US retail behemoth Walmart has signed a US$3bn cash deal to acquire e-commerce start-up Jet.com in a move to grow its online business at a faster rate and reach more Millennial customers. 

The agreement will see Walmart keep the Jet business as a separate unit but tap into the brand's bulk ordering strategy. It will also enable the retailer to position itself for faster e-commerce growth by expanding customer reach and adding new capabilities.

Growth in Walmart's online business has slowed in recent quarters. The deal, therefore, may help reinvigorate sales and help the retailer take on Amazon, whose sales have surpassed $100bn annually. Last year, Walmart's online sales amounted to $13.6bn, on a total revenue of $482bn.

The retail group has been investing in efficiency to give it a pricing edge, and may now be attempting the same for its online operations. Last month, Walmart said it was working with multinational online transport network Uber and other partners to test deliveries to customers from US stores and clubs. 

Investments are also being made in online grocery pick up, the retailer's two-day shipping programme and its mobile wallet, Walmart Pay. It is also using drones in its warehouse.

Wal-Mart banks on tech investment to boost online sales

Also last month, the firm acquired around 5% of leading Chinese e-commerce company JD.com, an investment worth about $1.5 billion. As part of the deal, Walmart is selling its own Chinese e-commerce site, Yihaodian, to JD.

Wal-Mart eyes China turnaround with JD.com deal

Walmart CEO Doug McMillon said of the latest deal: "We're looking for ways to lower prices, broaden our assortment and offer the simplest, easiest shopping experience because that's what our customers want. We believe the acquisition of Jet accelerates our progress across these priorities. Walmart.com will grow faster, the seamless shopping experience we're pursuing will happen quicker, and we'll enable the Jet brand to be even more successful in a shorter period of time."

Jet.com launched in July last year and is among the fastest growing e-commerce companies in the US. Demonstrating its ability to scale with speed, the company reached $1bn in run-rate Gross Merchandise Value (GMV) and offering 12m SKUs in its first year.