Wal-Mart buys Jet.com to lift online sales, battle Amazon
Updated: 2016-08-10 07:45
A shopper looks at ornaments at a Wal-Mart store in Los Angeles, California.[Photo/Agencies]
Wal-Mart Stores Inc, vying to better challenge Amazon.com Inc, will pay about $3 billion for internet retailer Jet.com Inc and its innovative pricing software－in the biggest-ever deal for an e-commerce startup.
The deal disclosed on Monday follows a five-year e-commerce acquisition spree in which Wal-Mart, the world's biggest traditional retailer, has already bought 15 startups, seeking the talent and technology to make it a dominant player online and narrow the massive gap with market leader Amazon.
Wal-Mart's online division has underperformed against Amazon, posting its slowest growth in a year in the first quarter as it struggled to gain traction with consumers, especially millennials.
Jet was launched by internet entrepreneur Marc Lore in July 2015 and includes software that can offer a customer lower prices as they add items to their shopping cart. Wal-Mart has said it would integrate that software into its main website while keeping Jet as a separate entity.
"One of the things we really like (about Jet) is that the customer is even more in-charge of the price that they pay", s Chief Executive Doug McMillon said.
McMillon said Wal-Mart will take time to get the technology and design components from Jet and that they will grow both brands separately in the short term.
"Over time, piece-by-piece, we will end up running a business that is simpler and not completely independent."
McMillon said Lore would run its new US e-commerce business. Lore had cofounded Quidsi Inc, the owner of sites like Diapers and Soap, which was sold to Amazon.
"Marc's e-commerce experience and success are obviously attractive," McMillon said.
Wal-Mart's current head of global e-commerce Neil Ashe will leave the company at the end of the fiscal year.
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