- Walmart has purchase e-commerce site Jet.com for about $3 billion
- The retail giant is trying to compete with Amazon.com in online sales
- Walmart dominates the market in in-store sales but falls fourth in digital
- Jet.com has seen steady growth over the last year and should continue
- Four million shoppers use Jet.com and it is predicted to make $1B a year
21:09 EST, 7 August 2016
21:31 EST, 7 August 2016
Walmart has purchased Jet.com for approximately $3 billion, an e-commerce start-up, and will announce the acquisition formally on Monday.
The retail giant is purchased Jet.com in an effort to increase its struggling online presence and compete with Amazon.com
Once finalized, the purchase will be the largest US e-commerce acquisition in history, according tot he Business Insider.
The one-year-old company is valued at the $3 billion-figure, according to the Wall Street Journal.
The acquisition could help boost the superstore’s online strategy as well as provide access to technology and supply-chain innovation.
Walmart will announce a $3 billion deal to acquire Jet.com, an e-commerce start-up, on Monday (stock image pictured)
‘Walmart’s e-commerce growth has been slow — they have had a year-over-year decline when the overall market is still growing.
‘What Walmart has been doing for their e-commerce business is not resonating with consumers,’Michelle Malison, a retail analyst with Euromonitor International, told the Los Angeles Times.
Walmart has a 13 per cent market share in US store-base retailing, dominating the competition.
However, the store ranks in fourth in e-commerce with only three per cent of the market.
‘Walmart is trying to short-circuit the learning curve’ by purchasing Jet.com, Britt Beemer, founder of America’s Research Group, told the LA Times
Walmart is struggling to maintain an online clientele and Jet.com might be a perfect pairing to help the retail giant compete with Amazon.com
‘If these guys that come in can help Walmart double their Internet sales in one or two years, whatever the acquisition costs are, are minimal in comparison to what they’ll make in profits,’ Beemer said.
Jet.com in on track to have $1 billion in sales this year with 4 million shoppers using the platform.
It also saw a 28 per cent sales increase from September to February, making it an appealing acquisition to Walmart.
By purchasing Jet.com, Walmart could ‘figure out how to reinvent the supply chain to deliver value to its customers, all while offering two-day delivery without an additional delivery fee,’ Malison said.
In order to have a real shot at being competition to Amazon, Jet.com needs more funding and the with a Walmart pairing, it might just be able to do that.
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