Yesterday, Walmart officially announced it will acquire, an online marketplace akin to Amazon, for $3 Billion as part of their efforts to boost the brand’s online transactions and challenge Amazon. Two-year-old Jet recently released financial information on the company, which peaked our interest. We cross referenced its online sales activity with this information to assess the potential acquisition and found that the online purchase activity does not line up with the reported figures. This suggests there is another revenue stream in place. We also found that there is a very strong overlap between Jet and Amazon customers, which suggests the acquisition is meant to steal away market share from Amazon. Read on for the full breakdown of our online shopping analysis.

Reported revenue versus actual purchase activity

In May 2016, reported $85 million in monthly sales with an average shopping cart value of $93, bringing the company to an annual run rate of $1 billion. May’s figures are nearly 2.5 times that of those the company reported in October 2015, which came in at $33 million, meaning experienced massive growth in just seven months. We at Jumpshot don’t tend to take things at face value, so we turned to our 100-million consumer panel to analyze actual traffic and online shopping on We found that despite the revenue information the company reported, purchase volumes and conversion rates have remained relatively stable between October 2015 and May 2016. This indicates that Jet might have additional revenue streams on top of commissions on sales, meaning its massive growth may not be attributed to purchase power but to additional factors, such as revenue from ads and partnerships.

Jumpshot online shopping analysis

Based on the average cart value of $93 reported by the company in May, our data shows the company’s actual online sales were around $33MM that month. This leaves us to assume the extra $52 million came from other sources, such as sponsored partnerships and advertising. We also looked at the figures from a conversion rate perspective and found that in order for Jet to sell $85MM in May, the platform’s conversion rate would have to be an unimaginable 12.2 percent, which is nearly double the conversion rate we found for Amazon!

After reviewing Jet’s purchase volumes and conversion rates, it became obvious Walmart wasn’t acquiring the company for power of purchase. There had to be a strong underlying reason to dish out $3 billion in cash, so we did some cross-industry detective work to get to the bottom of this.

Jet to help Walmart steal market share from Amazon

Our recent analysis of U.S Wholesale clubs revealed there is absolutely no overlap between wholesale club memberships. This makes it imperative for clubs to steal share away in order to dominate the market, but does the same apply in the Walmart-Jet acquisition scenario?

We analyzed the extent to which Jet customers shop on Amazon and Walmart in May and June to detect shopping trends and customer overlap rates. We found that an astonishing two thirds of Jet customers also shopped on Amazon, with only 12 percent overlap between Jet and Walmart customers. Even though Jet’s size is still minimal compared to Amazon, the overlap of customers compared to Walmart’s own is an opportunity to take away market share.

Bottom line: Amazon’s e-commerce dominance is forcing competitors to aggressively attempt to eat away at its market share in order to stay competitive online. This online shopping analysis shows online sales do not account for most of Jet’s reported revenue. This just might have been an old fashioned market share takeover play by Walmart, an aggressive move by an old school retail giant.