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Currys Acquisition Would Enable JD.com To Compete With Amazon UK

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Following the news that JD.com is in the early stages of making an offer for Currys after the retailer rejected a bid from US investment firm Elliott, leading to Currys’ share price rising by over 30% today;

Emily Salter, Lead Analyst at GlobalData, offers her view:

“Although Currys’ UK electricals market share has fallen significantly in the past 10 years, from 22.3% in 2014 to a forecast 19.1% in 2023, it remains the electricals market leader in the UK, making it an attractive acquisition proposition. The retailer has come under significant threat from Amazon, whose market share has increased by 7.7ppts to 17.2% over the same period, but Currys’ position as an omnichannel retailer and the expertise its staff offer to consumers, both instore and online, has protected its sales. GlobalData forecasts that Currys will retain its top spot in the UK electricals market in 2027, fending off competition from Amazon.

“The purchase of Currys would give JD.com access to the UK market, as well as giving it a foothold in the Nordics where Currys also operates. This geographical diversification would help protect it against a slowdown in sales in China. However, Currys has struggled to generate growth recently due to the impacts of high inflation on consumer willingness to buy big-ticket items and growth in the UK electricals market is set to be sluggish in 2024. Acquiring Currys would not bear fruit immediately, but JD.com’s ownership of it could enable it to bolster its online operations further, helping it better compete with Amazon.”

Source : GlobalData

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22 February 2024

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