Wal-Mart is acquiring e-commerce startup Jet.com to better challenge Amazon
According to reports, the world's largest traditional retailer Wal-Mart Stores Inc. is acquiring e-commerce startup Jet.com. The acquisition underscores an evident effort by Wal-Mart to pose a more substantial challenge to online retail giant Amazon.com Inc.
So far as the financial terms of the Jet.com acquisition are concerned, Wal-Mart has revealed that it will pay approximately $3 billion in cash and $300 million in shares for the startup. A part of the mentioned amount will be paid by Wal-Mart over time.
Jet.com is an online discount marketplace which was launched in July 2015 by Internet entrepreneur Marc Lore. The startup is mostly known for its innovative pricing software which has the capability to offer lower prices to customers while they are adding items to their shopping cart.
With regard to its post-acquisition plans for Jet.com, Wal-Mart said that the startup's innovative pricing software will be integrated into the main Wal-Mart website. Jet.com itself will, however, continue to remain an independent entity.
Highlighting the fact that, with the help of Jet's software, "the customer is even more in-charge of the price that they pay," Wal-Mart CEO Doug McMillon said on a media call that Wal-Mart will gradually incorporate Jet.com's technology and design components; and added that both the brands will be grown separately in the short term.
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