Joubin Rahimi
Now we have got the first insights! Podcast here with Mariano. Hi Mariano.
Mariano Gomide de Faria
Hi, pleasure to be here.
Joubin Rahimi
It's great. Great that we can be on your booth, right? At the OMR. And for all of you, VTEX is something pretty new in Europe, right? And perhaps, Mariano, you can say two things about you and two things about VTEX.
Mariano Gomide de Faria
Okay. So about myself, I am a mechanical engineer. So I used to work for banks. Okay. And 25 years ago, I started VTEX. So we started from Brazil, from the city of Rio. And the second thing about me is that I am passionate about spearfishing. So pretty rare sport. And this is what I do, when my wife says that I just being complete as my own is just doing Spearfishing.
Joubin Rahimi
That's really dangerous, right?
Mariano Gomide de Faria
Yeah, you need to take care.
Joubin Rahimi
And are you also eating the fish by your own? Oh, yeah.
Mariano Gomide de Faria
That's the best. That's really fresh.
Mariano Gomide de Faria
That's the really fresh. Afterwards, I can give you one hint here. Here's one friend of mine, a spearfisher, and he's bringing really good fish to the table. That's the best.
Joubin Rahimi
That's the best.
Mariano Gomide de Faria
And he worked for some of these really biggest guys with yachts over 100 Meter. Oh. I cannot say the name, but okay.
Mariano Gomide de Faria
So about VTEX. VTEX is a 25 years old company, a digital commerce platform. We started in Brazil and now we operate in 46 countries. We are public in New York Stock Exchange. We are the leaders in IDC. In German, we operate OBI. It's a pretty big company here.
Joubin Rahimi
Obi for all of you.
Mariano Gomide de Faria
Obi, OBI. So we operate OBI here and we see a good momentum for VTEX in Germany. That's why we came to OMR. And I'm really surprised. OMR is a huge event.
Joubin Rahimi
And the funny thing, Mariano, you already have also your own event, right? Yes. It is at the beginning of June. How many attendees do you have? Listen, listen now.
Mariano Gomide de Faria
So, VTEX Day, it's 25. 000 people per day. So the two days. So at the end, 50. 000 participants. It's a pretty big event.
Joubin Rahimi
Incredible big.
Mariano Gomide de Faria
It is. It is
Joubin Rahimi
like IBM has running events like that or Microsoft.
Mariano Gomide de Faria
Yeah, Salesforce is a bit bigger. Is bigger. VTEX Day, the main stage is for 10. 000 people. So that's the size of the event. We are running the event for the last 15 years and that's how our ecosystem connects. So we do have a 280 Sponsors and more than 200 speakers. So it's one million square meters. So it's huge. Yeah. Yeah. And that's our way to do marketing. Is producing the content and sharing the content inspired by the vision we do have for VTEX.
Joubin Rahimi
The great thing is when I learn about VTEX, you are the player. You are the player in the American market there.
Mariano Gomide de Faria
Yeah, we are doing well. I believe we were in the right spot, in the right moment. Let’s put some aspect of lucky. It’s a brasilian engineer product, but we always develop the product by deploying a complete solution, but also allowing the customers to turn on and turn off some of the modules and composing by themselves. And that naturally became a the go-to for the enterprises. We run Walmart, Carrefour, L'Oréal, Samsung, Electrolux, Whirlpool, all those industries, Black & Decker. So we run all those industries. And the thing that they have with VTEX is, when they need to go fast, they just deploy and go fast. But sometimes they have $1 billion operation and they need to compose and they need to own part of the system. So they can compose in VTEX IO as well. We are in between Shopify kind of a framework like Magento or commercetools, we are in between. And I would credit this, the success of VTEX. So we are pretty happy where we are positioning. I believe we are future proof, where we are positioning. And at the end of the day, there are not so many platforms around. And very, very few of them own it by a group of people with a founder mentality. And we are in this secret spot.
Joubin Rahimi
So that's very interesting because before we decided to go with VTEX, we were analyzing the situation for our clients. And what we saw, they spent a lot of money at Corona for the infrastructure and everything, what they needed. A bit too much sometimes. And then, especially in Europe and Germany, it's not going up like to Corona. It's now decreasing. Sometimes and the people say, okay, we have to save money. So okay, we are in Germany. They spend a lot of money into SAP, of course, or Salesforce, which is demandware ex demandware, which is also coming somehow from Germany. And we do have got shopware, commerce tools. So great products, but they are more and more enterprise, or they are every time enterprise. And then we have the Shopify stuff. And the people who spend a lot of money here. And then we see here, this is all right, and a gap between both. And this is very fitting. That was our feeling there.
Mariano Gomide de Faria
This is correct. The German commerce history is to sell freedom on unlimited basis. So I give you the tools and you create above it. But that actually requires 5 to 6% of the GMV to be spent in the technology infrastructure. And at the end of the day, the game right now is not anymore about functionalities. It is about ecosystem, how lean you can operate, how lean you can scale, how lean … For example, OBI is for me a world class case, where you do have a $10 billion operation run by less than 500 people in IT. And that's, I believe, where the retailers and the brand manufacturers will go. They say, they need to be lean. These are financial status quo that we are living right now. It's not even a crisis. I believe we will stay. So the high interest rate will stay, and the companies need to pursue a fast track to innovate and to customize and develop 100% their own DevOps and everything. It's just too much. So with VTEX, you can choose where you put your bets. So at the end of the day, I state that freedom is not the right to compose.
Mariano Gomide de Faria
Freedom is the right to write off what you have composed before. So when you want to turn it off, you just turn it off your custom thing, you use out of the box, and you keep innovating where you really make the difference.
Joubin Rahimi
And this is what I thought, is you're having the commerce part, you have got a CMS, you have got a PIM, you have got a marketplace, which is very broad portfolio, right? Yes. But it's more or less commodity. So not your product, but in general, it is nothing so special after 25, 30 years of innovation there.
Mariano Gomide de Faria
It's interesting enough to say that innovation right now is to do the same thing with 80% less resources. That's innovation.
Joubin Rahimi
That's a good statement to say, okay, the right thing with-
Mariano Gomide de Faria
Yeah, we have one of the principles of VTEX, we call insist in simplicity. And I believe the world over engineered architectures, connections,
Mariano Gomide de Faria
especially in Germany. We are good in engineering
Mariano Gomide de Faria
No, no, no, no. Germany is doing well. You can see other countries that over engineering much more than Germany. But at the end of the day, the world is over engineered. And now we need to just write off edge cases. You know, like there's a ground rule that say, you don't need to address 99% of the cases and automate the exceptions. Address 95% of the cases because you're going to save 80% of your money and treat the 5% as an exception that you don't need to automate. I believe that's where the commerce world will go. I believe VTEX is well positioned to capture these. So we see the German market as a huge market for us. We do have a lighthouse here that's OBI. So pretty promising what we are seeing.
Joubin Rahimi
So what is also pretty interesting for all the people who are watching and listening, you have got a global view, or somehow global view. And speaking in economics, how do you position Germany, Europe, America? There's so much volatility now in South America.
Mariano Gomide de Faria
So I believe Germany has hundreds or thousands of brand manufacturers. And the brand manufacturing from Germany, they are not yet with the front-end or the global positioning that they need to survive. So let’s take a company, for example, like MTU Rolls Royce. All the B2B in Germany didn’t invest in rebuilding the front-end of the channels as other countries. So it’s still a very old way of distributing and communicating. But this is about to change, because with the AI thing, you need to control the channels. So there is no space anymore for brand manufacturers, like Stanley, Black & Decker. They use VTEX, and now they are creating all like a vast numbers of channels to address any demand, from EDI, from Punchout, to self-service portal, to sales rep automation systems. So all of these, outside of SAP, we are calling this the front-end of the ERP. For many, many years, the ERP was the front-end.
Joubin Rahimi
Right, it was the truth for everything.
Mariano Gomide de Faria
Yes, and not anymore. So the B2B needs a tool to sell. And the e-commerce platforms will take this space. And Germany has a big market on B2B and can use this globally. For example, companies that are being manufactured in Germany, for them to discover a new market like Brazil, like Mexico, like Thailand, it needs the old way to go, too. With the digital, the new market comes to you. So it becomes cheaper to distribute what you already have. So it's a massive B2B replatform, that we're going to see in the world. And the incumbents like SAP, Salesforce, they do not have the capability of delivery the last mile on channels as VTEX. So that's why we are really enthusiastic by being here and by pushing the market.
Joubin Rahimi
What I understood is, I was in a project, one client was in Greece, and they had a lot of issues with the addresses. You have got the same, right? Because in Germany, one address, one name, nearly like that. But you have got even in Favelas and so on, not really addresses, right? No. You covered it differently.
Mariano Gomide de Faria
So this is one aspect of a global platform. When you started to VTEX and deploy multiple countries out of the box. And I believe this is one of our main differentiator. We call ourselves the backbone for connected commerce. For example, just in payments, we do have more than 150 connections, live. You don't need to integrate, you just go live. So these of things gives the brands the ability to test new markets. Instead of being a big project, they just test. And that's what I believe the world needs, is the brands to be more aggressive in testing new markets, and at the end of the day, become more profitable.
Joubin Rahimi
So there's still a a lot of room having German brands going over to Brazil, for example?
Mariano Gomide de Faria
German brands going all over the world. Today, they go buy a master franchise by old ways of distributing. And I believe, it's not the digital that's changing. It's the way you distribute your manufacturing that's changed. The manufacturing is changing overall. And with the tariffs, it's a new element. Of course. Yeah.
Joubin Rahimi
Trump is one of the best sales guys now for Brazil.
Mariano Gomide de Faria
He's creating a lot of volatility. So at the end of the day, how you manufacture and how you distribute, now you need to lever the velocity, the speed, as one of your ingredients to survive. And I believe that's what VTEX delivers.
Joubin Rahimi
And one question, you have got C&A as a a client, the fashion retailer from Germany. They have got in Germany a different solution than in Latin America, right? Is that something common or is that-
Mariano Gomide de Faria
It is pretty common.You know, like when you have a big company, you allow countries to have their own solution. So C&A a big fashion big fashion group in Brazil. And they use VTEX for many, many years. Und they outgrow their Commerce-office in the world. So now we are seeing the opposite. Like many companies starting us in in of the of the countries and exporting VTEX to other counties. And it's interesting because the best practice of e-Commerce, digital channels, B2B channels, it is actually commoditizing. So people believe that, oh, I am unique am I am in a unique country. For unique conditions. Maybe not. Maybe you're going to see the world and say, oh, the best logistics systems are coming out of Argentina and Romania. The best social media is coming out of Indonesia and China. The best OMS system is coming out of United States. And VTEX operating all the 46 countries, we know what's the best of the best, and we put this in one platform. So we call ourselves a very opinionated software. So we tell our customers how they need to architecture the software and save money and be lean and be fast.
Mariano Gomide de Faria
So it's a different world, different type of software to be around.
Joubin Rahimi
It's not only software, right?
Mariano Gomide de Faria
It's not software anymore. You need to have an opinion. You need to be in the edge of servicing instead of just enabling to provide to your customers what they are asking for.
Joubin Rahimi
Great. Thank you. One last question. You are the co founder of VTEX.
Mariano Gomide de Faria
Yes.
Joubin Rahimi
Really happy to be part of the show here. When was the moment to say, Okay, this is now I want this is now, I want to found VTEX. Was was any tipping moment?
Mariano Gomide de Faria
I was working for a bank. I was 22 years old. It was 25 years ago, I'm 47. And in back there. Brazil was not in the loop of investments. So it was not easy to create a new company.
Joubin Rahimi
Okay, yeah.
Mariano Gomide de Faria
But at the end of the day, we believed in the brazillian engineering. Brazillian engineering is one of the most secret, hidden secrets in the world. For example, nobody knows, but the private jet, most sold in the United States it’s a brazilian private jet.
Joubin Rahimi
Okay, which one?
Mariano Gomide de Faria
It’s a Embraher Phenon 300.
Joubin Rahimi
Is that Embraher? Is it-Brazilian?
Mariano Gomide de Faria
Yeah, Brazil. So, a brazilian engineering has been behind for many, many things in the world. And it was something that I am a mechanical engineer, as I said. So I said, we need to do something that can show the capability of our engineering. And the Internet was booming and then I say: Okay, let’s join the engineering from Brazil plus Internet, and let’s create here a company called VTEX. We struggled for many, many, many years. Just after twelve years of brazilian operation, we added a first, second country, that was Argentina. And after 2012, we concurred like Latin America up to 2016. I believe we were like the big leader there. And then we opened to the US and we opened to Europa.
Joubin Rahimi
and you are going fast
Mariano Gomide de Faria
And then we're going fast and fast. We did our IPO in 2021. July 2021. And it was amazing, IPL. So it was pretty interesting, the journey from a very, very small startup to a huge public company right now. But the spirit of founder-led, the energy, I believe, is still in the company.
Joubin Rahimi
And I have got a last, last question.
Mariano Gomide de Faria
Please, please.
Joubin Rahimi
So in Germany, I go into agencies and companies. So we're thinking about how we can be better for our clients what is really needed. One Part is that the clients want to have got reliable agencies and it service companies where they can act with. So you need local presence. Where everything is produced, it really doesn't matter. Pricing doesn't matter, but where... FIrst data, security things, but it doesn't matter. So we went to Eastern Europe, we went to India, so so Germany at all. So we looked at Thailand, Vietnam, Malaysia. So we have several of these countries also development hubs and now my question is, after looking also to Africa, we didn't look at Latin America or Brazil. And you said it's a best hidden secret. Should we move with a development unit to Brazil?
Mariano Gomide de Faria
I believe there are five big regions in the world where engineering have the asset, the amount of people being formed by universities. We have Indien, China und Russia as the biggest regions. Then we have Eastern Europe and Latinamerika. Eastern Europe, around 300. 000 engineers, Lateinamerika, around 280. 000 engineers a a year. And because of the geopolitics, in the last 5, 10 years, all the four big regions are outdated. So desperate, the world is looking for a safe harbour, where you have almost unlimited resources so you can use. And that's Latin America. And Brazil, by being the biggest country of Latin America
Joubin Rahimi
The most stable country.
Mariano Gomide de Faria
Yeah, can lead the way in a safe shore. Because Brazil and Latin America has a lot of bad things. But one good thing: We don't like war. We never been into war. And we are pretty safe. There is no earthquake. So you know, because we were forgotten by the world, now is a really amazing place where where you can deploy development. You can really have high level Engineering in a very affordable way and the people have grips. and passion. Passion, Grit, – „Kreativ-engineerie, i call.
Mariano Gomide de Faria
AWS, Meta, Google, all the big ones are hiring thousands of brazilians, Argentinians, Colombians right now. So I believe that you should see it. And there are many small companies that you can buy. So Accenture, the leading unit of Accenture in the world for commerce right now, is a brazilian company that they bought. WPP, the same the leading company for them in the world for e-commerce is a brazilian company. So many of the bigger size in the world is buying small companies and developing from the grounds in Latin America. So you should definitely take a look.
Joubin Rahimi
You too. You too, yes. Thank you for all the insights.
Mariano Gomide de Faria
it's a pleasure.
Joubin Rahimi
That's very, very valuable. Having the outside view of you helps everyone here to make better decisions.
Mariano Gomide de Faria
And thank you. Thank you. It's an honor to be here. Amazing ecosystems that i am just realizing you have here.
Joubin Rahimi
The funny thing is here, the hamburgers, so the people who are living here, don't like the OMR because it's too fancy, too loud, too many people. I think that.
Mariano Gomide de Faria
We love loud people
Joubin Rahimi
Thank you so much