‘Walmart’s e-commerce growth has been slow – they have had a year-over-year decline when the overall market is still growing.
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Walmart’s own online retail website, Walmart.com, was one of the biggest USA online retailers, while its online growth has slowed for nine straight quarters.
United States retail empire Walmart is expected to reveal today plans to buy Jet.com for $3bn, the largest United States e-commerce company acquisition in history. Our customers will win.
The deal is “another jolt of entrepreneurial spirit being injected into Walmart“, says Doug McMillon, Walmart Stores president and CEO.
The acquisition of the Hoboken, N.J., company is another big exit for Lore, who previously sold Quidsi, known for its Diapers.com site, to Amazon in 2010 for about 5 million. E-commerce represents just a drop in the bucket with $14 billion in annual e-commerce sales, a far cry from Amazon’s roughly $100 billion, and its growth rate has reportedly decelerated for five consecutive quarters.
It was reported last week that retail giant Walmart was considering an acquisition of would-be Amazon rival Jet.com for about billion. Some speculate the purchase is an attempt to close ranks with Amazon, which now dominates the e-commerce industry.
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Jet.com started off using a pricing strategy that offered discounts for placing larger orders and charged a $50 subscription fee. Walmart said the companies would continue to operate as separate brands, with Walmart.com offering its customary EDLP and Jet providing “a unique and differentiated customer experience with [a] curated assortment”. According to reports, Marc Lore, the founder at Jet.com, and some senior executives at the startup will now have an opportunity to earn an incentive bonus on top of their share of the deal value. Lore points out, though, that Jet will obviously benefit from Walmart’s “purchasing scale, sourcing capabilities, distribution footprint and digital assets”. Customers are encouraged to add various tagged items to their shopping carts, which can be shipped more cheaply in the same box from a nearby vendor.
