Recently, WalMart announced that it had agreed to acquire U.S. e-commerce company Jet.com for $3 billion in cash and $300 million of Walmart’s shares, which will be paid over time. This large acquisition, aimed at augmenting Walmart’s e-commerce initiatives, indicates that the company is serious about giving Amazon tough competition in online retailing. The transaction is interesting in a number of ways. Walmart and Jet will continue to maintain their distinct brands and websites. Indeed, each business targets different consumer segments. More importantly, through this acquisition Walmart will be able to tap into Jet’s innovative leadership team to build its own e-commerce segment. (Read more on this below.) Walmart’s e-commerce growth is slowing  (to around 7% growth in sales for Q1 FY 17) and the company knows that “winning in e-commerce” is critical for its business. With the acquisition of Jet.com, Walmart will be able to accelerate its efforts in e-commerce with innovative techniques and will be better equipped to catch up with Amazon in the longer term.

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