Wal-Mart seeks “entrepreneurial spirit” as it gets more aggressive in taking on Amazon
Wal-Mart just bought Jet.com for $3.3 billion—in a sign that the world’s largest retailer is becoming more aggressive in challenging Amazon.
Jet.com was founded in 2014 by Diapers.com founder Marc Lore. Its original business model was a shopping-club format, which aimed to raise money by membership fees while selling items almost at cost. It has since shifted to a more conventional e-commerce format but with a novel pricing algorithm that decreases prices if members use a debit card, waive their right to return to the item, or order multiple items.
Lore will now head Wal-Mart’s e-commerce division as well as Jet.com, according to Recode.
Wal-Mart will continue to run both sites as distinct brands, its statement said. Jet.com currently 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.
“We’re looking for ways to lower prices, broaden our assortment, and offer the simplest, easiest shopping experience because that’s what our customers want,” said Doug McMillon, president and CEO of Wal-Mart Stores, in a statement. “It’s another jolt of entrepreneurial spirit being injected into Wal-Mart.”
The price breaks down to $3 billion in cash and $300 million in Wal-Mart shares, which will be paid over time.