The country’s most dominant brick-and-mortar retailer agreed to the largest-ever acquisition of an e-commerce company: a $3.3 billion purchase of a fast-growing but money-sucking online shopping site called Jet.com.
There were no other bidders for Jet back then, but Walmart was desperate to close the huge gap between itself and Amazon, the online shopping wrecking ball. And CEO Doug McMillon had become convinced that Jet founder and CEO Marc Lore, who previously founded Diapers.com and sold it for a fortune to Amazon, was perhaps the only person who could do it.
Nearly three years later, Walmart’s stock price is up 53 percent, compared to a 38 percent increase for the S&P 500 over the same period of time.The company’s US online sales increased 40 percent last year, buoyed by a successful expansion of an online grocery business; the digital-first brands and digital-first talent it has acquired have breathed new life into its portfolio; and it has shed at least part of its reputation for being a digital dinosaur.
Walmart is, by most measures, in a more competitive position than it was before it acquired Jet.But it’s still far behind Amazon, and inside Walmart, tensions are rising. Multiple sources tell Recode that the company is projecting losses of more than $1 billion for its US e-commerce division this year, on revenue of between $21 billion and $22 billion. Walmart does not disclose these figures publicly and declined to comment.That size loss is an eye-popping figure for a company that is used to printing cash and that prides itself on its profitable operations; the overall Walmart business brought in nearly $7 billion in profits during the last fiscal year.