In a deal announced Monday, Walmart acquired e-commerce startup Jet.com for $3 billion in cash plus an additional $300 million in Walmart stock.
This deal is clearly part of Walmart's bid to take on Amazon, which currently brings in about $100 billion in annual e-commerce sales against Walmart's roughly $15 billion. Walmart's total revenue, we'd note, is nearly $500 billion.
But as the retail business shifts online, the acquisition of Jet.com gives Walmart not only an existing customer base to build its e-commerce business, but the technical and logistical know-how of an online-first retailer.
The urgency for Walmart to do something — anything — to make serious inroads on building out its online operations, however, is clearly outlined in this chart showing the rise of Amazon's market cap against Walmart. And while market cap isn't everything, the shift here very obviously shows that investors are betting big on the future of Amazon while mostly sitting tight on what Walmart is worth, both now and in the future.
This was publish on Business Insider which you can readHere
Amazingly, under this post on Business Insider was a comment of someone name Citizen1 who said “This is probably the dumbest thing Walmart has ever done. It reminds me of a Marissa move”.
He’s possibly talking about Marissa Mayer former CEO of Yahoo decision to acquire Blogging site Tumblr that seems to be a bad acquisition. But one thing we should note here is that Walmart is not yahoo.
And as said by Moody's lead retail analyst Charlie O'Shea “The deal gives Walmart "a definite leg-up on its competitors in the very important race to be #2 online"
"Being the site next clicked following Amazon amongst online shoppers is very important for brick-and-mortar retailers as they morph online, and Walmart is aggressively positioning itself to be that site," O'Shea wrote in a note to clients on Monday.
What we should do now is to watch over time and see how the war for the king of the future of E-commerce continues between these two giant. Whether this is a bad decision made by Walmalt will be later justified by time as things continue to move on.