In an effort to compete with Amazon, Wal-Mart will be purchasing internet retailer Jet.com
Launched in 2015, Jet.com grew quickly, and established itself as a key acquisition target for those looking to dent Amazon’s dominance of the domestic internet retailing market. The Jet.com acquisition will help Wal-Mart grow in this important sector.
As reported by CNBC, “These capabilities should help Wal-Mart grab a larger piece of the growing e-commerce pie. They’re also the best chance it has of closing the wide — and growing — gap between it and Amazon, analysts said. “
Wal-Mart already has a highly advanced distribution system that ensures products are stocked based on demand, eliminating potential inefficiencies in the system. Pairing that system with Jet.com could end up being a powerful match.
Jet.com co-founder Marc Lore to join Wal-Mart
Along with the acquisition, Jet co-founder Marc Lore will join Wal-Mart as head of the global e-commerce division. With Wal-Mart’s e-commerce growth trailing the market, there will be significant pressure on Lore to kickstart growth.
Will Wal-Mart overtake Amazon?
It’s highly unlikely Amazon will lose its dominance of the domestic internet retail space. Amazon has a massive lead – and gobbled up about 60% of digital sales growth according to Forrester.
Still, this acquisition is a good long term move for Wal-Mart.
Read more about Wal-Mart’s acquisition of Jet.com
- BLOOMBERG: http://www.bloomberg.com/news/articles/2016-08-08/jet-com-contest-winner-feels-good-after-3-3-billion-deal