One chart shows why Walmart just spent $3 billion to take on Amazon

Amazon is the king of retail and now Walmart is reeling.

In a deal announced Monday, Walmart acquired e-commerce startup for $3 billion in cash plus an additional $300 million in Walmart stock.

This deal is clearly part of Walmart’s bid to take on Amazon, which currently brings in about $100 billion in annual e-commerce sales against Walmart’s roughly $15 billion. Walmart’s total revenue, we’d note, is nearly $500 billion.

But as the retail business shifts online, the acquisition of not only gives Walmart an existing customer base to build its e-commerce business but the technical and logistical know-how of an online-first retailer.

The urgency for Walmart to do something — anything — to make serious inroads on building out its online operations, however, is clearly outlined in this chart showing the rise of Amazon’s market cap against Walmart.

And while market cap isn’t everything, the shift here very obviously shows that investors are betting big on the future of Amazon while mostly sitting tight on what Walmart is worth, both now and in the future.

Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.

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