With sales expected to surpass $1 billion by 2020, Wal-mart and Amazon have announced a merger that could boost the retailer’s fortunes and expand its footprint in the world’s largest economy.
Wal-Mart’s deal, announced Tuesday, includes a total of 1.2 million units of Amazon’s Alexa, which will enable the online retailer to offer a broad range of products, including food, toys, video games, medical supplies, furniture, and apparel, according to the announcement.
Amazon will continue to offer its Alexa voice-activated home automation systems for $69.99.
The deal, which is valued at $2.1 billion, comes just weeks after Wal-Marts $5 billion acquisition of Amazon Prime, which was announced by Wal- Mart CEO Doug McMillon last month.
Walmart will sell about 2.1 million devices for Amazon’s Amazon Echo, which includes its Alexa-powered devices and a new version of its popular voice assistant, Alexa.
The company will also sell Alexa-enabled Alexa-branded home automation system for $99.99, which could add another $100 million to the transaction.
The deal is expected to close by the end of 2019.
Walmarts CEO Doug Walmson at a conference in San Jose, California, in July.
Amazon’s Alexa devices, which were first announced in 2017, can be programmed to answer questions, play music, control thermostats, and play the weather.
It also can make phone calls, answer emails, read news, and make shopping lists, among other uses.
Walmart and its customers will benefit from Amazon’s growing business in the electronics and home goods market, where sales are projected to top $10 billion in 2020, according the company.
The retailer is in the process of closing stores and moving away from traditional department stores to its own e-commerce site, as well as opening stores in Asia and the Middle East, according a company spokesperson.
Amazon, whose market value is $13.4 billion, is expected in the first half of 2020 to sell more than $300 billion in retail products and services, according To The Stars, an online shopping and shopping guide.
Walmson, in his speech at the event, said Amazon has the potential to be the “world’s largest e-retailer.”
“We’re going to bring a huge amount of products to Walmart and Amazon and then compete head-on with the likes of Apple and Microsoft,” he said.
The merger could also help Amazon grow its retail footprint and attract more shoppers.
Walmart is already a big customer of Amazon, having paid more than a billion dollars in the past three years for more than 400,000 items, according To The Stars.
Walmart and other retailers are also working to expand their e-store business, which offers a number of items, including groceries, household goods, home goods, and electronics, and has already signed deals with Amazon and Target.
“If Amazon continues to expand its business and take on Wal-Man and its other brands, this merger could be the catalyst that creates even more competition for Wal-Stores e-stores and the broader online retail marketplace,” wrote David Schoenfeld, president of consumer research firm IDC.
Walmesons chief financial officer said the deal is not about competition but about growing sales.
With Wal-Mergers, Walmart is buying two brands, the voice-controlled assistant Alexa and its Amazon Alexa home appliance.
The combined company is expected use the Alexa technology to provide the same services to Walmart customers as it does to Amazon customers, said Mike Foy, Walmesons senior vice president for communications.
The two companies will share a total value of $1.2 billion.
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