Sony a Key Customer of Vtex, SaaS E-Commerce Platform, Says IPO
The Vtex software-as-a-service digital commerce platform processed orders worth $7.5 billion in “gross merchandise value” (GMV) for its online customers in 2020, nearly double its 2019 volume, said the company in an F-1 registration filing Friday at the SEC for an initial public offering of Class A common stock. The platform enables customers to deploy their e-commerce strategies, “including building online stores, integrating and managing orders across channels, and creating marketplaces to sell products from third-party vendors,” it said, claiming 2,000 customers in 32 countries, mostly “enterprise brands and retailers.”
Brazilian company Vtex is “a leader in accelerating the digital commerce transformation in Latin America,” and is expanding globally, said the IPO. It drew 43% of its revenue last year from customers outside Brazil, up from 29% in 2019. The COVID-19 pandemic accelerated e-commerce adoption when consumers increased their online spending “due to extensive stay at home orders,” it said. Global e-commerce GMV was an estimated $4 trillion in 2020, and is expected to reach $6 trillion by 2024, based on an 11% compound annual growth rate, it said: “As we continue to expand our platform offerings as well as our global reach, we expect to capture more of this GMV. We believe that our market will expand as consumers continue to shift purchases to online channels and brands and retailers adapt to evolving consumer preferences.”
How consumers “discover, learn about and ultimately purchase products is evolving due to digital transformation and advances in technology,” said Vtex. “Enterprises must address the breadth of consumer interaction points and potential sales channels, ensuring a satisfying consumer experience from discovery through delivery. Without an effective digital presence, retailers are often overlooked by consumers, lag behind competitors and have difficulty generating growth.”
The “convenience-driven” economy requires “deep changes to complex, legacy supply chain networks,” said Vtex. “Consumers seek frictionless online experiences and the convenience and speed provided by on-demand delivery. Growing expectations for shorter on-demand delivery times require significant planning, coordination and execution to ensure supply chain networks are aligned to meet distribution and fulfillment.”
The technical requirements for fulfillment are “complex and involve the synchronization of back-end systems, including those related to customer information, inventory, orders, products, payments and other data that originate in different sales channels,” said Vtex. Many brands and retailers “have supply chains with existing networks of in-store and warehouse distribution facilities, adding another level of complexity to optimize operational efficiency,” it said. “As brands and retailers navigate these deep challenges, digital collaboration has emerged as a potential path for brands, retailers, suppliers and third-party providers to stay in constant contact with consumers to ensure frictionless distribution and fulfillment.”
Legacy e-commerce software, though “still prevalent” in most enterprises, does not “effectively address the needs of digitizing brands, manufacturers and retailers in a fast-paced, evolving and competitive environment,” said Vtex. The Vtex SaaS offering “drives comprehensive digital transformation” through collaboration with “suppliers and partners,” it said. “Our platform enables brands to offer compelling and consistent digital experiences across multiple channels and deliver their full brand experience directly to consumers.”
Vtex gives customers a “centralized technology hub” that enables “a 360-degree view of inventory and orders,” it said. It does so securely and with “scalability,” it said. The “power” of the platform “comes from an auto-scaling, elastic cloud infrastructure that helps brands and retailers respond to market changes and customer demands in real-time,” it said.
One customer, a “global electronics brand manufacturer,” needed to scale its direct-to-consumer operations in 19 countries by migrating from its “homegrown platform” to Vtex, said the IPO. “Within 10 months, this global electronics brand manufacturer successfully launched fully functional, active online stores in 14 countries, including 11 in countries outside of Latin America.” In the U.S., the company had a 25% increase in conversion rates after the migration and in Europe average delivery time was reduced by 30%, it said. Sony is the only brand listed that fits the description among the nearly two dozen logos in the IPO representing key customers. Sony didn’t respond to questions Monday.