Several industries have been disrupted by companies with a platform business model. Think of telecommunications and advertising (Google, Facebook, Tencent); retail (Amazon, Alibaba); travel (Booking.com); music (Apple, Spotify); and entertainment (Netflix).
While platforms have re-shaped industry after industry, one that has escaped is the chemical industry.
Within this huge global industry only a small number of platforms have emerged – such as Monsanto’s FieldView and John Deere’s platform in agro-chemicals.
However, we see early signals of potential disruption along three areas of the chemical value chain:
1. R&D: the rise of open platforms in material informatics
New start-ups at the intersection of material science and computer science (material informatics) are envisioning open platforms. These will amass the entire world’s material knowledge from different sources into a single, consistent, searchable format, and use machine-learning AI algorithms to come up with unexpected innovations quickly and efficiently.
One example is Citrine Informatics, a Silicon Valley start-up backed by Google’s former CEO Eric Schmidt and Tencent Holdings (the Chinese digital giant).
2. Formulation and marketing: the potential of recommendation engines
The trend of B2B consumerisation is changing the behaviour of buyers. They expect a similar experience to that they have elsewhere in their lives as digital consumers (on Amazon or Netflix).
in the last few years we have seen this trend reshaping the construction industry thanks to platforms like bimobject.com and software companies like Autodesk. Now architects and engineers can search for construction products and components in BIM libraries where information-rich digital objects in standard format can be downloaded and used like LEGO bricks to design a building.
Such platforms have not yet appeared in the chemical industry. But their potential is clear. Think of a detergent formulator who has to define the right recipe from multiple ingredients (surfactants, polymer, stabiliser, and so on) from several different suppliers. What if they could subscribe to a platform providing advice and recommendations on ingredients, dosages and expected performances and costs?
3. Distribution: the emergence of a “Chemazon”
Amazon is making forays into the B2B sector. It has already penetrated the industrial equipment supply business hitting the incumbent W.W. Grainger Inc., a Fortune 500 company. In China, 1688.com, Alibaba’s B2B marketplace, already hosts specialty chemicals-like ingredients for polyurethane foams, coatings and adhesives.
We are still at the beginning of a potential transformation in the chemical industry. Apart from digital giants (such as Alibaba and Amazon Business) new vertical platforms specialised in the chemical sector are emerging (like the Chinese Molbase) and other niche platforms, specific to sub-sectors, may appear soon.