Walmart, the world’s largest supermarket chain, has agreed a $3.3bn deal for Jet.com, an online retail business founded just two years ago with annual sales of $1bn. Although Walmart already operates an e-commerce site, the deal for Jet.com represents a significant shift in its online strategy as the retailer attempts to close the gap on its US rival Amazon. Last year, Walmart generated online sales close to $14bn (3% of total sales) compared with Amazon sales of $107bn. While Walmart’s online sales grew at a rate of 7% in its most recent quarter, this is more than half the 15% sales growth rate of the overall e-commerce market in the US. Amazon sales grew by more than 30% in its most recent quarter.

In the next decade, the e-commerce market in the US is estimated to reach $1tn in sales and Walmart say it plans to build upon the Jet.com brand to better rival Amazon in this fast-developing market. Jet.com has about 3.6m customers and has yet to turn a profit.