Amazon has been able to become an absolute e-commerce behemoth due to both the fact that it is a very well run company and because they have been able to buy many of the companies that might have challenged it’s spot as the world’s leading e-commerce business (Alibaba is fundamentally different business from Amazon and thus is not really comparable it).
One of the many companies (among them are also for an example Zappos) is a company called Quidsi. The name “Quidsi” might not sound all that familiar, but it was the parent company of for an example Diapers.com. Amazon bought Quidsi in 2011 for $545.
Now few years after selling Quidsi to Amazon the company’s founder, Marc Lore, is looking to launch a new e-commerce business. The company is called Jet.com and it is already making big waves in the world of eCommerce. Already back in September 2014 they raised $80 million series A funding and now in February they have raised additional $140 million at a valuation that is reported to be around $600 million. All this even though they haven’t launched the site yet!
But there is a good reason for why Jet.com seems to need all that money. It really seems like they will be aiming at Amazon.com. When the site launches later this year they will be offering customers yearly subscriptions for $50 and paying this membership fee will guarantee (according to Marc Lore) the lowest price on 10 million products. Running an operation of this scale that is directly competing with Amazon’s business model takes guts and money.
So what are the chances of Jet.com succeeding to make a dent into Amazon’s business? Slim, but not non-existing, I believe. Amazon has an incredible brand recognition and it can enjoy many of the benefits of having invested heavily in it’s infrastructure. However, Amazon.com might not be the sexiest or coolest of the brands and at least the initial design (see the top of the page for screenshot of their current homepage) of Jet.com seems to success that they are trying to be bit more hip and cool than Amazon and in that way get traction.