This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.theguardian.com/business/2016/aug/08/walmart-jet-purchase-online-retail-amazon

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
Walmart splashes $3.3bn on Jet.com in hopes of jolting online retail sales Walmart splashes $3.3bn on Jet.com in hopes of jolting online retail sales
(14 days later)
Walmart is buying Jet.com, an online retailer less than two years old, for more than $3bn (£2.3bn) as it attempts to rebuild its internet retailing strategy to try to catch up with Amazon.Walmart is buying Jet.com, an online retailer less than two years old, for more than $3bn (£2.3bn) as it attempts to rebuild its internet retailing strategy to try to catch up with Amazon.
The big box store giant, which operates more than 11,000 stores across the world, including Asda in the UK, on Monday said said the total $3.3bn purchase represented “another jolt of entrepreneurial spirit being injected into Walmart”.The big box store giant, which operates more than 11,000 stores across the world, including Asda in the UK, on Monday said said the total $3.3bn purchase represented “another jolt of entrepreneurial spirit being injected into Walmart”.
The entrepreneurial spirit comes in the form of Marc Lore, Jet’s 45-year-old founder and chief executive, who will join Walmart in a senior role as part of the deal. Lore, who started Jet in 2014 after selling his previous company to Amazon for $550m, is in line to collect as much as $825m from this deal as he still owns 25% of Jet, according to Recode.The entrepreneurial spirit comes in the form of Marc Lore, Jet’s 45-year-old founder and chief executive, who will join Walmart in a senior role as part of the deal. Lore, who started Jet in 2014 after selling his previous company to Amazon for $550m, is in line to collect as much as $825m from this deal as he still owns 25% of Jet, according to Recode.
Walmart said Lore would “infuse Walmart with fresh ideas and expertise, as well as an attractive brand with proven appeal, especially with millennials, the first generation of true digital natives”. The Arkansas-based company is expected to axe its current president of e-commerce, Neil Ashe.Walmart said Lore would “infuse Walmart with fresh ideas and expertise, as well as an attractive brand with proven appeal, especially with millennials, the first generation of true digital natives”. The Arkansas-based company is expected to axe its current president of e-commerce, Neil Ashe.
Lore, a 45-year-old serial entrepreneur from Staten Island, said: “We started Jet with the vision of creating a new shopping experience. I couldn’t be more excited that we will be joining with Walmart to help fuel the realization of that vision.”Lore, a 45-year-old serial entrepreneur from Staten Island, said: “We started Jet with the vision of creating a new shopping experience. I couldn’t be more excited that we will be joining with Walmart to help fuel the realization of that vision.”
Related: Walmart to shutter 269 stores, with most located in the US
Analysts say Walmart’s acquisition of the loss-making startup is an admittance that the retailer’s online efforts are failing to make headway. Walmart was very slow to the online shopping revolution now dominated by Amazon, and the gap between them has grown: Walmart currently has a stock market value of $230bn, compared to Amazon’s $365bn.Analysts say Walmart’s acquisition of the loss-making startup is an admittance that the retailer’s online efforts are failing to make headway. Walmart was very slow to the online shopping revolution now dominated by Amazon, and the gap between them has grown: Walmart currently has a stock market value of $230bn, compared to Amazon’s $365bn.
“I think it’s an admission that they [Walmart] never really got off to a flying start with online; they never had the growth they should have had,” said Neil Saunders, managing director of the retail analyst service Conlumino. “Walmart’s aim should have been: we are the biggest retailer in the world – we want to be the biggest online retailer in the world.“I think it’s an admission that they [Walmart] never really got off to a flying start with online; they never had the growth they should have had,” said Neil Saunders, managing director of the retail analyst service Conlumino. “Walmart’s aim should have been: we are the biggest retailer in the world – we want to be the biggest online retailer in the world.
“Instead, [online] growth has taken a lot longer to come through than they would like. Walmart is under the average growth rate of the market, so they are definitely losing [market] share online. It means in some [product categories], they are losing share overall as people stop buying some products in stores in favor of online.”“Instead, [online] growth has taken a lot longer to come through than they would like. Walmart is under the average growth rate of the market, so they are definitely losing [market] share online. It means in some [product categories], they are losing share overall as people stop buying some products in stores in favor of online.”
Walmart’s online sales came to about $14bn last year, compared with $99bn at Amazon.Walmart’s online sales came to about $14bn last year, compared with $99bn at Amazon.
Doug McMillon, Walmart’s president and CEO, said: “We believe the acquisition of Jet accelerates our progress across these priorities. Walmart.com will grow faster, the seamless shopping experience we’re pursuing will happen quicker, and we’ll enable the Jet brand to be even more successful in a shorter period of time. Our customers will win. It’s another jolt of entrepreneurial spirit being injected into Walmart.”Doug McMillon, Walmart’s president and CEO, said: “We believe the acquisition of Jet accelerates our progress across these priorities. Walmart.com will grow faster, the seamless shopping experience we’re pursuing will happen quicker, and we’ll enable the Jet brand to be even more successful in a shorter period of time. Our customers will win. It’s another jolt of entrepreneurial spirit being injected into Walmart.”
Lore started working on Jet, a direct competitor to Amazon, just weeks after leaving Jeff Bezos’s company, which he joined as part of the sale of his previous venture, Diapers.com, to Amazon for $550m in 2010.Lore started working on Jet, a direct competitor to Amazon, just weeks after leaving Jeff Bezos’s company, which he joined as part of the sale of his previous venture, Diapers.com, to Amazon for $550m in 2010.
When he started, Jet Lore told Bloomberg he had “no bad feelings toward Jeff and Amazon”, but he wanted to create a online retail challenger aimed at more price-sensitive consumers – and one that treated its staff with civility. At Jet, staff members are not required to sign non-compete agreements, and board presentations are posted online for all staff to see.When he started, Jet Lore told Bloomberg he had “no bad feelings toward Jeff and Amazon”, but he wanted to create a online retail challenger aimed at more price-sensitive consumers – and one that treated its staff with civility. At Jet, staff members are not required to sign non-compete agreements, and board presentations are posted online for all staff to see.
“What goes around comes around,” Lore said. “There’s more loyalty and trust that is built [by valuing and trusting employees].”“What goes around comes around,” Lore said. “There’s more loyalty and trust that is built [by valuing and trusting employees].”