Walmart's online sales were $13.7 billion in fiscal 2015, while Amazon's sales in 2015 were $107 billion. So Walmart acquired Jet for $3b.
Adam Rifkin stashed this in Business Facts
Supporters say the acquisition should help Walmart improve its e-commerce business, which has been criticized in the past for falling so far behind Amazon.
Walmart's online sales were $13.7 billion in fiscal 2015, while Amazon's sales in 2015 were $107 billion.
The deal is also expected to give Walmart access to Jet's shoppers, who tend to be wealthier, younger, and more urban than Walmart's core customers.
But some people, like former Sears Canada CEO Mark Cohen, think the acquisition was a waste of money.
"I think they just spent $3 billion on an idea that they should have been able to create for themselves," Cohen, now the director of retail studies at Columbia Business School, said in an interview with Business Insider. "It looks and feels like a 'Hail Mary' pass. I think it is a terrible mistake."
The company, which sells household goods and groceries, offers lower prices than Amazon and free shipping on all orders over $35. By comparison, Amazon charges $99 annually for free two-day shipping as part of its Prime membership.
Jet has a unique business model — enabling customers to bundle items together or waive free-return privileges to save more money — but in Cohen's opinion, it doesn't have "any viability or any likely profitability."
"Anyone can offer prices lower than Amazon," but no one has figured out how to do as profitably as Amazon, Cohen said.