Latest / Bloomberg Intelligence / SJ's Jindel on Walmart Buying Jet.com: Insulting Mistake(Audio)

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SJ's Jindel on Walmart Buying Jet.com: Insulting Mistake(Audio) · Bloomberg Intelligence

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  Speaker 1: Broadcasting live to New York, Bloomberg even to Washington, d C.
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  Speaker 1: nine to the country and around the globe the Bloomberg
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  Speaker 1: Radio Plus Appen Bloomberg Dot Gone. This is taking stock Walmart.
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  Speaker 1: Walmart has ruled brick and mortar retail, but what about
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  Speaker 1: e commerce? It has spent billions to expand its online operations.
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  Speaker 1: Walmart has hired thousands of workers, open two offices in
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  Speaker 1: Silicon Valley, and it's built a large e commerce distribution center.
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  Speaker 1: And now it's buying Jet dot Com. Will that help
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  Speaker 1: Walmart in its battle against Amazon? That's next? Right now,
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  Speaker 1: Let's go to Charlie Pellett in the Bloomberg news room
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  Speaker 1: Amazon down one tenth of one percent, of Walmart down
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  Speaker 1: To drop there of two tenths of one percent down,
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  Speaker 1: fifty two oh to a drop of four tenths of
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  Speaker 1: one percent. A lot of concern the gains will be
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  Speaker 1: We've seen some weekending and I'm survey data as well.
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  Speaker 1: making news. Thank you, Charlie from the Boomberg news room.
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  Speaker 1: I'm Raimi in aescentio. Donald Trump is focusing his economic
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  Speaker 1: I'm Ramie in Essensio. This is Bloomberg, Charlie, and we
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  Speaker 1: thank you, and again recapping Stock's lawre SMP five index
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  Speaker 1: down four to eight, a drop there of two tents
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  Speaker 1: of one percent. I'm Charlie Peloton. That's a Bloomberg business flash.
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  Speaker 1: This is taking Stock with Kathleen Hayes and Pimpox on
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  Speaker 1: Bloomberg Radio. Three point three billion dollars. Three point three
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  Speaker 1: billion dollars is the price that Walmart says it will
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  Speaker 1: pay for the e commerce startup Jet dot Com. Here
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  Speaker 1: to tell us more is strategic Jinder. He is the
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  Speaker 1: president of s J Consulting and he's got details, all right,
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  Speaker 1: So states, tell me a little bit about this deal
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  Speaker 1: from your perspective and maybe just give people a quick
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  Speaker 1: sentence about your background so they understand how you come
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  Speaker 1: to be an expert in this world of retail but
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  Speaker 1: also logistics. You know, we have worked in the space
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  Speaker 1: of transportation and logistics from the perspective of how it
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  Speaker 1: helps shippers, including retailers. UH, and we have many of
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  Speaker 1: them as our customers who are in brick and mortar
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  Speaker 1: and online retail. UH developed their distribution strategy to get
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  Speaker 1: the products either to the stores or get it into
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  Speaker 1: hands of the consumer. And there are two elements to
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  Speaker 1: e commerce success. One is having a good technology that
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  Speaker 1: helps people find that you're very use the friendly to
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  Speaker 1: buy online. But then the more expensive than the challenging
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  Speaker 1: part is getting those orders and getting them out through
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  Speaker 1: a good warehouse, distribution system and transportation network that gives
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  Speaker 1: the customers a wonderful experience in getting the right product
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  Speaker 1: on the right date, in right condition. Alright, So sate
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  Speaker 1: to the distribution systems that are used by companies like
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  Speaker 1: Walmart and Amazon, and you fill in the blank. Do
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  Speaker 1: they use one that is common or do they have
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  Speaker 1: very heterogeneous distribution systems? Are they really that different? So
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  Speaker 1: they're they're not very different in a very simple sense
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  Speaker 1: for the people are listening to this. The differences come
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  Speaker 1: in the way that the information gets received and processed
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  Speaker 1: to get into the hand of the people who are
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  Speaker 1: picking those items, and then getting it into the boxes,
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  Speaker 1: and then getting those boxes out of those buildings in
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  Speaker 1: the hands of the people who are gonna move them
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  Speaker 1: through the country, through the market or the city to
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  Speaker 1: get it in the hands of the person who has
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  Speaker 1: ordered it. Okay, that's the ordering and distribution sections. The
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  Speaker 1: technology piece that you described is that why Walmart is
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  Speaker 1: buying jet dot com. There is probably the only thing
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  Speaker 1: they could be getting from Jet dot com. And I've
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  Speaker 1: been paying attention and I even tested Jet dot com.
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  Speaker 1: Then I started getting promotional material for them. In my view,
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  Speaker 1: I am absolutely shocked that the board and the CEOs
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  Speaker 1: are falling for this. Buying Jet dot Com is Noway're
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  Speaker 1: going to help them compete with the Amazon. It is
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  Speaker 1: almost insulting to think that Jet dot com can compete
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  Speaker 1: with And why is that? Because Jet dot Com is
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  Speaker 1: like a baby going up against pim Fox. He can't walk,
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  Speaker 1: he can't talk. Jet dot com is nothing. But if
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  Speaker 1: they had to be five million for it to buy
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  Speaker 1: its technology a little bit, and maybe the name, the
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  Speaker 1: only thing they get from Jet dot com, the name
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  Speaker 1: that better than Walmart dot Com. But I can tell
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  Speaker 1: you they could have hired former FedEx executives who have
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  Speaker 1: done great job in branding a name, and they could
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  Speaker 1: have given them a better name for a few million
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  Speaker 1: dollars because Walmart dot com reminds the young teenagers and
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  Speaker 1: the millennium generation that after Grandpa's and they don't buy
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  Speaker 1: from Walmart dot com no matter how good the deal is.
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  Speaker 1: Walmart buying Jet dot Com has been described in the
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  Speaker 1: same paragraph as something called gain sharing. This is luring
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  Speaker 1: buyers to add items to their orders to cut the
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  Speaker 1: shipping costs and to pay with a debit card instead
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  Speaker 1: of a credit card to reduce transaction fees. Is that
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  Speaker 1: how you understand it as well? There is an element
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  Speaker 1: to it, but that is nothing, nothing complicated. Walmart, if
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  Speaker 1: with all the millions of dollars it paid to bring
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  Speaker 1: on companies like Deloitte Tush, that was one disaster a
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  Speaker 1: few years ago. And they've gone from one disaster of
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  Speaker 1: hiring wrong people to build their e common strategy to
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  Speaker 1: now buying jet dot com to think it is going
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  Speaker 1: to be a savior. It will go down pain in
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  Speaker 1: the history of online retail dot com businesses as the
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  Speaker 1: most expensive acquisition and the worst one. It was not
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  Speaker 1: even what I founded million. Why do you think Doug McMillan,
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  Speaker 1: the chief executive of Walmart, decided to go ahead and
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  Speaker 1: do this because the people in Bentonville, Walmart headquarters, have
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  Speaker 1: gotten desperate because their online retail sales are declining. The
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  Speaker 1: growth rate from being at twenty seven percent growth rate
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  Speaker 1: in first quarter of to being seven percent in the
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  Speaker 1: first quarter of sixteen. And they're in a panic mode
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  Speaker 1: and they are buying companies no matter what it is,
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  Speaker 1: just to show that they're trying to do something and
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  Speaker 1: they're actually doing the wrong thing. The board of directors
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  Speaker 1: of Walmart should stop the PI executives from closing on
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  Speaker 1: it until they get some fairness opinion, not some bankers
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  Speaker 1: who don't understand it, but from people who understand the
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  Speaker 1: core business that this is. And Walmart shares it down
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  Speaker 1: about a half a percent down even more such as
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  Speaker 1: a desperation acquisition. And Jet dot Com think about it,
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  Speaker 1: they were just valued at only one point three billion
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  Speaker 1: in November, and who else was gonna buy them? Giving
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  Speaker 1: them six months to a year, they would have run
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  Speaker 1: out of cash and there would have been nothing left
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  Speaker 1: for Jet dot Com. Certise Gender President s J Consulting Group,
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  Speaker 1: thank you very much giving us his thoughts on Walmart
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  Speaker 1: dot Com or Walmart buying Jet dot Com price tag
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  Speaker 1: three point three billion in satitious words, bad dollars. This
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  Speaker 1: is taking stock. I'm pim Fox. This is Bloomberg coming up.
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