Though rumors surfaced last week, it’s now official: Global retail juggernaut Wal-Mart(NYSE:WMT) is buying e-commerce start-up Jet.com.
The move stands as the latest, and perhaps most significant example of Wal-Mart’s continued shift into global e-commerce — a move that further pits Wal-Mart in a head-to-head battle for global e-commerce supremacy with market leader Amazon.com (NASDAQ:AMZN).
For its part, Wal-Mart gains two important assets as part of the purchase. The first is Jet.com’s sophisticated pricing software. The second is Jet.com’s executive team, which has what one publication described as “some of the best e-commerce operations minds in the business.” Especially when layered atop Wal-Wart’s supply-chain excellence and purchase-power scale, it doesn’t take an overly active imagination to see how both Jet and Wal-Mart stand to benefit from each other’s strengths.
Though Wal-Mart launched its eponymous Walmart.com over 15 years ago, e-commerce has always been something of a strategic backwater for the world’s most dominant brick-and-mortar chain. For context, Wal-Mart’s e-commerce sales last year — though topping $13 billion — accounted for just 3% of the company’s whopping $482 billion in revenue. What’s more, Wal-Mart’s e-commerce growth remains lower than the industry average and has decelerated in recent quarters. Clearly, the company needs some help if it ever hopes to credibly challenge Amazon’s increasingly dominant grip on the e-commerce space.
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