Walmart Says It Will Discontinue Jet, Which It Acquired For $3B In 2016
In its quarterly report, Walmart revealed its discontinuation of Jet.com, an online-only marketplace that the retail giant bought for $3 billion, according to TechCrunch. Walmart’s losses in its e-commerce division were projected to be around $2 billion in 2019, according to a Wall Street Journal report. Walmart’s report stated that Jet.com’s growth failed to rise above 10 percent within its core U.S. market.
In a statement, Walmart addressed the loss by saying, “Due to continued strength of the Walmart.com brand, the company will discontinue Jet.com. The acquisition of Jet.com nearly four years ago was critical to accelerating our omni strategy.”
However, Jet.com’s failure does come as a surprise to many. As the pandemic forced millions across the globe to stay inside, online shopping saw huge growth with more and more consumers ordering both essential and entertainment goods. Even Walmart’s online store saw a 74 percent increase in sales in the quarter. For the quarter, Walmart posted a gain of $10.7 billion in revenue, an 8.6 percent increase.
Walmart stated, “The company’s net sales and operating results were significantly affected by the outbreak of COVID-19. Unprecedented demand for products across multiple categories led to strong top-line results. Certain incremental costs negatively affected operating income, including costs associated with enhanced wages and benefits as well as safety and sanitation.”
CFO Brett Biggs’ also commented on the news, saying, “The decision to withdraw guidance reflects significant uncertainty around several key external variables and their potential impact on our business and the global economy, including: the duration and intensity of the COVID- 19 health crisis globally, the length and impact of stay-at-home orders, the scale and duration of economic stimulus, employment trends and consumer confidence.”
Walmart continues to reshape its e-commerce platforms, and is currently working on introducing a 2-hour delivery service that was introduced last month.