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?

Thorsten Harke: Pure online trading platforms, without the personal service and support that trading companies offer today, will probably achieve a certain market share in certain areas of the B2B sector. Today‘s trading companies, however, are per se already trading platforms “of the real world” that combine a broad product range for customers to save transaction costs for them. On the other hand, consulting and many other services of trading companies for customers at the same time save considerable transaction costs for manufacturers. If products are offered purely online – without consulting and service – these transaction cost savings are considerably lower for customers and suppliers.

"Extensive Services Need to Be
Offered along with Products"

Thorsten Harke, CEO, Harke Group

It will therefore usually not be sufficient simply to post products online. Many products do not sell by themselves, but there are extensive services to offer around the products. Examples range from logistics, which, especially in the chemicals sector in form of dangerous goods logistics, often needs extensive specialist and market knowledge, up to application consulting for specialty products. As a result, chemical trading companies with decades of specialist and market knowledge are much better positioned to offer customers the corresponding services as a package than pure online platforms that cannot offer any further services tailored to the products. What retail companies partially have lacked so far was an internet presence to offer their services online. However, this can be retrofitted using online shop systems, which are meanwhile readily available on the market. This is also our strategy. Besides our online catalogue, which is available since many years already, we plan to go online with our e-commerce shop, comprising our full supply program, before the end of this year. If it runs smoothly, we may open this shop also to others and expand our platform with it.