Still in its relative infancy, the e-commerce industry is continually evolving and finding new methods to provide the best and most efficient ways to serve consumers in the online retail space.
Payment Expert spoke to Emeka Nwosu, Senior Vice President of Commerce Solutions Engineering at VTEX, discussing how composable commerce can open up the next phase of e-commerce growth, the rise of super app operators and if this could possibly oversaturate the market.
Payment Expert: Firstly Emeka, for the uninitiated, can you briefly explain who VTEX is and its role in the e-commerce space?
Emeka Nwosu: VTEX is the enterprise digital commerce platform that helps brands smarten up their investments. Our platform is composable and complete – meaning it helps brands rapidly migrate from legacy systems, connect their entire value chain, and make inventory and fulfilment a strength.
We work with over 2,600 B2C and B2B customers, including Carrefour, Colgate, Motorola, and Sony, and have over 3,400 active online stores in 38 countries. We help brands unify their digital presence through faster and more secure digital commerce technology.
PE: What are some of the key benefits of embedding composable commerce to enhance e-commerce activities?
EN: Composable commerce empowers businesses to be more agile, cost-efficient, customer-centric, and competitive in today’s rapidly evolving digital landscape. It enables them to harness the benefits of modular and flexible architecture while delivering exceptional customer experiences.
It allows brands to do more than just have a website where they sell products or an Instagram account where they promote their brand; it gives them the tools to unify their business and expand into new channels to reach new customers.
There’s also what we call pragmatic composability – an approach to digital commerce technology where brands embrace composable commerce while balancing technical upside with business outcomes.
Instead of replacing an entire system, the pragmatic composability approach advocates for modernising your tech stack and reducing maintenance costs by thoughtfully composing best-of-breed components and custom services alongside native commerce platform services.
A central part of a brand’s strategy for profitability has to be focused on optimising the cost of their digital commerce stack while still finding a solution that enables them to reach new customers most effectively.
Businesses must critically assess what is most important to their success and compose technology where it offers a clear competitive advantage to streamline operations and achieve long-term success in the dynamic ecommerce landscape.
PE: What do you believe are some of the main challenges e-commerce businesses face today and how is VTEX helping to provide solutions?
EN: There are a few challenges – profitability, growth, and customer experience, among them – that businesses are concerned about. We’re in the era of profitability, where brands are being conscious of margins, and refocusing their efforts on maintaining a profitable business model.
For a long time, many brands prioritised growth at all costs – even if it meant running at a loss – but are now prioritising finding that sweet spot to make a profit again and enable sustainable business growth.
Customers are a central part of growth and profit, and as such, brands are increasingly pressed to meet their expectations. It’s no secret that consumers have come to have very high expectations for a convenient, quick, and frictionless experience, whether at the grocery store or shopping for shoes online. There is constant pressure on brands to offer the latest payment method or the fastest shipping possible – but many brands struggle to find the right balance of relevant services.
We help brands find the right combination of technologies that suit their needs. Our customers are generally enterprise-level brands, so with a pragmatic approach, we help businesses build a custom stack that when combined with out-of-the-box features reduce their costs and find creative new ways to put them in the right channels for their customers through tools like live shopping or conversational commerce experiences.
Some brands, like Cartamundi (who makes Bicycle Playing Cards), wanted to embrace a direct-to-consumer (DTC) selling model but didn’t have a unified commerce stack on the back end to support sales across multiple countries, so we helped them accomplish that goal.
PE: Have you observed the rise of the Super App (Apple, Amazon, etc.) and how will this affect the e-commerce sector in the long-term?
EN: Absolutely. We’ve all become very used to having everything we need all in one device in our pocket. From the smallest businesses to the largest corporations, brands want to be part of that – meaning that every app out there competes for valuable space and attention on a consumer’s phone.
Apps like Amazon are a great example of brands giving consumers a lot of useful features all in one place. They can do all their shopping and then watch short-form video content while still in the app – which is incredibly effective at keeping customers engaged.
We’re seeing others like TikTok try to do this as they increasingly move towards social commerce with their technology that will likely enable users to engage with videos while shopping through a TikTok-native marketplace.
In the long term, I think there will always be a few super apps that lead the market, but I think most brands won’t need to reach the size of a super app to be successful.
Obviously, there are players like Twitter (or “X” as it’s now called) that are shifting more towards super app capabilities, but I think most brands won’t want or need to reach that size to still grow and be profitable.
Super apps are very popular in other countries worldwide – enabled in part by a more connected payments ecosystem – whereas, in the US, brands are still testing the waters to figure out the most effective way to operate apps that offer these capabilities.
PE: Lastly Emeka, and thank you for your time, do you anticipate e-commerce to become oversaturated or will it flourish in the next decade?
EN: I think the e-commerce industry will continue to grow in the coming decade; consumers love shopping online for everything now, and that is unlikely to change.
You have to remember that ecommerce is still a relatively young part of the broader retail industry. At most, it’s only about 30 years old, and businesses are still figuring out what works best as new technology emerges. I think what will change is how brands prioritise where they plug into new technology.
There will always be experimentation and innovation, but I expect brands will increasingly realise that just because a flashy new technology or app hits the market, it doesn’t mean they have to use it to stay relevant.
I have high expectations for how brands will innovate and continue to bring creative solutions to their customers that create better experiences for consumers everywhere.