The digital market should have opportunities in chemical

Close to customers is a long-standing tenet of the chemical industry. For decades, “close to customers”, “understand customer needs” or “provide unique value proposition” have dominated the marketing and sales discussion in the industry. However, if we carefully observe the market entry strategies of most chemical enterprises, we will find that the main channels are key account managers, sales representatives and third-party distributors. Digital interaction and implementation model, e-commerce and digital value proposition only exist as proof of concept, pilot or niche channels.

Covid-19 is the first test of digital customer interaction ability in chemical industry. It subverts the traditional channel centered on the entity interaction between sales representatives and key account managers, and makes the company into a digital dilemma. Most chemical companies are able to use digital tools such as Microsoft team, Skype, Google meet or zoom to interact with customers, and online sales have increased.

So, has the enterprise passed the test? Over time, whether the chemical industry can continue to develop its interaction with customers depends on whether they accept further digitalization.

Digital market: another channel or market subverter?

Generally speaking, real market chaos is triggered by new entrants, not by existing ones. In the chemical industry, the past decade has witnessed a significant increase in the number of digital markets. The term covers different models that often evolve over time, such as seller’s platforms, buyer aggregators, shopping center operators, directories, comparison sites, product search experts, and even online distributors with product ownership. Many of these markets were initially focused on China’s chemical market, but in recent years, more and more digital markets have begun to face the chemical markets in Europe and the United States.

We have reason to question whether these markets are a real subversive or just another channel. Yes, record mix. Many third-party digital markets are transient, unable to expand beyond a very small customer base or develop value proposition. In addition, the consortium market of asset-backed chemical companies is facing a series of problems, from the alignment of governance and operation direction to financing.  

Let’s take a look at the failed business model of the market. However, we ignore one point: these start-ups, the chemical industry, constantly bring forth new ideas, test customers’ preferences and absorb different procurement and contact models, and set new standards to promote the needs of buyers and sellers.