Thrasio, an Amazon Aggregation Start-up, Files for Bankruptcy

Thrasio, once hailed as the king of eCommerce aggregation, has filed for Chapter 11 bankruptcy protection. This decision comes despite securing $90 million in emergency funding, reflecting ongoing financial difficulties.

Known for its strategy of acquiring and enhancing smaller Amazon-focused brands—a tactic that elevated it to prominence within the eCommerce sphere—Thrasio's journey involved raising over $3 billion for an ambitious acquisition. These acquisitions encompassed a broad range of products, including camping equipment and kitchenware. However, this "Amazon aggregation" business model has encountered significant challenges.

The current economic downturn and a tight funding environment for tech ventures have necessitated a significant change of course. Thrasio's bankruptcy filing also exemplifies the recent struggles faced by high-growth tech companies. The company expects to use this process to strengthen its financial position and meaningfully deleverage its balance sheet. The Company will continue to operate its business normally and without interruption throughout the Chapter 11 process.

Temu Welcomes U.S. Sellers, Intensifying eCommerce Competition

After making its U.S. debut in 2022 and flooding the market with two Superbowl ads, Temu is planning another strategic move: opening its marketplace to U.S. sellers. This will further intensify the already fierce competition for third-party sellers, especially after TikTok launches its shopping feature.

Temu is primarily focused on selling commoditized discretionary items like electronics accessories and kitchen gadgets, putting it in direct competition with giants like Amazon and Walmart. Other online retailers such as Etsy and Wayfair are also likely to be most affected.

While Temu generated over US$9 billion in sales in the market before opening to U.S. sellers, it remains unclear whether this will be enough to attract sellers. Pricing strategies and concerns about brand image due to association with potentially lower-priced Asian goods may deter some vendors. On the other hand, integrating U.S. vendors could be a way for Temu to build stronger customer loyalty among its local audience. Something they needed to strengthen their position in the market.

Zalando Plans to Remove Misleading Sustainability Labels

According to the EU Commission, online retailer Zalando has committed to removing misleading sustainability labels and symbols from its website. From 15 April 2024, the symbols, such as leaves or trees, will no longer appear next to the products on offer. This was announced by the Brussels authority on Thursday. The Consumer Protection Cooperation (CPC) network, which is coordinated by the European Commission, had set its sights on Zalando in 2022.

"After more than a year of intensive work on our customer experience and a close dialogue with the European Commission, we are pleased that we have now reached an agreement: Our proposals to improve the communication of sustainability-related product information to customers have been accepted and the matter has been closed, subject to the implementation of the agreed changes," Zalando said in a statement.

Instead of the previous labelling, the online retailer wants to provide clear information about the specific product in future, such as the percentage of recycled materials used. In addition, the previous "sustainability page" is to be revised with the introduction of two new websites – one with further information on product standards and one with information on Zalando's sustainability-related approaches and strategies.

According to EU law, companies must provide consumers with truthful information and must not mislead them in order to influence their decisions. The company supports a standardized application of the existing guidelines to ensure that customers are not misled by different interpretations, according to a statement from Berlin. Zalando's primary goal is to provide its customers with all the information they need to make an informed purchasing decision. Zalando is also expected to submit a report documenting the implementation of its obligations. A network of consumer protection organizations - coordinated by the European Commission - will then assess this. If it finds deficiencies, it can impose fines.