Walmart to buy Jet.com for $3bn

Recode reports that retail megacorporation Walmart is slated to acquire Jet.com for $3 billion; the company is expected to announce the deal on Monday.

Wal-Mart’s move is aimed at boosting an e-commerce operation that, despite billions of dollars in investment in building distribution centers and expanding services, ranks fourth in online shopping with a 3% market share, compared to Amazon’s 31%.

President and CEO Doug McMillon commented, “We believe the acquisition of Jet accelerates our progress across these priorities”.

As part of the deal, Jet and Walmart will remain separate brands, allowing Walmart.com to continue its extension of the company’s retail stores while Jet.com will continue to provide its own unique customer experience. Jet.com now has “a growing customer base of urban and millennial customers”, according to Wal-Mart’s statement-with 400,000 shoppers coming on monthly and 25,000 orders processed each day.

“Wal-Mart still struggles with things like third party marketplaces which Marc and his team have successfully built”, Sucharita Mulpuru, an analyst at Forrester Research Inc., told Bloomberg.

Jet.com was founded in 2014, and various outlets were quick to call it an “Amazon-killer”.

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 $545 million.

Jet is on track to handle $1 billion in total sales this year and says it adds 400,000 new shoppers each month.

Jet.com has soared in the e-commerce space since it launched in 2015, undercutting some of Amazon’s prices.

“The job that [Lore] will ultimately end up with is different in some ways than the job we were asking Neil Ashe to do in that it’s more focused on USA e-commerce”, McMillon told reporters on the conference call.

“Today, I couldn’t be more excited that we will be joining with Walmart to help fuel the realisation of that vision”. Wal-Mart said that the combined company will “leverage innovative technology solutions from both companies to develop new offerings to help customers save time and money”.