Packitoo HIPE

Packhelp's record fundraising, or why should you learn from printers?

Packhelp, a major player in Web-to-Pack, raises 40 million euros!

This was the news at the end of November. Packhelp has (again) raised funds. And this time, they are announcing 40 million euros!

To help you understand, here's what we can tell you about Packhelp:

Created in 2015, Packhelp is a Web-to-Pack specialist.
Has 250 employees (and probably double that within 3 years!)
Announces 50,000 customers in around thirty countries! That is on average nearly 10,000 new customers each year!
Designated as the fastest-growing technology company in Central Europe in 2020 in Deloitte Technology's Fast 50 ranking
Does not disclose the number of suppliers in their "marketplace"; we assume that the bulk of their community comes from Eastern Europe, with an aggressive price position for Western European customers.
Unknown revenues, but according to our estimates, Packhelp should generate around 1 million euros in monthly turnover with double- or even triple-digit growth.

What are they going to do with these 40 million? Why does this affect you!

Innovate and expand their product offering
More products, more choices and a strong focus on "eco-designed" products. This is how Packhelp plans to retain and attract tens of thousands of new customers.

Continue their development in Europe and the United Kingdom
We told you, they are coming. Fast and strong. Better yet, they are already here. We are sure you have already received a request from them to see if you can manufacture for them. What did you answer?

Build services for large companies
We knew Packhelp was very strong for small series for startups and SMEs. But they are not going to stop there. And attacking the mid-sized (ETI) and large corporate market is definitely in their strategy. They are already announcing that they work with multinationals such as H&M and Uber Eats.

Invest twice as much in technology
They are convinced that their technology-first approach will allow them to attract more innovative customers and suppliers. And only automation enables hyper-acceleration.

For us, these signals should push you to react before it is too late. Remember the story of the emergence of Web-to-Print.

Looking back at the rise of Web-to-Print?

Over the last 2 decades, the printing industry has undergone a major transformation and has seen its economy disrupted by Web-to-Print players. Today, their model has become the norm. Today, nearly 25% of the commercial printing market is 100% online. That's more than 2.5 billion euros in turnover on a European scale.

How did we get here? How was Web-to-Print able to establish itself so quickly in the competitive printing market?

In the 90s, printing manufacturers were not concerned about the Internet.  The potential of this new sales channel was then misunderstood and underestimated, especially as printers thought their products were too technical to be sold online. At the timeprinting a document was not a smooth process and required a certain amount of willingness and involvement on the part of the buyer. Only a few visionaries then thought that it would one day be possible to order print from a website. 

In the 2000s, the printing sector suffered a crisis with an increasing proportion of its customers' advertising investments being diverted to the Web (especially emailing). Printers then engaged in a fratricidal price war which led to the bankruptcy of many players in the sector.

Despite the perilous situation in which printers found themselves, they still did not perceive the Web as an interesting sales channel and believed that those who embarked on it were heading straight for the wall. However, it was in these years that online printing experienced its first successes with a few pioneering printers initially offering small print runs to their customers.

In the years that followed, Web-to-Print became more widespread and established itself as the new norm.

The competitive advantages that enabled the rise of the Web-to-Print giants

Vistaprint, Exaprint, Helloprint, and many others have disrupted the printing industry. They relied on the industrial base of printing partners to eventually become printers themselves.

They consolidated the market so quickly because the contribution of web technologies to the printing sector has been more than significant:

Simplicity/speed of purchase for the customer

More autonomous and flexible customers, while paradoxically feeling more supported

A customer base without geographical boundaries

Instant payment of orders on an E-Commerce site, avoiding payment defaults and simplifying cash flow  

Automated production processes that enable cost reduction

An expansive logic, allowing them to invest in increasingly efficient technologies

The impersonality of the Internet, which has enabled a massive consolidation of the market by transforming small independent printers into subcontractors

Is printing history repeating itself?

With massive fundraising, players like Packhelp are investing heavily in acquiring new customers and offering very aggressive prices, sometimes to the point of strangling their suppliers. Industrial companies like you.

And they are not alone: Pack.ly, Pixar Printing, Labelprint24, Self Packaging, and many others are attacking your market share. And they are moving very fast.

Everything suggests that Web-to-Pack is the future of Web-to-Print. One is exactly like the other in the early 2000s, with packaging manufacturers minimizing the impact that the Internet can have on their business. Packaging manufacturers must therefore react now to avoid finding themselves in the same situation as some traditional printers, who are now almost exclusively subcontractors of Web-to-Print printers.

We are in a time of threats and opportunities for the packaging industry:

If there is one thing we agree on with Packhelp, it is that we are living "one of the most turbulent periods in the recent history of the packaging industry. The industry is experiencing one of the most significant waves of disruption in decades [...]. There has never been a better time to be part of an innovative packaging company."

On the other hand, we believe that you, manufacturers, should not let E-tailers dictate the laws and conditions of innovation in the packaging business. You must take part in this disruption by investing in the technologies, processes, and skills that will enable you to acquire and retain your customers with a complete online experience that is consistent with your daily operations.

In an upcoming article, we will present a summary of what we consider to be your best response to this rise – which we believe is inevitable – of Web-to-Pack.

While waiting for this article, our team of experts is at your disposal to advise you and help you make a transition of your activity online.