VTEX : “In Brazil, 40% of online sales of C&A come from Whatsapp”
Listed on the US Stock Exchange for one year, the Brazilian unicorn VTEX stands out from many IT publishers thanks to its broad functional scope (e-commerce, marketplaces and OMS) and wants to accelerate in Europe. Mind Retail met Alexandre Soncini, co-Founder of VTEX.
Article written by Sophie Baqué, published on 28 June 2022
Can you introduce VTEX?
AS : Founded in 2000 in Brazil and listed in 2021 on the NYSE, VTEX is a platform that supports retailers in their e-commerce, marketplaces and OMS (inventory and delivery management). Between 2019 and 2021, we tripled our turnover from US$50 million to US$150 million (including 53% in Brazil, 38% in Latin America and 9% in the U.S.A., Europe and Singapore). VTEX has 1,700 employees, including approximately 900 developers and engineers. Our offer, available in SAAS, has customers in 38 countries including Brazil, Colombia, Mexico, Argentina, Chile and the U.S.A. plus a spread of European countries. We started the business with large food retailers like Walmart and Carrefour, so we maintain a service that is best suited to large accounts.
VTEX has retail clients such as Cencosud, C&A, Decathlon, Samsung, L’Oréal, Auchan Romania, etc. We have invested a lot in the U.S.A. over the last 2 years, and are now focusing on Europe. VTEX has offices in Italy, Spain, Romania, London and Paris.
Are you closer to Magento, Mirakl or Manhattan Associates?
AS : I don’t know of any competitor as integrated as VTEX, with these three foundations: e-commerce, marketplaces (B2C and B2B) and OMS. On the e-commerce side, we are closer to Magento, Salesforce and SAP, which also handle large flows of orders with a high degree of sophistication, whereas Shopify is aimed at smaller accounts. But VTEX is focused on e-commerce. This is our core business and we really understand the retail operations. Furthermore, we have built up a presence in Latin America, which, like Europe, is a multi-language and multi-currency zone. The big IT publishers from the U.S.A. don’t have the agility to “scale” in this type of markets.
Where do your customers start?
AS : In general, it’s through the e-commerce suite, or the digital marketplace. However, the heart of our solution is the integrated OMS, which is connected to promotions, newsletters and the front-end. Stock information is central. This was our vision 5 years ago, the idea that the customer wants a “one stop shop” with a large functional scope. Most of our clients already have an OMS to orchestrate a back office (such as Manhattan Associates…) but then, integration problems arise. When APIs interconnect 30 different systems, you end up with middleware that allows no agility.
What are the most common “pain points” when you discuss with retailers?
AS : Their biggest problem is that they work with IT solutions that have become proprietary, but they need flexible and scalable solutions that allow them to try and test new functionalities. Furthermore, margins are increasingly tight. Retailers have less money available, and they are facing a dilemma: either be efficient or innovate. Finally, multinationals want to work with fewer IT publishers. They demand integrated functionalities from different channels (B2B, Social) in one single place.
What is the next frontier in e-commerce?
AS : To me, it is conversational and social commerce, with a mix of conversations and videos. In Brazil, in the fashion sector for instance, 40% of C&A’s online sales come from Whatsapp. I think that the browser will disappear, and that it will be gradually replaced by messaging, with solutions like Whatsapp and Messenger. We know that Google is going to launch a messaging solution directly in Google Maps. Apple is also investing here with I-Message. After acquiring 100% of Suiteshare (a conversational commerce solution via Whatsapp) at the end of May 2021, we are actively working on other acquisitions in social commerce. We know the private market has not adjusted prices like a public market, so many transactions remain complex right now. We are also going to launch a video personal shopper solution.
Key figures VTEX
Revenue of US$150 million in 2021
Forecast of US$160 to US$164 million revenue in 2022
2,400 customers, managing 3,200 e-commerce sites in 38 countries