Walmart Buys Jet.com For $3B, Gets Serious With Amazon Competition

Walmart is reportedly paying $3 billion to acquire Jet.com, the fast-growing online retail site that was expected to give Amazon.com a run for its money, literally. This is the clearest example of how serious the retail chain giant is at capturing the segment of younger shoppers, which have been flocking towards the online merchant site in increasing numbers.

Walmart has its own online shop, but it has proven no match against Amazon’s monumental sphere of influence, Firstpost notes. The acquisition of Jet.com is just the latest in the recent startup shopping spree by Walmart, with 15 other online companies already under its belt.

The idea is simple; Amazon is the target to beat, and the world’s biggest traditional retail chain is going to do it by investing in as many resources as possible.

So, why Jet? As the company launched a year ago, the online retail site has shown phenomenal growth that attracted major investors in the form of Accel, NEA, and Goldman Sachs. Jet was marketed as an Amazon-killer and this aggressive push at expansion has certainly given the company significant credibility.

According to Tech Crunch’s sources, the deal was sealed Friday last week, and the announcement should be released sometime soon. This would then signal the biggest shift in momentum for Walmart, which is facing increasing pressure from Amazon’s exponential growth.

On that note, there are also concerns regarding the methods used by Jet in order to reach the kind of explosive expansion that made it such an attractive prospect for Walmart. A report by Recode placed the marketing expenses by the company at $20 to $25 million just to keep expanding.

This has placed enormous pressure on founder Marc Lore who even expressed concerns regarding how tough it had become to raise funds for Jet. In fact, public statements from the online retailer even suggested that profitability might not be achieved until 2020 at best.