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Alec Hogg: Amazon now targets luxury – will Richemont investors blink?
BizNews founder Alec Hogg shares his rational perspective on Amazon, the e-commerce giant turning its focus on uncharted territory - luxury brands.
Oscar de la Renta was the only luxury brand to sign up with Amazon when it launched last month. Since then a few more have tricked in – but none of the global giants. Yet.
In a memorable chapter of his excellent book That Will Never Work, Netflix co-founder Marc Randolph writes how in mid-1998 he and Reed Hastings flew to Seattle to meet Jeff Bezos. As he was about to start selling more than books, Amazon's founder wanted to buy the fledgling Netflix, which at the time generated 90% of its revenue selling DVDs.
Randolph and co-founder Reed Hastings declined the offer. But left with something more valuable, something that led to the creation of what is now a $240bn global business: they realised Netflix would never be able to compete with Amazon. The duo duly dropped the only profitable part of the enterprise and put all their eggs into DVD rentals.
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