When Walmart bought the online shopping site known as Jet.com in 2016 for $3 billion, it was for one purpose and one purpose only. TO COMPETE WITH AMAZON!

What is Jet.com

Jet.com is an American e-commerce company headquartered in Hoboken, New Jersey. The company was co-founded in 2014 by Marc Lore (who had previously sold Diapers.com to Amazon.com), along with Mike Hanrahan and Nate Faust.

Jet.com raised $820 million over four venture rounds from GV, Goldman Sachs, Bain Capital Ventures, Accel Partners, Alibaba Group, and Fidelity. The website was formally launched in July 2015.

In Fall 2016, it became a subsidiary of Walmart.

Why did Jet fail?

Walmart has never excelled at online shopping according to TechCrunch, and never will. Amazon on the other hand, excels at e-commerce, which is the reason why Walmart has decided to shut Jet.com down.

First quarter earnings for Walmart aren’t lying

Amazon is beating Walmart badly at the e-commerce game, and it shows. This is totally different than what Walmart had planned when it bought Jet.com in 2016.

The plan was to continue strengthening the Walmart.com brand.

Purchasing Jet.com was considered “critical to accelerating their omni strategy.” But the numbers on the first quarter earnings release, paint a totally different picture. Last year, Walmart lost about $2 billion on its online e-commerce operations according to a report from The Wall Street Journal.

Walmart has rethought its online strategy?

This has forced Walmart to rethink its strategy, by refocusing its business with its retail locations as the core. A key area where Walmart holds the edge over Amazon.

Don’t count Walmart out completely yet

Walmart has seen a huge boost in online spending. Walmart’s e-commerce business is up 74 percent.

That’s a huge increase since the first quarter earnings release in 2019. What has caused this increase in earnings is more demand for grocery pickup and delivery services. All due to the COVID-19 pandemic.

The Amazon-Killer failed miserably

Despite the big investment and great effort, Jet never took off. Walmart’s dreams of it being the Amazon-killer never came true.

Even with various reorganizations, a 2018 pivot to a focus on same-day local delivery, and spinoff personal shopping service (the also-shuttered Jetblack). Amazon has proven to be the winner when it comes to e-commerce business.

I agree with Walmart sticking to what it’s good at, and Amazon isn’t, which is brick-and-mortar retail.

Leave a Reply