Singapore Ecommerce Aggregator Focuses On Interoperability Across APAC Marketplace


Rainforest recently secured $ 36 million in seed funding to acquire Amazon’s third-party sellers and a fast-growing brand for sale on Asian e-commerce platforms. We also differentiate ourselves by providing tools that help these sellers to centrally manage their transactions in different markets.

Since launching in January 2021, Singapore-based ecommerce aggregators have acquired three brands sold through Fulfillment by Amazon (FBA). These include Singapore-owned brands that sell bedding products in the US e-commerce market.

Founded in 2020, Rainforest raised $ 6.5 million in equity financing and $ 30 million in debt facilities from a U.S. fixed income fund last month. The money will be used to further acquire the Amazon FBA brand, attract new employees, and develop a tech stack.

Noting that last year, the total value of Amazon’s third-party products increased 50% from 2019 to more than $ 300 billion, Rainforest CEO JJ Chai said many third-party sellers of online platforms are located in the United States. He said he is based outside. About 30% of annual sales of over $ 1 million come from Asia, many of them from China.

In an interview with ZDNet, Chai said the community is growing rapidly and thousands of FBA sellers are joining the platform every day. These merchants can create their own brand, sell products made from anywhere in the world, and send them to Amazon for shipping and logistics processing.

Besides the FBA brand, Rainforest also wanted to acquire sellers in Asian e-commerce markets such as Lazada, Carousell, Shopee and Rakuten, but said it needed to resolve some issues first. He said. First, there was a shortage of own brands in the area, so different sellers offered the same manufacturer of a product. This made it difficult for third-party sellers to distinguish their products.

Many people are also adopting price-driven sales strategies, adding that e-commerce platforms also focus on this aspect to attract consumers. This meant that sellers who did not participate in the platform’s monthly sales campaign would not be able to move their products. It also discouraged them from creating and selling their own private labels.

The protection of intellectual property (IP) remained a difficult problem to solve and the e-commerce market was trying to stop it. He added that it would take some time.

Meanwhile, Rainforest was evaluating two other FBA brands. Both are in the due diligence stage and typically took 30 days to complete the acquisition or transfer. Startups only name the brands they buy when between 8 and 12 are acquired.

Chai said all of the brands identified as potential acquisitions fall into the household and pet categories. It also has revenues of $ 500,000 to $ 5 million, with at least 18 months of operating profit and a net profit margin of 15%. Potential brands also ranked well in Amazon ratings, reviews, and rankings. This includes brands that have played in small niche markets but have been ranked well and have good reviews.

He said the products they were selling would also be relevant to the Asia-Pacific market. The brand didn’t need to be based in Asia, but he expected at least half of Rainforest’s acquisitions to come from the region due to its proximity. Of the three brands announced last month, two were owned by Singaporean sellers and the third was an American brand.

The plan for considering Asian brands was how Rainforest wanted to differentiate itself from other ecommerce aggregators, including market pioneer Thrasio, which focused exclusively on Amazon’s FBA brand ecosystem.

Thrasio had over 100 brands, each selling different brands, but Rainforest was targeting around 50 to 60 brands.

Platform fragmentation must be plugged in

Singaporean start-ups are also trying to differentiate themselves by creating tools that allow brands to manage their activities more effectively in different markets.

Fragmentation between these platforms is becoming increasingly difficult for brand owners, Chai said. Sellers need to log in and out of each ecommerce marketplace to update inventory and product information.

“Managing multiple marketplaces is a big challenge for small brands, especially when they start looking. [taking their products] Global, ”he said. [solving the problem by] Just add people and assign employees to manage each market. ”

“One of the most common tasks is making sure that information is synchronized across different platforms,” he explained. Products that are sold out after a market campaign are out of stock on all other platforms and should be updated immediately. It was very important. Indeed, sellers are generally punished for not having fulfilled an order, for example for having received bad reviews from customers.

“Managing inventory and pricing across the system and keeping everything in sync is commonplace, but it’s a real e-commerce problem. [brands have to deal with]“Chai said Rainforest wanted to promote cross-platform interoperability. ”

The startups are currently developing tools that allow brands to better manage this across multiple Amazon platforms, including localized sites in Singapore and the United States. Later, he said, these will be expanded to include other e-commerce markets.

Rainforest has also used artificial intelligence, machine learning, and analytics to identify consumer trends early on, so that it can use the data to get the right brand and help that brand launch related products. I was able to.

According to Chai, his main goal was to improve the brand’s operational efficiency throughout the supply chain, including purchasing, shipping, inventory management, marketing and market management.

“We are the world [there’s] A new generation of much lighter, more automated and technology-conscious brand management. “

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Singapore Ecommerce Aggregator Focuses On Interoperability Across APAC Marketplace

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