According to David Woods of the Daily Star, the Gunners believed they were in pole position to sign the Mexico international, although the Reds' interest may prompt a bidding war.
It's noted Lozano is being considered by Liverpool and Arsenal in case Philippe Coutinho or Alexis Sanchez should leave their respective sides amid links to Barcelona and Manchester City, respectively.
ESPN's Tom Marshall believes the 22-year-old is good enough to warrant the type of interest being shown in him:
Lozano only made the move to the Eredivisie in the summer, and it hasn't taken him long to adapt to European football.