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| Walmart says it will discontinues Jet |
The E-commerce giant in US, Walmart announced that they would be discontinuing an online market place which it acquired some time ago to compete with Amazon with a digitally native brand.
Walmart acquired Jet.com for 3 billion dollars in 2016 in a bid to gain online users so as to be able to show it products online.
It was announced in it quarterly reports that it would discontinue the online store but reasons for it actions were not explained in details.
The earnings report noted that revenue for the company this quarter was $134.6 billion,with an Increase in $10.7 billion in the revenue stated,or 8.6% beating the expectations,although walmart's sales and net profit has been affected since the covid-19 outbreak started in US.According to the Walmart;
"The company's net sale and operating results were significantly affected by the covid-19 outbreak.
"Unprecedented demands for products across multiple categories led to topline results,certain incremental cost negatively affected operating income,including cost associated with enhanced wages and benefits as well as safety and sanitation".
Despite the announced stoppage to the Jet.com operation,the company didn't call out a negative news on the online store it about stopping,instead it put out positive news signalling that Jet.com helped the company's acceleration in the past years.
In the statement it said;
"Due to the continued strength of Walmart.com brand the company will discontinue jet.com.
"The acquisition of Jet.com nearly four years ago for critical for accelerating our omni strategy".
The Cheif Financial Officer of the company, Brett Briggs, in a statement explained the decision for the discontinuation of the operations were as a result of the covid-19 outbreak and the impact it has on the company. The statement said;
"The decision to withdraw guidance reflects significant uncertainty around external key variables and their potential impact on our business and the global economy,including the duration and intensity of 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.
"Our business fundamentals are strong, and our financial position is excellent, customer trust us to deliver on our brand promise,and I'm confident in our ability to perform in almost any environment.while the short-term environment will be challenging,we are positioned well for long-term success in an increasing omni world".
Walmart decision to make their online store shut down might be unexpected because of the new environmental conditions which has been implemented due to the corona virus pandemic.
Because of the covid-19 outbreak many shops and businesses have shifted their operations to the online world so as to enable them get in touch with their customers online while the "stay-at-home" order is obeyed.Amongst businesses who have already shifted to the online world includes companies that sells products, companies like Amazon,E-bay,Jumia,Jiji,Ali-express, and other not so popular brands like clickbank have been working closely online to keep it customers satisfied.
So the announcement of walmart to discontinue jet.com which it acquired for 3B in 2016 in this time has made some,including it customers to wonder what the reasons might be for the shutting down of their online platform which could increase their demand and double up their wages and income.
According to the company's CEO,Doug McMillon;
"This is Walmart being more committed to winning e-commerce".
Citing that the company has good reasons for their intended plans in a conference call with it investors.
Wall Street Journal estimates that walmart's losses in it e-commerce activities were are around $2 billion.
Recently Walmart has been investing and inventing more walmart.com perks such as piloting a two hour a two hour delivery service.
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