Covestro powers ahead with digitalization revolution in China market
Covestro, a world-leading producer and supplier of polymers based in Germany, last month launched an online flagship store on Chinese internet giant Alibaba — as a further step towards promoting its digitalization strategy in China. The company opened the flagship store on Alibaba’s online platform 1688.com.
On the website, Covestro offers its high-tech polymer materials, such as polycarbonate and pre-products for polyurethane foams, coatings and adhesives.
Today, the world has entered the digital revolution era. This latest global trend has changed economic models and given birth to emerging business patterns, such as e-commerce and sharing economy.
China is in times of great social and economic transformation amid information technology, and the country has witnessed an unprecedented trend toward online businesses models. Since its government backed the switchover in the economy from manufacturing to innovation, and the whole country was moving along this path rapidly.
Covestro is prepared to help China, which has become its largest single market since 2017, in further advances in innovation by, for example, partnering with the e-commerce sector.
“We can be part of that and learn from our experience in this market and apply what we’ve throughout the rest of the world. We want to lead the digitalization of the chemicals industry and this must happen in China with speed and skill first,” said Bjoern Skogum, president of Covestro China. It therefore made sense for Covestro, as one of the leaders in chemicals industry, to partner with a leading sales platform in China and vice versa.
Convestro said the Alibaba platform is one of the biggest online business-to-business marketplaces in China, and it would give the company immediate access to a large group of potential customers.
The initiative also opens up new possibilities for doing business and aims to make the world’s chemicals easily accessible to business customers through a reliable, mainstream channel via a simple and efficient purchasing experience, the company added.
It needs to be where the customers are and will be and 1688.com is that place.
The company said the China economy had experienced tremendous progress both in innovation and digitalization in recent years, to which the company was contributing.
Digitalization describes a comprehensive social change. For companies, it means that they can use technology to add value and bring social benefits beyond economic benefits.
“Digitalization rapidly changes customer needs and preferences and offers new business opportunities, especially in the fast growing Chinese economy,” said Markus Steilemann, chief commercial officer and future CEO of Covestro.
“For us, China plays an increasingly important role, not only in terms of market size but also with regard to innovation in relevant markets and technologies,” he said.
“With the launch of an online store on Alibaba, we are following our strategy by innovating our business models in close cooperation with our customers.”
Currently, about 50 products are available in the store and Covestro said it is planning more products to be sold online.
With a maximum quantity order, the flagship store is more tailored to the needs of small-and medium-sized customers. China has a large group of potential customers that Covestro can now target directly.
Chemicals companies usually sell products in large amounts, because the logistics for the sale of small amounts need a different setup and is demanding with regards to efficiency.
After one month’s operation, the company generated interest from customers and has already delivered its first orders through the online shop. Covestro said it was happy with the progress made so far and expected it to gradually develop over the
Covestro wants to lead the digitalization of the chemicals industry.”
Bjoern Skogum, president of Covestro China
course of the year.
Covestro offers a multichannel method of digital sales throughout other regions.
The company has set a goal to achieve accumulated sales generated through these various digital channels, including the flagship store, of around 1 billion euros ($1.18 billion) by the end of 2019.
In the 13th Five-Year Plan (2016-20) and Made in China 2025 strategy, there is a vision for an innovation-driven economy.
As a world-leading material solution provider, Covestro has firmly integrated China and its customers into the global network after accumulating long history of rich research and development experience here.