Wal-Mart Acquires Jet.com in $3.3B Deal
Wal-Mart will acquire e-commerce startup Jet.com in a $3 billion cash deal. The move is expected to help Wal-Mart, the world's largest retailer become a powerhouse online shopping destination. The $3.3 billion price tag represents the most ever paid for an e-commerce company. Wal-Mart said it expects to receive regulatory approval for the deal, which is expected to close this year. Wal-Mart plans to tap Jet.com's online ordering capabilities to grow its e-commerce business at a faster rate and reach more customers, particularly millennials.
Total Retail's Take: The partnership, rumors of which surfaced last week, will strengthen Wal-Mart in its ongoing battle with Amazon.com for online shoppers. Jet, which launched to much fanfare a little more than a year ago, sells everything from household goods and groceries to electronics and furniture. Its low price value proposition would seem to align well with Wal-Mart's "everyday low price" strategy. In addition, Wal-Mart will gain the creative brain power of Marc Lore, who founded Jet. Lore will join Wal-Mart to run e-commerce for both companies. He figures to bring innovation and an entrepreneurial approach that Wal-Mart is in need of. While the acquisition will definitely boost Wal-Mart's cachet as an online retailer, it will be interesting to see if it will help the retailer come closer to unseating Amazon for e-commerce dominance.