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Mergers and Acquisitions

What does the Jet acquisition mean for Walmart?

by Taylor Stanton - August 08, 2017

Image credit: Helloquence (via Unsplash)

The Wall Street Journal reported Tuesday that Walmart might have its eye on online retailer Jet.com. Since the deal was confirmed by both companies, Slice Intelligence looked into what this merger means for the e-commerce marketplace. Data suggests that Jet could bring new growth, particularly in CPG categories, and new buyers to Walmart's online business, giving it an edge over rival Target.com.

a Jet acquisition would make Walmart.com larger than Target.com

Target and Walmart have been neck-and-neck for the past 12 months. If Walmart were to add Jet's business, Walmart.com could overtake Target.com. The combined revenue generated by both Jet and Walmart.com would exceed Target’s by five percent. When comparing the relative market share of Walmart, Target, and Jet we see that Walmart accounts for 46 percent of the dollars shoppers spent with these merchants. Currently Jet only accounts for six percent of the revenue amongst these merchants; not surprising considering the company launched only last year.

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Jet.com brings additional CPG merchandising strength to Walmart

While both companies are strong in electronics and home & kitchen sales, Jet particularly stands out in CPG. Combined grocery and health & beauty sales accounted for over a third of Jet's revenue in the last year. In contrast, these categories only account for five percent of Walmart sales.

top_categories_jet_walmart

these companies attract different buyers

A glance at Jet's demographic composition versus Walmart's indicates that they appeal to slightly different shoppers. Walmart's buying population is predominately female, and a bit older than Jet's. Here's a quick look at the gender breakdown between Walmart and Jet buyers.

gender_jet_walmart (1)

both Jet.com and Walmart.com boast strong growth trajectories

Jet, a relative newcomer to the space, saw revenue soar at a rate of 168 percent since last August, while sales on Walmart.com remain strong; up by 30 percent in the same period.

indexed_growth_jet_walmart.jpg

For more insights about Jet.com, download in our recent white paper, authored by Slice Intelligence Principal Analyst Ken Cassar.

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