The Chinese e-commerce giant Alibaba is set to invest an unspecified amount in Jet.com, the yet-un-launched startup that plans to take on Amazon, Forbes’ Ryan Mac reports.
Founded by former Quidsi CEO Marc Lore, Jet plans to compete with Amazon using a dynamic pricing model and has raised more than $US200 million, most recently at a $US600 million valuation.
Lore told Forbes in February that Jet had no plans to raise any more money, after its latest $US140 million funding round, though he has said in the past that he eventually sees Jet raising as much as $US600 million.
For Alibaba, the investment would follow its strategy of putting money in American companies to give it insight on Silicon Valley trends and forming partnerships, according to Forbes.
Jet is set to launch in beta this month. Like Amazon, it will sell just about everything — but it promises its prices will ultimately be 10 to 15% lower than they are anywhere else. In exchange, people will pay a $US50 annual membership fee. It’s like Costco, but online.
Jet plans to achieve these super-low prices in a couple of ways.
Buyers will be able to get lower prices by combining multiple orders into a single shipment. For example, if you want to buy a soccer ball and shin-guards, you’ll see a list of sellers that offer both, and will save about $US5 if you choose to go with one of those options, since the seller will be able to put the products in one box.
You can also save money by ordering from a more local retailer or by accepting slower delivery speeds than Amazon’s famous 2-day free Prime service. If you choose to pay with a debit card instead of a credit card, you can save 1.5%.