Walmart announced the company was going to buy the successful online sales company, Jet.com, for unprecedented $3.3 billion. The organization made it official at its website with a press release posted on August 8.
The deal comprises the highest sum of money paid for an e-commerce platform to date, a reported record $3 billion in cash and $300 million in stock shares to be paid over time by the North American retail giant.
With this merger of retail powerhouses, Walmart positions itself as a competitor for rivaling services like Amazon, the undisputed kings of e-commerce in the U.S. According to the press release, the CEO of Wal-Mart Doug McMillon expressed its excitement for the deal and painted a bright outlook for the Arkansas-based sales mogul.
Jet.com: from selling diapers to full-fledged online store
Marc Lore, the CEO of Jet.com, has always been an entrepreneur focused on online platforms for his business ventures.
The earliest of Lore’s enterprises was the massively successful Diapers.com, founded in 2005 and based on convenient retail for parenting goods.
Since the concept of e-commerce platforms was still in diapers at the time, the startup was based on competitive prices and personal delivery. This business model quickly placed Diapers.com atop the ranks of prosperous retailers.
However, as soon as success knocked on Marc Lore’s door, the businessman did not stop at Diapers.com but saw the opportunity to diversify by replicating the model and expanding. Soon after that, Lore had created Soap.com, Wag.com, YoYo.com, BeautyBar.com, Casa.com and several other specialty sites grouped under a single parent company, Quidsi, Inc.
No retailer goes from startup to business tycoon without being noticed. Amazon quickly detected the threat that Quidsi’s ever-expanding empire posed to its dominant empire, so in 2010 it acquired Quidsi for over half a billion dollars. Diapers.com and Soap.com still operate as subsidiaries of Amazon today.
Walmart gears up to go against Amazon
Marc Lore seems to be tied to creating successful companies and subsequently selling them to the highest bidders. Coincidentally, those bidders have been the two most significant forces in the North American retail business.
Lore created Jet.com merely two years ago, and the site went live only a little over a year ago. Jet’s skyrocketing ascent and impact on the market was enough to be noticed by the sales giant Walmart, who had been struggling to catch up to Amazon in the online field.
Now, both companies will join forces to stand up against Amazon, who just closed a stellar second quarter along with other big names in tech including Google, Apple, and Facebook.
Walmart has yet to disclose its numbers for the second quarter, but the outlook seems bright with the news of its latest acquisition.