What is the origin story of VTEX, and how did you evolve from a startup in Rio to a global company with unicorn status?
Mariano: We were mechanical engineering students in Brazil with a shared dream of becoming financially successful. That is the unvarnished truth behind VTEX’s origin. We started in 2000, at the dawn of the internet boom. The initial years were tough, and we did not have investors to rely on due to the challenging environment in Brazil. We focused on survival by offering e-commerce solutions, and our big break came in 2007 when Walmart invited us to bid for their Brazilian platform. Despite having slim chances, we won the bid. This success marked our entry into the global market. The past 24 years have seen us grow from a small team into a global entity with a strong passion and belief in our mission, driven by the increasing complexity and globalization of e-commerce.
How can VTEX add value to smaller retailers across the U.S.?
Geraldo: Retail has been evolving rapidly over the past two decades, with significant shifts like Amazon surpassing Walmart. This revolution in how we buy things is still in its early stages. Many retailers, especially smaller ones, are not yet equipped with the technological capabilities to keep pace with these changes. At VTEX, we aim to bridge this gap by providing them with the tools they need to stay relevant. We offer more than just additional channels to sell; we are enabling them to operate in an increasingly complex environment where buying habits are changing dramatically. For example, while features like asking Siri to make a purchase may seem futuristic, they are becoming increasingly relevant. Retailers that rely solely on traditional physical channels are at a disadvantage. Our platform offers over 20 channels for selling products and more than 100 payment methods, making retail operations more dynamic and resilient. Without a technology partner like VTEX, these retailers are at risk of failing to meet the demands of today’s market.
Could you elaborate on how VTEX is facilitating Conversational Commerce, especially with platforms like WhatsApp?
Mariano: One of the key ways we support retailers is through simplicity in operations, which is crucial for profitability. The retail industry in the U.S. operates on razor-thin margins, and to improve profitability, simplicity in system architecture is essential. In recent years, the landscape has changed significantly, requiring retailers to adopt new strategies that simplify operations while staying competitive. We provide this by enabling retailers to navigate new and complex channels without incurring excessive costs. One example is the rise of conversational commerce, such as live shopping and personal shopper services, which have rapidly gained traction, particularly in Asia. These new formats are reshaping how consumers shop, often bypassing traditional retail channels altogether. Retailers must adapt to these unstructured buying experiences, like those offered by Instacart, where the transaction is more about interaction than a straightforward purchase. We ensure that our clients are prepared for these shifts by offering future-proof solutions that allow them to innovate without shouldering the financial burden of constant technological upgrades.
How do you see the retail industry evolving over the next three to five years, and what role will VTEX play in this transformation?
Geraldo: Retail, as we know it, is undergoing a fundamental shift. Traditionally, retailers provided products conveniently, acting primarily as distributors. However, this model is changing. Take Temu, a Chinese app that has become one of the largest retailers without holding any inventory; they simply facilitate direct shipments from China. This reflects a broader trend where retailers are increasingly leveraging data to offer personalized convenience, understanding customer behavior to present the right products at the right time. This shift is accelerated by emerging privacy regulations, which require retailers to use first-party data more effectively. As consumers become more protective of their data, the ability of retailers to know and serve their customers will become their key differentiator.
Mariano: I am currently working on a book called "Concierge Commerce," which explores the idea that consumers now have more money than time. This shift is leading to an era where people prefer to declare their buying intentions and have someone else fulfill them. This is the essence of concierge services, personal shopping, and conversational commerce.
The key to winning in this market is simplicity—retailers and brands that invest in making their processes simpler for the consumer will ultimately gain market share. We are witnessing the early stages of a massive transformation in retail, especially in the United States, driven by innovations like live shopping and the influence of Chinese companies.
How do you view the challenges and opportunities related to reshoring and nearshoring, especially given the current political climate?
Geraldo: Retail is deeply fragmented due to cultural differences, which is why there isn’t a “Coca-Cola of retail.” Even global giants like Amazon don’t have the same reach as Coca-Cola because buying behaviors vary significantly across cultures. Global companies that serve diverse markets have an advantage due to globalization, lack of taxation, and advanced technology. However, current political movements are creating barriers to free trade, and this could slow down the global retail revolution, making it more regional again.
Mariano: You cannot discuss retail evolution without considering the reindustrialization of the United States. The U.S. is losing the trade war with China and will need trillions of dollars and millions of jobs to reindustrialize. The country faces a bottleneck, primarily political, in reopening to the necessary immigration to achieve this. As engineering capabilities are crucial, Latin America is positioned as a trusted source of engineering talent. The de-globalization trend might paradoxically lead to a more connected ecosystem, with VTEX well-positioned to support this evolving landscape.
What does the acquisition landscape look like for VTEX in the coming years, and how do you plan to grow?
Geraldo: The way retailers deliver convenience and value to consumers has shifted, focusing now on data. We are investing heavily in the retail media revolution, which connects advertisers directly with consumers through retailers. Additionally, our dynamic growth in Latin America gives us an edge as we expand into the U.S. and European markets. The dynamic nature of Latin American retail has prepared us to offer innovative solutions to these markets.
Mariano: A consolidation in the e-commerce platform market is underway. Fifteen years ago, there were around 40 platforms; now, there are about eight or nine. In five years, there might only be four or five. VTEX is in a strong position to consolidate due to our profitability and lean operations. We still have a majority of our IPO funds, giving us ample cash to explore both organic and inorganic growth. While we are cautious about capital deployment, our goal is to continue creating the most connected commerce software for enterprise B2C and B2B brands in the world, making our clients more profitable than their peers.
Why is VTEX still relatively unknown in the U.S., and how do you plan to change that?
Mariano: Timing is everything. While anonymity has its advantages, we believe the time has come for the world to know more about us. We have significant clients, such as Samsung and Whirlpool, and as we continue to deliver results, word of mouth will spread. Events like VTEX Day, which attracts 22,000 attendees and features speakers like Barack Obama, are helping to raise our profile. We prefer to grow organically by proving the value of our product, rather than through flashy advertising. We aim to convince people one by one, through the quality of our product and our commitment to excellence.
