Experts Statements: Sebastian Brenner, Chemondis

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?

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?

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

Sebastian Brenner: Looking at B2C, digitalization has led to major changes for both vendors and customers. Customers profit from higher information transparency about prices and potential vendors, as well as reduced efforts to purchase online. Vendors have dramatically increased their market reach and at the same time reduced their operational costs. They are now able to service customers all around the globe with even zero physical stores. We expect that this will also be the case for B2B in general and for the chemical industry in particular. In view of the current situation, the industry is very offline-focused and lacks transparency. It requires big-time investments on the buyer side and high selling costs with a lot of market knowledge on the seller side.

Digital marketplaces like Chemondis make more information easily available for both sides. For chemical suppliers this means, just like in B2C, they can service global customers at lower costs. Less traveling, reduced sales and marketing efforts. With a highly increased reach through global marketplace networks, new buyers can be found online with virtually no cost. Both production and margins can be planned more effectively in the long run, with negotiations taking place online as well, documentation becomes faster and easier. The focus can shift towards real value-adding activities.

For chemical buyers there are two major advantages of digitalization: the first is increased transparency. With information about potential (or alternative) suppliers, availabilities and customary prices, buyers can take better-informed decisions and enter negotiations more consciously. Also, with all relevant suppliers being listed at one marketplace, the costs for research, phone calls and inquiries are reduced significantly.

At Chemondis we are sure that the time has come for digital marketplaces for the chemical industry. We are excited to be part of it.