Digital transformation of B2B business in chemical industry

Chemical companies in the value chain, including commodity chemicals, specialty chemicals and CPG, are manufacturing, purchasing and selling chemicals for their products and end-customer applications. These B2B transactions are complex in terms of price transparency, supply chain reliability, basic chemistry and application knowledge of these products, and regulatory standards imposed by global regulators. Although the company is investing in ERP system to manage internal inventory, suppliers and procurement processes, these transactions are very inefficient, completely dependent on personal contact, long sales cycle, high marketing and sales costs, and written records are left in these transactions.

Due to the backward digital transformation, the chemical industry has begun to invest in the technology of managing its internal assets (Internet of things, etc.), product development (ELN, cloud infrastructure, etc.) and customer participation (CRM, B2B business, etc.). Technology, business practice and customer expectations are rapidly raising the threshold of B2B practice in the industry. Chemical enterprises must adopt a wide range of digital processes and practices to more effectively marketing and contact customers. The industry is implementing these initiatives across multiple dimensions to scale:

Independent operation: large chemical enterprises invest and develop digital e-commerce platform for B2B operation. BASF AG is forming a joint venture with other German chemical companies and software manufacturers sap to create an electronic market for the chemical and pharmaceutical industry. Longsheng recently stripped chemondis, a chemical e-commerce enterprise based on Cologne, and Evonik industry has entered this field with one twochem. UNIVAR relies on the company’s e-commerce platform MyUnivar.com . Labnetwork is a global e-commerce platform for connecting buyers and sellers of chemical reagents. Sigma Aldrich has 300000 products and expands its business globally.

Use of third-party e-commerce platform: because of its large scale, good marketing and high cost-effective service, most chemical enterprises tend to use the third-party e-commerce platform. Pintools is an e-commerce portal for the European paint and paint market. Knowde is an online marketing platform focusing on chemical raw materials. Alibaba has established the chemical e-commerce portal 1688.com. Molbase is a comprehensive chemical e-commerce platform, which makes the trade of chemical industry more transparent and efficient. Molecules enable researchers to explore unknown chemical and biological spaces and provide more effective drug discovery procedures. Zageno is a multi supplier online market for life sciences products, saving more time for science by simplifying the procurement process. Specialchem is a widely chosen source of chemicals and materials to help formula makers, specification providers and chemical and material suppliers connect.

Joint venture: chemical enterprises can also use small and medium-sized enterprises in chemical industry to cooperate in online business. This helps enterprises cooperate in the global B2B e-commerce market to obtain opportunities for communication, resource allocation and common development. Elemica has developed a cloud based network center to connect the company’s ERP software and manages about $600billion of trade between chemical companies annually through cloud based networks. Agilis chemical industry is a commercial platform for chemical manufacturers, dealers and buyers. UL prospector provides accurate and reliable technical information for hundreds of thousands of products from suppliers around the world. M-base is a leading supplier of material databases, material information systems and product information systems.

With e-commerce subverting B2C transactions, digital transformation will also subvert B2B business in chemical industry, which brings efficiency through better price transparency, reliability of supply chain, basic chemical knowledge and regulatory guidance for terminal application. Enterprises and platforms must be part of these ecosystems in order to play a role in the R & D and procurement value chain of chemical industry.

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