Walmart wants to break into the online retail market with a bang. America’s largest retailer announced today the acquisition of Jet.com, an online-only shopping site that has been live for just over a year, for a reported $3 billion in cash, as well as $300 million in Walmart shares for its founder Marc Lore paid out over time.
The news comes after weeks of reports that Walmart was in talks to buy the e-commerce site, with several sources claiming the price tag would be the amount announced today.
Jet.com provides the largest brick-and-mortar retailer with a reinvigorated online sale that platform that aims to compete directly against Amazon.
“We believe the acquisition of Jet accelerates our progress across these priorities. Walmart.com will grow faster, the seamless shopping experience we’re pursuing will happen quicker, and we’ll enable the Jet brand to be even more successful in a shorter period of time. Our customers will win. It’s another jolt of entrepreneurial spirit being injected into Walmart,” Doug McMillon, president and CEO of Walmart, said in a statement.
Jet’s innovative platform offers a higher discount for each item that is selected for the cart. Walmart plans to use their ordering capabilities to grow their own e-commerce business by attracting more millennial customers.
Walmart says the potential Jet.com offers is undeniable with the site reaching $1 billion in run-rate Gross Merchandise Value (GMV) and 12 million SKUs in one year alone, as well as a customer base that is growing by 400,000 new shoppers a month. There is also a reported average of 25,000 daily processed orders both from direct sales and a network of 2,400 retailer and brand partners.
Walmart plans to maintain Jet as a separate brand, however It will be an uphill battle for Walmart in the online retail market as Amazon’s overall sales have soared above $100 billion annually.