Wal-Mart has agreed to buy e-commerce startup Jet.com for about $3 billion in cash, giving the world’s largest retailer the resources for a stronger shopping website to compete with Amazon.com Inc., the online market leader.
The deal also includes $300 million in Wal-Mart shares that will be paid over time, the world’s largest retailer said Monday in a statement. Acquiring Jet.com, which achieved a $1 billion gross merchandise run rate in a little more than a year, gives Wal-Mart a website that processes an average of 25,000 orders a day and is adding 400,000 shoppers monthly.
Wal-Mart has spent billions expanding its online operation, including hiring thousands of workers, opening two offices in Silicon Valley, and building large e-commerce distribution centers. It also started an annual subscription service similar at half the price to Amazon Prime. Amazon’s $99-a-year service provides free two-day shipping on millions of items, encouraging shoppers to stay on the website, as well as the company’s video entertainment offerings.
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SOURCE: Bloomberg, David M. Levitt