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

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

It was the news at the end of November. Packhelp has (once again) raised funds. And this time, they've announced 40 million euros!

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

- Founded in 2015, Packhelp is one of the world's leading Web-to-Pack specialists
- 250 employees (and probably double that number within 3 years!)
- Announces 50,000 customers in some 30 countries! That's an average of almost 10,000 new customers every year!
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Named 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 pricing position for Western European customers.
- Unknown revenues, but according to our estimates, Packhelp should achieve around 1 million euros in monthly sales, with growth in the double or even triple digits.

What are they going to do with these 40 million? Why does it impact you!

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

Pursue their development in Europe and the UK
We told you, they're coming. Fast and furious. Better still, they're already here. We're sure you've already received a request from them to see if you can manufacture for them. What did you tell them?

Building services for large companies
We knew Packhelp was very good at small series for start-ups and SMEs. But they're not going to stop there. Attacking the market of mid-sized companies and large corporations is definitely part of their strategy. They have already announced that they are working with multinationals such as H&M and Uber Eats.

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

In our view, these signals should prompt you to react before it's too late. Remember the story of the emergence of Web-to-Print.

A look back at the advent of Web-to-Print?

Over the past 2 decades, the printing industry has undergone a major transformation, and 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 sales across Europe.

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

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

In the 2000s, the printing industry went through a crisis, with an ever-increasing proportion of their customers' advertising spend shifting to the Web (particularly emailing). As a result, printers engaged in a fratricidal price war that led to the bankruptcy of many players in the industry.

Despite the perilous situation in which printers found themselves, they still didn't see the Web as an attractive sales channel, and felt that those who did were heading for disaster. However, it was in these years that online printing enjoyed its first successes, with a few forward-thinking printers initially offering small print runs to their customers.

In the years that followed, Web-to-Print democratized and became the new standard.

The competitive advantages that have enabled 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 finally become printers.

If they have consolidated the market so quickly, it's because the contribution of Web technologies to the printing sector has been more than significant:

- Ease/quickness of purchase for the customer

- Customers are more autonomous and flexible, yet paradoxically feel more supported.

- A customer base that knows no geographical boundaries

- Instant payment of orders on an e-commerce site, avoiding payment defaults and simplifying cash flow  

- Automated production processes cut costs

- An expansive rationale, enabling them to invest in increasingly high-performance technologies

- The impersonalization of the Internet, which has led to massive market consolidation, transforming small independent printers into subcontractors.

Is the history of printing repeating itself?

With the help of major fund-raising campaigns, players like Packhelp are investing heavily in the acquisition of new customers and offering very aggressive prices, even if this means strangling their suppliers. Manufacturers like you.

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

There's every reason to believe that Web-to-Pack is the future of Web-to-Print. One resembles the other in every way in the early 2000s, with packaging manufacturers downplaying the impact the Internet can have on their business. Packaging manufacturers therefore need to react now to avoid finding themselves in the same situation as some traditional printers, who today find themselves almost exclusively subcontractors to Web-to-Printers.

This is a time of threats and opportunities for the packaging industry:

If there's one thing we agree with Packhelp on, it's that we're living through "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, as manufacturers, must not let e-tailers dictate the laws and conditions of packaging innovation. 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 day-to-day operations.

In a forthcoming article, we'll be giving you a summary of what we consider to be your best response to the - in our opinion inevitable - rise of Web-to-Pack.

In the meantime, our team of experts is here to advise you and help you transition your business online.