Wal-Mart (NYSE: WMT) is in discussions to buy online discount retailer Jet.com Inc., according to The Wall Street Journal’s Greg Bensinger and Sarah Nassauer.
It is still not clear how much Wal-Mart would pay for the acquisition of Jet; the Journal reports that the details of the deal haven’t been revealed but the price tag of Jet.com could run as high as $3 billion. Under the pressure of fast development of online business, Wal-Mart is growing and bolstering its e-commerce position, among which Amazon.com is its biggest competitor who are also one of the most ambitious challengers in purchasing the Jet.com.
Wal-Mart is the second-largest online sales in U.S. retailer, while its growth slowed down recently. It is reported that its online sales down to the slowest growth in a year in the latest quarter, comparing with increased 7 percent online sales in the first quarter. Wal-Mart online sales were $13.7 billion in 2015, according to research firm Internet Retailer. Wal-Mart’s digital sales account for an estimated 3 percent of its overall revenues, at roughly $13.6 billion, according to eMarketer. Wal-Mart plans to invest $1.1 billion into e-commerce this year.
Wal-Mart shares were off 0.7 percent at $72.62 in Wednesday trading.
Founded by Marc Lore and Nate Faust, Jet.com launched in 2015 and positioned itself as an Amazon competitor that was willing to double down on marketing, with a $100 million budget for advertising in its first year. Marc Lore was successfully run the Quidsi Inc., and sold to Amazon for about $550 million in 2010. For Jet.com, it has raised more than $500 million from investors, including the venture firms New Enterprose Associates and Accel Partners, mutual-fund company Fidelity Investments and Goldman Sachs Group Inc., which the valuation of the funding estimated over $1 billion. The goal was to snag 15 million paying customers by 2020.