Executive Briefings

Walmart Acquisition of Jet.com Lesson for Distributors Competing Against Amazon

In August, Walmart announced that it would acquire Jet.com for $3.3bn. The merger may put Walmart in a better position to go up against e-tailing behemoth Amazon, and possibly even strengthen the former's footing in the business-to-business e-commerce space in the future.

Justin King, senior partner with B2X Partners in Ashburn, Va., and founder of e-commerceandB2B.com, says electrical distributors should also be aware of this development and how it - and future mergers of this kind - could impact the B2B environment. For starters, he says the reasoning behind the deal itself is worth noting. "Walmart did this to bolsters its own strategy against Amazon," says King. "It was less about competing with 'everyone else,' and more about going head-to-head with the giant."

King says Walmart was probably also interested in Jet's resources and people. "Yes, there's a brand name with Jet and clearly it's a company that's made some progress and done some good things," says King, "but at the end of the day this [deal] is about getting a good team of people and e-commerce resources together—things that Walmart may not have wanted to go out and handle on its own."

King says that motivation should resonate with the electrical distributor that also lacks the resources and manpower to go up against Amazon in the B2B space. "We all know that resources are scarce and good people are hard to find," he continues. "The fact that Walmart had to go out and spend $3.3bn to get those resources definitely says something about the retailer's e-commerce strategy."

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Justin King, senior partner with B2X Partners in Ashburn, Va., and founder of e-commerceandB2B.com, says electrical distributors should also be aware of this development and how it - and future mergers of this kind - could impact the B2B environment. For starters, he says the reasoning behind the deal itself is worth noting. "Walmart did this to bolsters its own strategy against Amazon," says King. "It was less about competing with 'everyone else,' and more about going head-to-head with the giant."

King says Walmart was probably also interested in Jet's resources and people. "Yes, there's a brand name with Jet and clearly it's a company that's made some progress and done some good things," says King, "but at the end of the day this [deal] is about getting a good team of people and e-commerce resources together—things that Walmart may not have wanted to go out and handle on its own."

King says that motivation should resonate with the electrical distributor that also lacks the resources and manpower to go up against Amazon in the B2B space. "We all know that resources are scarce and good people are hard to find," he continues. "The fact that Walmart had to go out and spend $3.3bn to get those resources definitely says something about the retailer's e-commerce strategy."

Read Full Article