The retail giant said on Monday that it had acquired Jet.com for a stock and cash deal worth $3 billion. It includes about $3 billion in cash and $300 million of Wal-Mart shares, which will be paid over time.
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Walmart CEO Doug McMillon said that it hopes the acquisition will help Walmart drop prices and grow its online presence quicker. Jet said it is adding about 400,000 new shoppers monthly and processes about 25,000 orders on a daily basis.
“We started Jet with the vision of creating a new shopping experience”, Jet CEO Marc Lore said in the announcement.
“Walmart is spending furiously to fight back against Amazon’s online onslaught”, The Economist noted in June.
Jet.com’s ambitions and positioning have in some ways far outstripped what the company has actually achieved in its relatively short life as a startup – with early investor interest, it seems, largely based on the strength and vision of the founding team.
Calling the deal “another jolt of entrepreneurial spirit being injected” into the company, Wal-Mart Stores Inc.
Jet.com launched a year ago and aims to attract customers through innovative tactics, such as their “smart cart” feature, which allows consumers to save money by adding more items to their cart.
Wal-Mart to buy USA online retailer Jet.com was posted in Business of TheNews International – https://www.thenews.com.pk on August 09, 2016 and was last updated on August 09, 2016.
Walmart and Jet will still maintain their distinct brands throughout the acquisition.
Jet.com launched in July 2015 and has focused on differentiating itself through bulk buying: Customers are able to save money by adding various tagged items to their shopping carts that can be shipped more cheaply in the same box from a nearby vendor. It says it has been impressed with Jet.com’s ability to quickly scale up, reaching $1 billion in run-rate Gross Merchandise Value (GMV) and offering 12 million items in its first year.
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Analysts don’t expect Wal-Mart to catch up with Amazon but Charlie O’Shea of Moody’s told USA Today, “The key is to be number two”.
