A NEW MODEL OF DOING BUSINESS ON THE INTERNET HAS EMERGED. AND ONE STARTUP IS CHANGING THE WHOLE DYNAMICS., ONE SELLER AT A TIME. HERE'S HOW.
The rise of e-commerce giants like Amazon seems to have opened up a whole new ecosystem. Thousands of aspirational sellers cater their products to billions of buyers with the aim of hitting millions in revenue! As each year passes, more & more consumers turn to the internet to buy stuff. And to satisfy this incessant hunger for new products, more sellers enter the world of Amazon.
The numbers too paint a similar picture. As per this cool chart by the ever-reliable Statista, the share of sales by third-party sellers are increasing on Amazon by a great margin! This is where our startup of the day Thrash.io enter the picture. This American startup has a simple philosophy: Identify robust product categories, find top third-party sellers and acquire them! With its penchant for higher capital, more experienced selling team, superior data analytics & a close relationship with suppliers, Thras.io can scale up the business much better than the original sellers.
Thras.io only buys out sellers which meet certain standards like:
Annual Revenue between 3-15 million USD
Products in emerging & lasting consumer-facing category
Meet the R-Cube Standards pertaining to reviews, ratings & ranking.
After buying out the original seller, thras.io begins expansion of the brands & scales up to reach a greater consumer base. hence in a nutshell, the company does not build a brand from scratch. It simply acquires the one having potential. The original seller gets a lucrative exit strategy which he possibly would have hit a ceiling with (due to lack of resources pointed out before) & the startup has a great selling product ready to capitalise on!
However, so far the thrasio model of doing e-commerce business has been restricted to North America so far. Aspiring emulative entrepreneurs in India have raised hundreds of millions in the past month. These new startups all aim to acquire & scale third-party sellers on e-commerce sites, just like Thrasio. The Indian startups following Thrasio's model are shown in the image below.
However, it remains to be seen if these Indian startups can generate the kind of revenue & traction that Thras.io has. The American e-commerce market is a very mature & saturated industry valued at around 431.6 billion USD in 2020. On the other hand, Indian e-commerce is a minnow, valued at a paltry 79 billion in sharp contrast. Hence, the opportunity for these startups to pick multi-billion dollar brands are slim as the market has not yet even witnessed enough growth. However, India is a gargantuan market with loads of potential. If the per capita GDP rises suitably & urbanization targets are achieved, billions of dollars are to be made!
What do you think? Will these startups rise above the occasion & pick multi-million brands? Will India be a legit e-commerce giant in the future? Let us know!
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