Lore will now head Wal-Mart’s e-commerce division as well as Jet.com, according to Recode.
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According to Recode, Jet.com founder and CEO Marc Lore is expected to lead Walmart’s USA online business and will report directly to Walmart CEO Doug McMillon.
The acquisition, which the companies expect to close by the end of this year, expands Wal-Mart’s footprint in the e-commerce market.
Wal-Mart and Jet will maintain distinct brands, with Wal-Mart focusing on goods at low prices “every day” and Jet still providing a more “curated” assortment of products, the companies said. According to the release, Jet.com now takes in an average of 25,000 daily processed orders, has over 2,400 retailer and brand partner, and adds more than 400,000 new shoppers monthly. Acquiring Jet.com may help Walmart with online retail technology, but some people familiar with the startup say Jet.com only burns too much money without showing any distinguishing competitive advantage against rivals like Amazon.
Although Jet has been operating its site for only a little more than a year, it has already reached $1 billion in run-rate gross merchandise value, and boasts a growing customer base of urban and millennial customers.
The Walton family, the kin of the founders of Wal-Mart, holds a collective majority of the stock.
For its part, Walmart said it is counting on the acquisition to bring new ideas and expertise to the nation’s largest retailer. “Our customers will win”, MCMillon said, seeming to poke at Amazon”.
“We started Jet with the vision of creating a new shopping experience”, said Marc Lore, Jet.com’s CEO.
Wal-Mart’s online business posted its slowest growth in a year in the latest quarter.
“You have Walmart using its scale, these guys coming in under the price of Amazon”.
Accordingly, Wal-mart would buy Jet for about $3 billion in cash.
Walmart.com and Jet.com will continue to operate as separate websites with separate brands… at least for now.
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“Today, I couldn’t be more excited that we will be joining with Walmart to help fuel the realisation of that vision”.
