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?

Jürgen Rietschle: The difference to the platforms from 20 years ago is that the chemical industry itself had established these internet portals without sufficiently questioning the success and specific competences of the chemical distribution business model. An oversupply and the lack of a recognizable added value led to a merger and consolidation phase. Meanwhile, there are other market participants such as Alibaba or Amazon that have expanded the business model of internet platforms coming from the B2C area by new options and a correspondingly clearer positioning to their core competence. The number of digital industrial platforms has started to grow dramatically once again; we can naturally assume that the digital market of classical chemical distribution will extract its market share, but it is important that the mostly small- and medium-sized industrial customer can recognize the added value of a platform in all of this.

Who in the chemical supply chain from principal to distributor, logistics provider, online retailer, start-up to customer will be winners/losers in online distribution?

"Business Models
Need to Be Questioned"
Jürgen Rietschle, Managing director, Bodo Möller Chemie

  Jürgen Rietschle: An obvious issue is to what extent a platform can contribute to the optimization of the cost structure, and a corresponding answer is found rather in the area of commodities (key or basic chemicals), as it is often difficult here to find a differentiation characteristic. Chemical distribution is certainly also called upon to question its business models and create differences by becoming agile. We have therefore adjusted our activities to market conditions, specializing on segments. Our clear positioning and the development of the most varied additional services such as our “Adhesive Competence Center”, for example, allows us to make knowledge-intensive areas like bonding even more extensively accessible to our customers by means of digitalization than our industrial competence.

What do you (either alone or with partners) plan regarding online distribution?

Jürgen Rietschle: For us, digital options and networking with our customers remain in the foreground. A completely new online presence that already contains many elements will keep expanding our digital presence as solution provider while emphasizing this orientation. It will become apparent which individual businesses we will also market online even stronger in the future. Of course, the business models of chemical distribution will continue to change digitally, but we should not forget that many complex legal requirements or the illegal procurement of chemicals are often more difficult to control digitally.