Apart from FBA brands, he said Rainforest also was keen to acquire sellers on Asian e-commerce marketplaces such as Lazada, Carousell, Shopee, and Rakuten, but several issues must be addressed first. For one, there was a dearth of private labels in this region, where different sellers would peddle the same make of one product. This made it tough for third-party sellers to distinguish their offerings.  Many also adopted a sales strategy that was price-oriented, Chai said, adding that the e-commerce platforms focused on this aspect as well to attract consumers. It meant that sellers that did not participate in the platform’s monthly sale campaign would not be able to move their products. This also deterred them from creating and selling their own private label.  Intellectual property (IP) protection remained a sticky issue to resolve, though, e-commerce marketplaces were trying to stem the issue. This would take time, he added.  Meanwhile, Rainforest was evaluating two more FBA brands, both of which were in the due diligence stage that typically took 30 days to complete before the acquisition or transfer was finalised. The startup would name the brands it purchased only when between eight and 12 had been acquired.  Products they sold also would have be relevant to Asia-Pacific markets, he noted. While brands did not need to be Asia-based, he expected at least half of Rainforest’s acquisitions to be from this region due to their proximity. Of the three brands it announced last month, two were owned by a Singapore seller while the third was a US brand.   And while Thrasio had more than 100 brands that each sold different things, Rainforest was targeting about 50 to 60 brands.

Platform fragmentation must be plugged

The Singapore startups also would be looking to differentiate itself by building tools that enabled its brands to more efficiently manage their operations across the different marketplaces.  The fragmentation across these platforms was proving increasingly challenging for brand owners, Chai said. Sellers would have to log in and out of each e-commerce marketplace to update their inventory or product information.  “Managing multiple marketplaces is a big challenge for small brands, especially when they start looking at [taking their products] global,” he said. “Right now, they are [solving the problem by] just throwing people at it, assigning an employee to manage one marketplace each.” “One of the more mundane tasks is having to ensure information was in sync across the different platforms,” he explained. A product that was sold out after a sale campaign on one marketplace would need to be updated immediately as out of stock on all other platforms. This was critical since sellers typically would be penalised if they were unable to fulfil orders, including receiving a bad customer review.  “Managing inventory and pricing across the systems and keeping everything in sync, these are mundane but real e-commerce issues [brands have to deal with],” Chai said, noting that Rainforest hoped to facilitate cross-platform interoperability.  Rainforest also was tapping artificial intelligence, machine learning, and analytics to identify consumer trends early, so the data could be used to acquire the right brands as well as help its brands launch relevant products.   Its primary goal was to enable its brands gain greater operational efficiencies across their supply chain, including sourcing, shipping, inventory, marketing, and  marketplace management, Chai said.  “We see a world where [there’s] a new generation of brand management that is much lighter, automated, and technology-enabled,” he said.

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