Could Amazon be eyeing to buy Target?
It's just a prediction, but it had the entire American press talking on Tuesday: the analyst Gene Munster, co-founder of Loup Venture, is predicting that online sales giant, Amazon, will buy Target this year.
In an article published on January 1, the influential tech analyst listed eight predictions for 2018. After discussing what he expects in 2018 including for virtual reality, Bitcoin, Apple, Tesla, electric or driverless vehicles, Google Home and artificial intelligence, Gene Munster named his prediction for Target and considered it his boldest.
“Target is the ideal offline partner for Amazon for two reasons, shared demographic and manageable but comprehensive store count,” explained Munster.
On the one hand, Amazon’s takeover of 470 Whole Foods stores last year still makes it a small player when compared to the 11,695 stores Walmart owns. Target would bring 2,300 stores to the Amazon network. On the other hand, the latter also clearly has the means, Target being valued at 41 billion dollars, and the e-commerce giant at 564 billion.
Another argument put forward is Target's alignment with Amazon's strategy.
"Target’s focus on moms is central to Amazon’s approach to win wallet share," Munster wrote. "Amazon has, over the years, aggressively pursued moms through promotions around Prime along with loading Prime Video with kid-friendly content."
The results of Amazon’s last 2017 quarter should be known before the end of February.
It is already known that the e-commerce giant passed a milestone of 5 billion packages delivered during the year.
Amazon had generated $135 billion in sales in 2016, up 27 percent. Operating income was $4.2 billion, compared to $2.2 billion reported in the prior year. Fashion is one of the company’s main sales drivers.
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