Wal-Mart Acquires Jet.Com For $3.3 Billion To Challenge Amazon
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You could say Wal-Mart has been doing some online shopping. The world's largest retailer says it's buying the e-commerce startup jet.com for more than $3 billion and most of that in cash. NPR's Chris Arnold reports.
CHRIS ARNOLD, BYLINE: Wal-Mart sold about half a trillion dollars' worth of stuff last year, but it sold only a tiny fraction of that online - just about 3 percent. And its online sales growth has been slowing. Jet.com, by contrast, only sells products online. It was founded on the idea that even if you can't beat Amazon, trying to become the No. 2 online retailer is still a huge opportunity, and it's been growing and getting its name out there with lots of goofy TV ads.
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UNIDENTIFIED ACTOR #1: Jet.com is here. It's the biggest thing in shopping since the internet. It's even bigger than the barter system.
UNIDENTIFIED ACTOR #2: (As Character) So I'll just give you these pantaloons and...
ARNOLD: OK it may not be the biggest thing since the internet, but this would be the priciest deal to buy an e-commerce startup ever. So what will that $3.3 billion investment do for Wal-Mart?
ERIK GORDON: They're getting shoppers. Jet is getting about 400,000 new shoppers every month. So Jet is growth.
ARNOLD: Erik Gordon is a professor at the University of Michigan's business school.
GORDON: E-commerce is growing for almost everybody, and it's growing actually at about 15 percent for Amazon, growing at about half that rate for Wal-Mart. So they needed to do something, and they needed to do something big.
ARNOLD: Analysts say Wal-Mart is also buying a technology that Jet uses to price products online. Wal-Mart said in a statement the deal will also give it quote, "a jolt of entrepreneurial spirit." If the deal goes through, the company will continue to operate both jet.com and walmart.com as separate websites. Chris Arnold, NPR News.
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