Traditional brick & mortar stores have been struggling for over a year since the beginning of COVID. Companies that sell primarily unbranded, well-reviewed products on Amazon marketplace are being bought by businesses created just to consolidate those Amazon sellers. These well-funded acquirers are called Amazon Aggregators and are committed to acquiring Amazon brands, conducting brand integration and helping portfolios achieve growth at a global scale.
China is the most prominent supplier of Amazon sellers. Up till now, 63% of Amazon’s top sellers are from China, and a third of them are in Shenzhen. In 2019, Nebula Brands was established in Shenzhen. Starting from a cross-border e-commerce fintech platform, Nebula has accumulated a deep understanding of Amazon’s business model based on its strong data processing and modelling capabilities. In 2020, Nebula launched the third-party brand acquisition business and is the first Chinese company to use the “Aggregation + Operation” model to conduct brand acquisition on Amazon.
“Nebula has a multinational management team with global vision and China-specific country knowledge. On day one, our strategy formulates around making Chinese brands on Amazon go international. We follow up closely with the needs of overseas consumers and leverage China’s supply chain advantages to tap the huge global consumer goods market.” Says William Wang, co-founder of Nebula Brands.
In January, Thrasio, a brand acquirer from the United States, announced its entry into China. Despite being well-capitalised and coming to China with strong momentum, overseas brand aggregators need to solve some big challenges. Identifying compliant and high-quality targets from thousands of native Chinese shops operating in a China-specific way would be a headache for any western business. Also, negotiating with smart Chinese businessmen and convincing them to sell the business would take more than a few phone calls from head offices across the Atlantic.
In the view of Nebula Brands, local knowledge is as important as the global perspective. It is critical to understand the mentality of Chinese sellers and establish an efficient local supply chain to accommodate and consolidate each business. Capital would accelerate the acquisition process but building a tailored ecosystem based on Amazon and China would be a threshold for any foreign business.
Nebula’s cross border supply chain finance business help banks analyse the cash flow of Amazon businesses. The team has a strong data team consists of veterans from reputable banks and tech firms. Empowered by data analytics, the investment team can value the business value of a potential seller within 24 hours.
“Sellers are our strategic partners. We appreciate their sector knowledge and they love speaking with us. It’s like having a good friend who can offer help any time. They want to hear our opinion and we are happy to share the growth with friends.” Says William Wang.
