Digitalization is a very important topic not only in the chemical industry as a whole, but also in chemical distribution. As Wolfgang Falter states in his article: Customers increasingly search online and initiate digital contacts via websites, social networks, search engines and commercial platforms. Those distributors that they do not find online are no longer present in the relevant markets.

This development has led to many discussions within the chemical distribution industry on how best to address the issue of digitalization.

CHEManager asked executives and industry experts familiar with the development of e-commerce in chemical distribution to share their opinion on what needs to be done in order to survive in an increasingly competitive environment and how to deal with a possible disruption caused by new digital developments. We wanted to know:

Will e-commerce platforms in chemical distribution be more successful today than CheMatch, ChemSystems, ChemConnect et. al. were 20 years ago?

David Cahn: Yes. The e-commerce platforms for the chemical industry have evolved from platforms to “marketplaces.” These new marketplaces such as Chemondis, Kemgo, Pinpools, and others, will be more successful than in the past for a few reasons. First, earlier platforms did not support the complex requirements of the back-end fulfillment needs between the platforms and the specific digital supply networks, such as Elemica. Digital supply networks that integrate the suppliers, buyers, and logistics service providers enable the tracking and tracing from the order placement through the shipment from the manufacturer to the customer. These new marketplaces also support the sophisticated contract specific pricing needs from each of the manufacturers and material specification needs of each buyer.

"Customers are Looking for
an “Amazon” Experience"
David Cahn, Director Global Marketing, Elemica

This was much harder in the past. Finally, the buyer, who is more digitally aware, has also matured in their buying characteristics. Today, the typical chemical buyer is ordering products in amounts of 50K euros or dollars for an average shipment which was an uncomfortable amount to procure in the earlier days of e-commerce. As a result, buyers in the past preferred to order more closely with the customer service representative. Today, they are looking for a more “amazon” experience where they can order any product online and can track it from order through delivery and payment. These millennial type buyers want the same experience with their direct materials purchases that they can receive from the consumer purchases.