Walmart To Buy Jet.com

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What's going on?

Walmart, Americas largest traditional retailer, has agreed to buy e-commerce startup Jet.com for about $3 billion – its the largest e-commerce acquisition ever!

What does this mean?

Walmart has been investing a huge amount of money in building out its online capabilities, but it only has about 15% of the online sales that Amazon has. Jet.coms CEO will join Walmart as head of its US online business and Jet.coms e-commerce and delivery experience should be helpful to Walmart although its not clear how much the acquisition will actually help in Walmarts fight against Amazon.

Why should I care?

For the stock: Amazon is winning the war but its far from over.

With its Prime membership and its extremely valuable delivery expertise, Amazon has built a remarkable e-retailing franchise. But its not totally unassailable and, of all its competitors, Walmart may be best placed to give it a run for its money. Walmart already has a large customer base as well as the cash to improve its delivery network and market its online offering. With the right leadership and execution, a Walmart delivery service could be as ubiquitous as one from Amazon.



The bigger picture: Online sales become even more important when one considers the burgeoning Internet of Things.

For example, a connected kitchen will notice when you run out of kitchen roll or aluminum foil and order it automatically from a company like Amazon or Walmart. The idea extends to all sorts of household goods and, even, groceries like milk and cereal. Its easy to imagine a world where you might never have to make a shopping list againwhich makes this a lucrative space for businesses.

Originally posted as part of the Finimize daily email.

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