Here are my notes from the interview with the GLBE CEO and CFO Interview at the Morgan Stanley US Financials, Payments & CRE Conference that took place a moment ago.
06/12/2023 10:00 Central Time
Amir Schlachet, CEO
Ofer Koren, CFO
4 ways GLBE helps merchants:
Plug into merchant’s website to guide the transaction
Operational: Localize to the merchant, der-risk transaction by taking care of taxes, fraud,
Optimize the transaction for the merchant and tell them what they should do to optimize the offreing
Demand generation to increase traffic to the product for the merchant
Q Talk thru why you can’t just focus on one of these things.
A Different relative weights that vary from market to market using different payment methods. You need to price it correctly, a low price and good shipping option and bake in sales tax. This required services vary greatly by location. It’s a conversion game, since the shopper has already entered the merchant’s site, so GLBE’s job is to optimize the experience to maximize the number of sale conversions. Helps brands convert sales.
Q Collaborating with GLBE. Has there been any change in interest level?
A Main difference over the past few quarters has been macro pressures by merchants and consumers. GLBE has had to change their sales pitch a little bit to reflect the ways they can help merchants in light of the macro environment. GLBE is able to secure shipping prices from DHL that others cannot because of the level of volume they provide, while optimizing shipping times due to volume.
Q What’s the biggest reason why NOT to use GLBE at the point of sale? Sales Objections?
A Not many, but a few verticals don’t need GLBE, such as food supplements already work well in the US. GLBE actually becomes the merchant of record on behalf of their customers. One of the other angles that are distinct, the Adidas of the world and the super large brands already have their infrastructure (the services that GLBE provides) set up. (Me talking: Sounds like most of their customer companies are small and medium size businesses aka SMBs.) They seldom get a “no, we’re not interested in learning more about this” type of response from companies they pursue as customers. Market is in its early innings and they have a very long runway of high growth for many years.
Q Demand trends across several geographies?
A Demand into Europe is doing much better. Upward trend of consumption in Europe. The US has been at the same level and most of the markets are doing OK. Since the beginning of the year, there’s been more of a level of normality after the pandemic. E-commerce continues to grow.
Q Same store sales.
A Seeing same store sales and geographies that are growing. Seeing better same store sales. Expect to see same store sales increase, land and expand merchants tend to use us as they expand.
Q How to think about Shopify partnership?
A Have had a strategic relationship with SHOP for more than 2 ½ years. This has contributed to our accelerated growth. White label product from GLBE on SHOP with a couple hundred merchants. They believe SHOP Merchant Pro will likely have a significant impact, but safe to assume this will be with the smaller merchants, but not until 2024. No impact expected in 2023.
A GMV it can be a multi-billion dollar service on the SHOP platform. SHOP is putting this pretty high on their agenda, and it gets a prominent place in their communications. GLBE believes this has strategic importance to SHOP over the next few years.
Q Profitability, forecast to be in the mid 40%’s. You are profitable already. What are the primary drivers to margin growth?
A Next 3-5 years to start to see good operational leverage. Will continue to prioritize growth.
Q Quantify uplift in take rate expansion.
A It is a bit early to say. Expect to see some contribution in 2024.