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Walmart is itself a world’s largest brick-and-mortar retailer and a fastest growing online marketplace. It is not at all surprising that it has 11,527 stores in 28 countries which include famous brands like Sam’s club and other 63 banners. Having posted $482 billion revenue in fiscal 2016, Walmart serves around 260 million customers each week and has employed 2.3 million people!!! It has been known from sources that last week, Walmart has announced to acquire 2 year old e-commerce company jet.com for $3 billion cash as well as upto $300 million shares which belong to the founders and others at the company. This was the major step taken by Walmart to stay competitive against Amazon which has become the most popular online marketplace these days. In 2015, there were 1.46 billion digital buyers all over the world. In 2019, it has been estimated to increase upto 2 billion. Thus, e-commerce world is going to be highly competitive day by day. This deal had become a necessity for Walmart because it wanted to fulfill a giant gap between its annual sales which is $14 billion – just a fraction of what Amazon is making - $99 billion. But, will this strategy of buying a startup e-commerce store like jet.com would prove to be successful for Walmart?
Below mentioned are some facts which state that the chances of successful outcome are next to impossible.
Now Marc Lore would be managing Walmart.com as well as Jet.com and probably reporting to Doug McMillon. The reason of getting Walmart attracted towards Jet.com was its Marketplace Management System. It provides higher discounts on higher purchase by the customer and at the same time, a merchant can accept the order only if the deal has been profitable. So, now future can only decide whether the deal of Walmart acquiring strong leadership of Jet.com proves to be profitable or not.
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May 2019
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