VTEX is one of the companies that grew very fast in the last years. An ecommerce platform that grew by 43.5 percent in 2020 and it is now listed on New York Stock Exchange. Business Review talked to Cristi Movila, Growth Leader CEE at VTEX, to find out more about the company and plans for the future.
Business Review: VTEX was listed on the New York Stock Exchange. What does this mean for the company and how do you expect the company’s actions to evolve in the next period?
Cristi Movila: The listing process was a natural step in the 21 years evolution of the company and I’m glad that, after all this time, we managed to see VTEX listed on the NYSE.
As Mariano Gomide de Faria, the co-CEO of VTEX said, “our IPO just marks another step in our journey as we continue to expand our global footprint and it also represents a huge achievement for the LATAM region. With our public listing, we hope to inspire entrepreneurs from the emerging markets to continue to raise the bar in disrupting the worldwide software industry.”
For us, the listing was first and foremost a validation of the sustained efforts of our multinational team and the perfect occasion to tell the world: VTEX is here!
In 2020, we saw our revenue grow to $99 million, a 95% increase over the prior year, while processing $7.5 billion in gross merchandise value (GMV) through the platform.
Can we say that this listing is the most important event of the year for VTEX? What other event would you mention for the evolution of the company (or an event that should happen by the end of the year)?
Listing on the stock exchange was a very visible event, but it wasn’t the only one. IDC Worldwide Digital Commerce Market Shares, published in June 2021, indicates that VTEX is the fastest growing ecommerce platform in the world for the second year in a row, with 43.5% growth in 2020 (and 44.1% in 2019) in the period under analysis.
VTEX was also named “Leader” in IDC MarketScape, Worldwide B2C Digital Commerce Platforms 2020 Vendor Assessment, a study that evaluates platforms from around the world in the B2C digital commerce category in the cloud, having stood out against companies such as Commercetools and Salesforce.
We also have several internal events and external collaborations such as VTEX Accelerator which aims to accelerate and develop ecommerce markets in a global context.
This is a competition that includes the Incubator and the Accelerator programs, both aimed at supporting ecommerce start-up companies based on the maturity of their technology solutions. For last year’s edition alone, there were 344 applicants from 44 countries. From this group of applicants, for the next – and final – round of the selection process, 18 start-up companies and solutions from 13 countries were admitted. In the previous edition, selected companies that went ahead benefited from a non-reimbursable financing of 10,000 USD, access to private investors, advertising during major ecommerce events, expert guidance, fully-funded scholarships, access to collaborative spaces and VTEX tools.
Online commerce has been boosted by the period of restrictions imposed by the pandemic last year. What did this period mean for VTEX?
The share of online sales in total retail sales was around 10% in 2020 in Romania, and in 2021 it will increase to 15%, supported by the accelerated growth of online sales, but also by stagnation and uncertainty offline.
The pandemic has given a new impetus to the ecommerce market, forcing retailers to rethink their business models and be where consumers have migrated – online. But this did not come naturally, it required energy, understanding, important financial resources, as well as the involvement of top specialists to help them understand an extremely dynamic and effervescent market.
For VTEX, this period meant a lot of work with new and older customers alike, new challenges but also the first B2B ecommerce study in Romania, the COVID-19 pandemic bringing to the fore the special role that ecommerce plays in this period.
Furthermore, the pandemic forced VTEX to speed up its processes, to increase the number of offices globally and, of course, hire hundreds of digital experts on many levels – Romania included.
What is the best approach for a company that does not yet have an online presence or does not have a strong enough online presence?
Developing your online presence is never a one-off event, especially given the current competitive landscape. In order for a company to grow and have tangible results, it must adopt a long-term strategy, in tune with the market context, but also be responsive to external events. In this respect, the pandemic has offered a harsh lesson to many online and offline stores. T What I noticed is that there is a great need for consistency,-consistency in investing in digital, staff training, and the education of those responsible for the field. Our innovative ecommerce platform and our in-depth expertise in trade release brands from the constraints imposed by legacy systems.
How is the online market in Romania compared to developed markets? How much longer do we have to consider ourselves a developed market?
In many aspects, Romania is a developed market – while ecommerce penetration is not as high as it could be, customers have a level of maturity, comparable to larger markets. What we noticed compared to last year is an increase in the home & deco segment and sports and fashion items. The main factor that led to this increase was the work from home shift. We witnessed a 30% year-over-year increase, and this was felt in most markets. The Romanian market is constantly growing and developing and more and more businesses are looking for digital specialists. It must be understood that there are two categories of companies on the market.
Those who invest and make long-term plans and are aware of the need for a solid investment, and clear in business, in technology, who spend large sums per month, and there are the companies that have limited investment budgets, which before taking into account the digitization they have to solve other things, which are related to the internal processes. However, the share of online retail sales has already reached 15% globally and somewhere around 8-10% in our country.
Regarding the challenges in Romania, I think that the market is still not mature enough to understand that there is a need for investments in this area of activity. You can not grow and keep up with trends and your competitors, if you do not have a coherent strategy. Ecommerce should be seen as an active part of any company’s strategy. Anyway, our market is developing and I can say that we have just scratched the surface, the potential being very high in some areas.
When you took over the management of the company, you announced that you were aiming to reach a number of eight customers. How many customers did you manage to gather last year and where are you at the moment?
Much more than that – further proof to VTEX’s great technology, local team and partners. We’re generally talking big and very big commerce players, companies with big potential on the local and also international markets from the entire region.
How do you think online commerce will evolve in the next period (including in the coming years)? How will VTEX evolve?
At the moment we serve over 2,000 brands globally and well-known names such as Sony, Walmart, Whirpool etc. I strongly believe that this access to technology from all over the world leads to a centralization of platforms and customer needs.
We have to move very well and adapt very quickly, and we will have to develop the product very well. It is a very competitive environment and the general tendency towards globalization is clear. If in the brick and mortar field there are certain obstacles, it is clear that in the online space the competition is very high. For the next few years, ecommerce has an upward slope to cross. For example, according to the study I mentioned earlier, three out of five Romanian companies would be willing to invest in an ecommerce platform, which means that there is a great desire to accelerate digital transformation