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Jun, 2021     

eCommerce Roll-Ups: On A Roll

E-Commerce has been flourishing as an important channel for retail of consumer products across the globe and has paved way for retailers, merchants, and independent private labels to scale.


1. Merchants, private labels start big on eCommerce platforms but tend to achieve stagnation owing to a myriad of challenges

E-Commerce has been flourishing as an important channel for retail of consumer products across the globe and has paved way for retailers, merchants, and independent private labels to scale.

However, what has been observed is that after an initial bout of growth a lot of these brands face challenges such as lack of working capital, rising competition, complex supply chains, etc which limits the growth potential of these sellers/brands.

Key Challenges faced by private labels and merchants

2. eCommerce roll-ups help these brands in bringing their net value, enveloped by uncertainty and risk, to the fore and realise their potential

Massive growth in eCommerce in recent years has resulted in the emergence of eCommerce roll-ups that help brands/merchants in unlocking their full potential and achieve better financial returns.

E-commerce roll-ups acquire category-leading or category creator brands that have rave reviews and strong pull in the market and combine them to provide shared expertise and increase EBIT and operating cash flow by:

1) Reducing overhead costs
2) Reducing operating costs without a forced reduction in volumes or prices
3) Increasing prices without losing volumes

Key criteria for roll-up companies when acquiring brands

3. E-commerce roll ups have been gaining momentum across the globe and will continue to be an interesting sector to look out for in SEA

eCommerce roll-ups have been emerging across the world and have managed to attract the attention of the investor community with their unique business model.

eCommerce roll-ups focus on acquiring merchants/brands that have annual revenues ranging from less than a million to USD 10 Mn and products with low to no seasonality and help them in scaling greater heights.

Since E-commerce in SEA is in the acceleration phase and is expected to grow steadily in the following years, the opportunity for eCommerce roll-ups is also expected to witness exponential growth.