Today we publish an interview with Viacheslav Kravchuk, CEO of Atwix and Tim Hahn, CEO of one of the biggest German Magento Enterprise Partner, netz98, talking about global eCommerce, Meet Magento, and how European companies can find their market fit internationally.
Tim, for the two or three persons worldwide not knowing netz98, what’s your business and your history?
Tim: netz98 is an eCommerce agency and Magento Enterprise Partner from Germany and before you ask: it’s pronounced like “net” in English. When we started business back in 1998, we haven’t had international partners and clients in mind … and never imagined that we could work with them someday. From a small agency doing everything around the web and digital, we then focused on eCommerce. In 2008 we were one of the first agencies using Magento and nowadays, as biggest Magento partner in Germany, we’re solely focusing on the best and most versatile eCommerce software in the market. Because of this long history we didn’t have the courage to change our name ;)
Among the Magento partners you are known for the high quality standards and rather complex projects. Is this just an image or the real netz98?
Tim: I think today we have a strong affinity for challenging eCommerce projects … sometimes more than it’s good for our work-life balance. But some say there is no such thing for entrepreneurs. And on the other hand you need challenges to improve yourself. When we started with Magento the software wasn’t ready at all and hardly customized for the requirements of German retailers. So we did our best to fill the gap. Our development team was very passionate, worked hard on the code and gained a deep understanding of Magento. The word spread around and there was the next client with more sophisticated requirements. This happened over and over again. Since Magento is one of the most flexible and scalable eCommerce software systems, we can use it for many other tasks like self service or logistic platforms in the industry sector.
What was the reason for your engagement with the Meet Magento New York, what makes this event so special/interesting in your eyes?
Viacheslav: I would say that we’ve got involved into MMNY quite spontaneously. One day my friend and owner of interactiv4, Ignacio Riesco, just asked me if I’d like to do the event together with him this year. Atwix already had experience co-organising Meet Magento Ukraine and I’ve had an idea what it is like. However, MMNY is quite different.
First of all – the location. It is the only Meet Magento event in the USA and the only business oriented Magento conference there except Magento Imagine. New York is a strategic place for eCommerce and merchants that you will see at this event are incomparable to any other location. In addition, New York is also the most expensive location where any Meet Magento event has ever been held. Second – the format. I believe we’re making the first conference in Magento history that is solely business oriented. There will not be a technical track at all. This is a quite risky move, as on average, over 70% of Meet Magento audience are technical people. All of this together makes up a great challenge, which we’re taking on our key market, as most of our clients are US-based.
Tim: Since this is the first Magento conference solely focusing on commerce and business, I suppose there will be more chances to gather some intel about actual requirements and developments in the US market.
Talking about Magento, how do you both think, will Magento develop in the next months or few years?
Viacheslav: After the acquisition by Permira and release of Magento 2 last year, we can see something that was not so clearly visible in the last few years – the Vision. This vision is now very strong and is additionally supported by actions and new team members that Permira has brought in.
Tim: Because of Permira, now Magento has a much wider scope of action than there was at the times of eBay. And they are putting this to use with much inspiration, energy and expertise. Within just one year, Magento has completely revised its portfolio and has developed a considerable range of services around its new eCommerce software Magento 2: Magento Digital. An omnichannel solution is now included as well as an eCommerce analytics tool and many more innovative services. Having started as a pure eCommerce platform, Magento has now become one integrated suite for the entire eCommerce business. As a next step, some verticals will probably be added, specialized features like industry solutions. Magento will successfully defend its leadership and will advance even further into the enterprise segment.
What’s the background of your story/shared history?
Tim: We are both devoted to Magento more or less since they started. Due to the strong open source and community character of Magento, we have come across each other once in a while – either on real events or on Github, developing Magento. However, the first extended exchange took place in 2012…
Viacheslav: And coincidentally on the US soil, at the second Magento Imagine conference. I remember we had a very good time with Ralf Lieser, who was heading QA at netz98 back then. Since then, we have met a number of times in many different places and we were always in touch, seeing both of our companies evolve. But it was just this year when we really thought about joining our forces in some kind of synergy.
Why are you teaming up now? What are you working on
Tim: We are currently working together on a fairly large and complex Magento Enterprise 2 project in the automotive sector. Our client really sets high standards concerning quality and performance, and we put much effort in requirements engineering and the perfect planning. But as it sometimes happens, even the best plans can go astray. We had to react quickly and sought an uncomplicated yet highly professional partner … so there was practically only one choice :)
Viacheslav: Thus, it was an ideal case to start our cooperation. And I am very happy that this project is for such a nice brand. We can’t tell publicly what brand it is, but I’ve used tires of this brand on my car and those were among the best ones I’ve ever had :)
What you think about the US market? Are there opportunities for European eCommerce agencies?
Viacheslav: I love the US market! Most of Atwix clients are in the USA and this is where most of my clients were from back when I was freelancing. What specifically fascinates me is the openness of people in the US while doing business. It doesn’t take long at all to start working with a US company and they are very open to new ideas, innovations and experiments. Possibly, it is a bit different with huge corporations, but most SMBs are like that. And this is actually what opens the door for European eCommerce agencies.
Tim: In the US, the eCommerce is more important and has a greater maturity than in Europe. This becomes evident not least in the now declining growth rates. And if the growth potential of a market is finally being exhausted, your only chance is to surpass your competitors. That’s why I believe in a huge demand for high-quality and technically sophisticated eCommerce solutions in the US market. Scalable solutions that can be adjusted and are able to keep pace with company goals. In this particular field, European Magento agencies have a lot to offer.
And which sector should you focus on: B2C or B2B? or is this an irrelevant distinction?
Tim: This distinction often is simply too undifferentiated and also obstructs the focus on individual requirements. Relevant distinctive features are rather the size of the company or the economic sector.
Viacheslav: We work with both B2B and B2C businesses and I don’t see any major difference in the approaches. I guess that company’s focus should rely more on their strategy and internal resources, the market in the US is big enough and can accommodate either one… Or both.
What are the current challenges for US Clients, Retailer or Wholesale and Manufacturers?
Viacheslav: The challenges for retailers have always been the same – trying to get ahead of the competition and innovate in a positive for their financial numbers way. We see trends come and go every year, sometimes it is really a bet, and as a retailer you can never be sure what exactly would work for your customers and your business model. My answer to this is research, constant innovation and testing.
Tim: We currently see the greatest need for high-quality ecommerce solutions with companies making a turnover of about 10 million US dollars or more in ecommerce. While in Germany there are quite a lot medium sized businesses that become world leaders in certain niches, the market situation in the US is often characterized by a strong competition between larger manufacturers – and that competition is more and more often decided by the better technology. Furthermore, the market for online pureplayer is considerably larger. And everyone who sets up his entire business solely on an ecommerce platform, is dependent on a scalable, stable and absolutely high-quality solution.
What are the significant characteristics and demands of American clients?
Viacheslav: Besides what Tim already said, American clients are often under a constant pressure and the time there flies very quickly. This is how business is done in the USA – everyone has to work at a constant quick pace as the market is very competitive. This in turn demands a certain agility from their business partners like us – agencies.
How do and how should European Magento Partners / eCommerce companies differentiate themselves from the US Companies?
Viacheslav: I think that nowadays this difference is becoming blurry. Many bigger US-based agencies now have development offices in Europe and many European companies open sales offices in the US. I guess this globalization will erase the difference quickly in the coming years and put it into the sphere of individual qualities of each company rather than some common characteristics of the countries. For example, if we look at the traditional software development business – nobody really can see a difference and nobody actually cares where it was developed.
Tim: That’s right, we shouldn’t focus for all it’s worth on creating some fictional USPs to convince our clients. Getting our job done in time, in budget and with a good quality and satisfying our customers surely is the better way.