Sep.25 -- Robert Alvarez, chief financial officer and chief operating officer at BigCcommerce Pty Ltd., discusses the impact that the Covid-19 pandemic has had on the e-commerce platform. He speaks on "Bloomberg Technology."
- How has the pandemic impacted demand among your customers and on your platforms?
ROBERT ALVAREZ: Yeah, Emily, you know, it's e-commerce was accelerating even before COVID. And I think in the March timeframe we just saw just a significant spike in transactions really, across the board, in every major category of our merchants. And that surge has only continued. So I think that the shift to online was accelerating. People thought we would be accelerating this year. No one thought it would be accelerating to the degree that we're seeing it right now.
- Now, you're one of just two platforms that allows shoppers to buy directly on Instagram and Facebook. That said, even though we all thought that shopping on Instagram on Facebook could be a huge opportunity, it hasn't grown as quickly as some expected. How much traffic is that actually driving?
ROBERT ALVAREZ: I'd say it's still early days, but social commerce is going to be an important way people consume and buy products. We want to be in the forefront of that. I think the better the user experience, the better the adoption. And I think with our latest integration with Facebook and Instagram, the ability to buy and check out on Instagram, without having to be redirected to another site, is another way to improve that experience. And that experience is going to be improved pretty rapidly we believe over time. And you know, that consumer behavior is driving online transactions. That experience that we can provide or help our merchants provide to their merchants, enabling that user experience that makes it really easy and seamless to see their products, buy their products.
Social commerce is a big way we help merchants do that, by selling on marketplaces like Amazon and eBay and others, is a way we do that. So the more ways that consumers look for products, and when a consumer buy products, you know, BigCommerce is going to be in the forefront of that.
- What's your outlook for the e-commerce market post pandemic? How much shopping that's moved online goes back offline? It has to be a certain subset.
ROBERT ALVAREZ: Yeah, Emily, it's really interesting. You know, pre-COVID, it took over 20 years for e-commerce to be 10% of retail, and that was 2017. McKinsey published a report end of '19, it was 15% of total retail. I think in the months since COVID, it's in the mid 30s. So it's almost been like a 10 year acceleration, in terms of how much e-commerce is driving as a percentage of total retail. Listen, it's hard to predict what it's going to be, what the new normal is going to be. I think everyone recognizes that there's been a shift. The consumer buying experiences have shifted online. Experiences are more normal today than ever before.
I think when things get to back to normal, or as normal as maybe they were before, I think there is going to be a permanent shift to some degree in terms of consumer behavior, consumer expectations, and technology platforms, like BigCommerce. And our ability to really drive even further adoption, it's really difficult to tell, but we do know that e-commerce is only going to continue to accelerate. At some point, it's going to be 30%, 40%, 50%, of total retail, exactly when that will be, I don't know. But that's definitely where the e-commerce market is headed.
- Now, BigCommerce had a big successful IPO last month. Shares have surged up to 400%. Since then, they've come back down in recent weeks. We've been having this conversation about pricing, about valuations. There's critics saying valuations are too high. What do you think?
ROBERT ALVAREZ: Yeah, you know, the IPO for us was great, because we-- you know, in that process, we could ensure that the shares we were selling, we could put in the hands of investors that we thought were long term minded, really had conviction, and our story believed in what we were doing. You know, in the performance since the IPO, it's been great to see. It's been great to see how well we've done, but the focus really is around our products and our merchants. It's still early days for BigCommerce. The opportunity for us to grow is really exciting, and I tell all of our employees all the time, you know, what got us here is a focus on our customers, and a focus on each other, and our partners. And that really needs to be the focus right now. It's very distracting otherwise.