Less than a year after launching, local e-commerce aggregator Una Brands already has a portfolio of 30 e-commerce businesses throughout the APAC region and an annual revenue run rate of $100 million. And it plans to spend a further $100 million over the next two years as it looks to become a unicorn.
Backed by Vestiaire Collective CEO Maximilian Bittner among others, Una Brands is part of the global aggregator boom, which has seen the likes of Thrasio in the US and Rainforest in Singapore scoop up sellers on online marketplaces and scale them into global businesses.
So far, most of Una Brands’ acquisitions have been in the home and living category, which benefits from low return rates and levels of regulation, and strong demand. They include Singaporean bed sheet brand Heavenluxe and ergonomic chair brand Ergotune.
Its primary focus is on increasing the profitability of these businesses by optimising supply chain, procurement, logistics, customer service and inventory management, and pumping money into digital marketing, product innovation and geographical expansion.
“For our first cohort of businesses that we acquired in June last year, the trailing 12 months profitability has increased by about 50 per cent. On an annualised basis, the profitability has increased about 70 per cent in the first year,” Una Brands’ co-founder Adrian Johnston told Inside Retail.
“For our second cohort of businesses that we bought in August, profitability has increased by about 30 per cent. And the same with the third cohort as well, which was our September cohort.”
The business employs 180 online retail experts, including a digital marketing team and tech team in India, an operations team and a branding and creative team in Singapore, a procurement team in China, and a growth team and brand management team in Australia.
“We also operate in Malaysia, Indonesia, Taiwan, and very recently, Korea,” Johnston said.
Below are some of the key takeaways from our recent conversation with Johnston about the major trends he’s seeing in the e-commerce space and what Una Brands’ acquisition pipeline looks like.
The focus on home and living
“During Covid, there was a huge bump [in spending on home and living], and there was concern that there might be a pullback from that after lockdowns were lifted. Actually, we haven’t really seen that.
“Aus Post released a report about two weeks ago, which again showed that home and living was the fastest growing category in 2021, as well as in 2020. So we’re pretty comfortable with that as a category selection.”
The impact of rising oil prices on e-commerce
“When you talk about the supply chain and cost of freight, I see that as having stabilised very dramatically over the past five months or so. In some instances, we have seen the cost of a container come down, for example.
“If you’re referring to the more immediate effects with regards to Ukraine, we haven’t seen that filter through yet. It might do, but realistically, the cost of fuel is not the main driving factor in the cost of freight. It might have been when the cost of a container was $2,000. But when the cost of a container is $20,000, the cost of fuel is less important.”
The major trends online retailers should be aware of
“There’s an expectation of sustainable packaging and an expectation of a company ethos that is environmental in nature. Particularly for DTC brands, that’s a trend that is pretty important that we’re tracking.
“The other big trend in e-commerce at the moment is the rise of social commerce. That’s impacting a lot of our brands, so we’ve invested pretty heavily in the social team. Obviously the latest one is TikTok, but the others are still extremely relevant. It’s been impacted somewhat by iOS developments, which presents a bit of a challenge, but by and large, Facebook and Instagram are very important sales channels for us.”
The online landscape in Southeast Asia
“Australia was our launch market, and we’ve actually found that there’s a much greater proliferation of e-commerce businesses in Australia than in some of the other markets we’re in. But we operate across the region.
“We just acquired another aggregator in Korea called Click Brands, so we’re working with them to acquire brands in Korea. It’s a very strong e-commerce market, similar to Australia in that sense. We’ve acquired a couple cosmetics businesses.”
The pipeline of potential e-commerce acquisitions
“When we entered the market, we did have an expectation that at some point, we would get through all of the attractive businesses. But actually, we’re finding that there’s just a lot more than we were expecting. The e-commerce space in Australia really is a very impressive and active space with thousands and thousands of businesses that fit our criteria.
“When we launched a year ago, I was imagining that a year later, we’d be potentially scraping the bottom of the barrel. But we’re in no way doing that.”
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