In recent years, a series of acquisitions by major brands have made the information landscape feel rapidly changing. Benitago, headquartered in New York, sought bankruptcy protection less than two years after raising $325 million in funding. This bankruptcy may mark the end of the Amazon acquisition frenzy and serve as a point of reflection for many large companies regarding their acquisition strategies.
Benitago, founded in 2016, initially operated as a boutique seller on Amazon, specializing in a niche within the e-commerce market and was one of Amazon’s numerous investment groups. In its early years, the company operated without external financing, using its own capital for development. However, in 2020, during the rapid growth of North American e-commerce due to the COVID-19, Benitago quickly transformed into an Amazon business acquirer, focusing on acquiring cross-border e-commerce brands, with Amazon being a prominent representation.
In March 2021, Benitago secured $55 million in financing, and in November of the same year, it received a $325 million investment led by the asset management company CoVenture. By this time, Benitago had accumulated 10 brands and 300 products, including acquisitions of 10 related development brands. In 2021, many small sellers also received acquisition offers from various Amazon brand acquirers. The cross-border e-commerce market was booming, and numerous brands were acquired one after another. Benitago’s approach differed from its peers, as it developed a more comprehensive acquisition strategy that could sustainably expand cross-border e-commerce brands. In 2021, amid intense competition, Benitago once again seized the initiative. The brands it acquired all showed promising performance under its new management, demonstrating favorable growth rates. This was Benitago’s core competitive advantage, as acquiring brands was just the first step. Efficiently operating and consistently delivering performance in the long term were more crucial steps.
This trend continued until the second half of 2022, when the rapid growth of cross-border e-commerce came to a halt. Many companies, including Benitago, began announcing layoffs as demand returned to pre-Covid-19 levels, leading to a slowdown in acquisition activities. One of Benitago’s major competitors, Thrasio, also announced layoffs in 2022, which had a ripple effect on the entire industry’s capital outflow. The overall industry growth slowed down, and intense competition emerged among various brand sellers. The entry of players like Temu and Tiktok escalated the market into a highly competitive phase. The influence of Benitago and its peers had diminished, leaving the final competition focused on products and prices.
Now, the New York-based online seller Benitago has just filed for creditor protection in the Manhattan bankruptcy court in the United States. According to documents submitted by the company, its assets and liabilities range from $50 million to $100 million. In this current landscape, major sellers must focus on refining their own products and finding their niche. Amazon sellers can learn from the experiences of platforms like Temu, optimizing their upstream and downstream operations, supply chains, and logistics to the utmost. To survive in intense competition, long-term competitiveness and continuous improvement in management are essential.
