Jet.com, an e-commerce site from the co-founder of Diapers.com, has yet to launch its marketplace. But it has landed a $600 million valuation, been lauded for its business model and is the buzziest e-commerce entrant in recent memory.
And it is already raising its own ambitions without any real sales. In a presentation to Wells Fargo clients Tuesday, Jet Chief Revenue Officer Scott Hilton said he expects gross merchandise volume on the site of $20 billion by 2020. As recently as late last year, Jet was telling partners this figure would be $5 billion in five years.
Hilton also said Jet expects to have more than 1 million customers paying $50 a year for access to the site by year-end, and 15 million customers in five years.
The figures are “a very conservative view on how Jet will materialize,” said in the Wells Fargo presentation.
Matt Nemer, a Wells Fargo analyst, said $20 billion in annual gross merchandise volume would make Jet larger than the Web sales arms of Wal-Mart and Staples and would trail only Amazon, eBay and Apple in the U.S.
Nemer said the roughly $1,300 that Jet projects each customer will spend annually is around the same as what QVC has disclosed its customers spend. Amazon has not said what the average customer spends on its site.
Jet, based in Hoboken, N.J., plans to take on Amazon by offering lower prices based on the merchandise’s proximity to a buyer, as well as by using commissions towards cutting list prices. The site is expected to open this spring.
Marc Lore, the CEO of Jet and former head of Diapers.com-parent Quidsi, said in an email the company’s ambitions are based on the initial feedback from potential customers, merchants and investors. Lore sold Quidsi to Amazon for about $550 million in 2010.
“[The] appetite for innovation in e-commerce is massive,” he said. “This fact combined with the additional capital we have recently raised has given us further conviction to invest more aggressively in growth.” Jet disclosed in February it had raised $140 million from Bain Capital Ventures, Google Ventures , Goldman Sachs and others.
Lore said earlier this month that Jet has about 1,300 merchants signed up for the marketplace and has turned down hundreds more based on matters of customer service and other factors. The site will have about 10 million unique products for sale when it launches later this year and plans to profit entirely from the membership fees customers pay.
The company has only disclosed a few names of merchants on the site including TigerDirect.com and Sony Store.