In the biggest e-commerce acquisition in history, PetSmart has agreed to purchase pet food and product site Chewy.com for $3.35 billion. Chewy.com has been one of the fastest-growing e-commerce sites, registering nearly $900 million in revenue last year — only its fifth in operation. This deal is bigger than Wal-Mart’s acquisition of Jet.com for $3.3 billion. PetSmart was valued at $8.7 billion in 2015, when private equity investors took it over, so $3.35 billion is a huge investment for the company.
Total Retail’s Take: PetSmart is taking a page out of Wal-Mart’s book, acquiring a startup e-commerce company to help drive digital sales. E-commerce is only going to continue to grow, and PetSmart is learning to adapt to these changing shopping behaviors. Furthermore, there's a natural synergy between PetSmart and Chewy's customers — their love of pets. PetSmart is banking on the fact that Chewy's digital expertise will help it grow its online sales, while acquiring a new set of customers in the process.