With the merger of the two giants, small and medium-sized sellers on Amazon may suffer a dimensionality reduction blow!

In the past few years, Amazon has grown rapidly due to the pandemic, and its store acquisition business has also continued to grow. However, as Amazon's growth has stalled, Amazon's aggregators have also begun to have a hard time.

Recently, there is news that German Amazon aggregator SellerX will acquire American aggregator Elevate Brands. Once the acquisition is completed, it may become the world's largest Amazon aggregator. Insiders revealed that the acquisition may be completed as early as the end of this month.

Amazon's acquisition business once showed explosive growth, but after the end of the epidemic, there were obvious signs of weakening growth, so it is not surprising to see consolidation among some aggregators.

However, after the merger of the two giants, their brand matrix will be further consolidated. With strong operational capabilities and capital operations, some small and medium-sized sellers on the platform may suffer a dimensionality reduction attack.

After the acquisition, SellerX will become a multinational giant with a diversified investment portfolio of more than 40,000 consumer products and consolidated sales of more than 400 million euros.

In terms of brands, the merged brand portfolio will include more than 80 Amazon-owned consumer brands in the fields of sports and outdoor, home kitchen, mobile accessories, pets and consumer products.

In terms of business, the merged business will mainly rely on SellerX's technology platform, warehouse operations and international global supply chain capabilities. Elevate Brands will need to contribute its strong expertise to transform local products in the market into consumer brands sold through multiple channels.

By operating the two platforms together, the Group will achieve significant synergies across the value chain and improve the company's overall profitability through operational efficiencies.

In addition, after the completion of this acquisition, SellerX Group will be able to expand its omnichannel distribution capabilities in other markets, including entering traditional retail channels.

On the other hand, some of SellerX’s existing shareholders are planning to invest more than €60 million in new equity financing, which may provide additional M&A opportunities for the combined business.

“Elevate Brands and SellerX are a perfect match: the company cultures fit, the same vision, and complementary capabilities,” said Philippe Tribel, co-founder and CEO of SellerX. “This acquisition will combine our technology and strong brand capabilities with their operational excellence. I am confident that through our collaboration, we can drive further development in the industry.”

“We are excited to join forces with SellerX to continue building world-class omnichannel brands,” said Ryan Gnessin, Elevate Brands co-founder and company president. “We share a mission to become one of the world’s leading consumer products companies. The combined business has the technology, expertise and rich data to enable us to understand emerging consumer trends and quickly test product ideas to meet demand across Europe and North America.”

As the market environment becomes more and more inward-looking, even the giants have begun to band together for warmth, and life will probably become even more difficult for small and medium-sized sellers.

Amazon

Acquisition

Seller