following the example of a 2016 South
Dakota law that requires e-commerce retailers that
generate sales over $100,000 annually in the state
to pay taxes.
(Coresight Research, 6/25/2018)
Starbucks teams with
Alibaba to expand
through China
Starbucks Coffee Company and Alibaba
Group Holding have partnered to create
Starbucks Delivery Kitchens for delivery
order fulfillment and personalized
online Starbucks Experience for Chinese
customers.
“Our transformational partnership with Alibaba will
reshape modern retail, and represents a significant
milestone in our efforts to exceed the expectations of
Chinese consumers,” Kevin Johnson, president and
chief executive officer, Starbucks Coffee Company,
said. “Starbucks China is one to watch, and I have
full confidence in the team that will bring the new
innovation behind the Starbucks Experience to life.”
Daniel Zhang, CEO of the Alibaba Group, said the
company is thrilled to expand its
existing partnership with Starbucks by
leveraging its “cutting-edge New Retail
infrastructure and digital power to
enable an unprecedented experience
for consumers. This partnership is
again a testament to the success of our
New Retail strategy.”
Starbucks and Ele.me collaborated
to develop a customized delivery
infrastructure, creating a tailored
order-to-delivery
Starbucks
program, according to the release. In
addition, Starbucks will partner with
Hema supermarkets to be the first
retail brand to establish dedicated
Starbucks Delivery Kitchens within their locations
that will utilize Hema’s distinct fulfillment and
delivery capabilities to complement the delivery
of handcrafted Starbucks coffee and tea beverages
offered through existing Starbucks stores.
Starbucks is expected to open the kitchens in
selected Hema supermarkets in Shanghai and
Hangzhou in September 2018, with plans to expand
its presence to other cities over time.
(Retail Customer Experience, 8/3/2018)
Zara to launch
recycled garments
program in China
Spanish garments retailer Inditex, owner
of international fashion brand Zara, is set
to pilot test its at-home pick-up service
for recycled garments in China this
September.
The initiative, which currently operates nationwide
in Spain, is a central part of the group’s strategic
commitment to the so-called ‘circular economy’.
It has enabled the collection of more than 25,000
tons of garments in 21 markets since launching in
2016. The plan was released as part of a report on
Inditex’s performance last year, announced at its
recent annual meeting. The report highlighted how
the company’s integrated store and online model
has boosted Inditex’s sustained growth.
“All of Inditex’s brands benefit from a robust
integrated store and online platform,” said Inditex
chairman and CEO Pablo Isla. “Last year, online
sales already accounted for 12% of the total in the
47 markets in which e-commerce platforms are
available, representing annual growth of 41%.”
He added that the model had enabled sustained
growth over the years, coupled with the consistent
creation of economic, social and environmental
value.
Inditex has also recently embarked on a
refurbishment drive for its entire global network
of more than 7400 stores, accompanied by
considerable growth in the Zara online platform.
The group’s earnings performance has enabled its
dividend per share to increase by 70% during the
last five years.
(Inside Retail Asia, 7/19/2018)
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