Jet.com, launched in July 2015 under Lore, set out to reinvent the shopping cart. Walmart.com will stay focused on the company’s low price strategy and Jet.com will still provide a curated assortment of products. And, Walmart Inc.’s plan is to integrate that software into their website even though as of now Jet.com will be operating as a complete entity.
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As we said earlier this week, Walmart with Jet can probably put a dent in Amazon, but that’s likely to be all it is.
Wal-Mart launched its e-commerce site more than 15 years ago and now operates on-line sites in 11 countries.
Expected to close later this year, Walmart’s acquisition of Jet includes transfers “over time” of $3 billion in cash and $300 million in Walmart shares.
The move stands as the latest, and perhaps most significant example of Wal-Mart’s continued shift into global e-commerce – a move that further pits Wal-Mart in a head-to-head battle for global e-commerce supremacy with market leader Amazon.com (NASDAQ:AMZN).
In terms of online business, Wal-Mart was on a downward spiral for a long time. Among other things, Lore previously co-founded and led Quidsi, the parent company of e-commerce sites Diapers.com, Soap.com and Wag.com.
Last month, Wal-Mart announced that was selling its Chinese online business Yihaodian.com to the China’s second-biggest e-commerce site J.D.com in a strategic partnership that it hopes will bolster its presence in the lucrative but increasingly competitive marketplace.
Judging by the market’s initial reaction, investors may not view Wal-Mart’s Jet.com purchase favorably; the stock traded down by almost 1% on an essentially flat day for the broader market. The deal also reflects the difficulties for startups like Jet.com to make it on their own in a sphere Amazon dominates with its network of distribution hubs and the powerful asset of its Prime membership program. Jet.com has more than 400,000 new shoppers added monthly and an average of 25,000 daily processed orders.
“The impact on Amazon will be fairly benign”. Last month, the USA based retailer said it will sell its Yihaodian website to JD.com Inc, the second-largest online retailer in China.
Wal-Mart reported first quarter net income of $3.08 billion, equal to 98c per share on the common stock and net sales of $115.90 billion. Eventually, it bought him out for more than $500 million in 2010.
In its fiscal year ended in January, Walmart had online sales of $13.7 billion, a fraction of its total revenue of $482.1 billion. We’re looking for ways to lower prices, broaden our assortment and offer the simplest, easiest shopping experience because that’s what our customers want.
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The e-commerce start-up Jet.com has offered 12 million items in the first year of operation which is pretty interesting.
