Walmart is shutting down Jet.com. The retailer quietly announced the move, which was spotted by TechCrunch, in its first-quarter 2020 earnings report. Walmart bought the online-only marketplace, then just over a year old, in 2016. At the time, most people thought Jet would figure prominently in Walmart’s attempts to compete against Amazon. That hasn’t been the case.
According to Walmart’s Q1 earnings release, the decision to shut down Jet.com is due to the “continued strength of the Walmart.com brand,” with the company citing the Jet acquisition in 2016 as “critical to accelerating our omni strategy.” But the numbers tell a different story: last year, Walmart lost about $2 billion on its online e-commerce operations.
The company has since seen a big boost in online spending. Walmart’s e-commerce business is up 74 percent compared to Q1 2019, with the company citing increased demand for grocery pickup and delivery services due to the COVID-19 pandemic.
But the writing has been on the wall for Jet for a while. Despite the big investment, it never really took off for Walmart as the Amazon-killer it needed to be, despite various reorganizations, a 2018 pivot to a focus on same-day local delivery, and spinoff personal shopping service.