Nov 25 2005
BASF is expanding its successful e-commerce activities. In the first nine months of 2005, the company increased e-commerce sales by 55 percent to approximately €6.8 billion (first nine months 2004: €4.4 billion). This corresponds to 26 percent of total sales (excluding the oil and gas business). By comparison, e-commerce accounted for 20 percent of sales (€6.5 billion) in 2004 and 13 percent (€3.7 billion) in 2003.
Integral part of corporate strategy
“E-commerce is an integral part of BASF’s corporate strategy,” said Andrew Pike, head of the competence center Information Services, explaining the company’s formula for success. “It has enabled us to streamline and accelerate our processes significantly, making BASF even more efficient in the global competitive environment. In terms of sales BASF is in the same league as Amazon and is way ahead of eBay. For 2006, we have now set ourselves the goal of achieving well over 30 percent of BASF Group sales excluding oil and gas via e-commerce,” he added.
All operating divisions and regions expand e-commerce activities
In the first nine months of 2005, all operating divisions increased their e-commerce activities, not just those that are traditionally strong in this area such as Styrenics and Performance Polymers. This reflects the increasing trend toward trading specialties as well as standard products online.
The e-commerce trend is also global: All regions at BASF reported higher e-commerce sales in the first nine months of 2005. At almost 75 percent, the greatest increase compared with the previous year was seen in Asia Pacific. The more mature European and North American economies contributed 54 percent and 24 percent respectively to BASF’s global e-commerce sales. Compared with the previous year’s strong performance, this corresponded to a further increase of 64 percent in Europe and 38 percent in North America.
IT tool creates more time for customers
In 2004, e-commerce already accounted for 74 percent and 65 percent of sales in BASF’s Styrenics and Engineering Plastics divisions. In line with their motto “Every customer is an e-customer,” the goal is now to increase the proportion even further by using a new IT tool in Europe – Intelligent Order Processing (IOP) – developed by BASF. This system processes faxed orders and automatically transfers them to BASF’s IT systems.
“In addition to order management, e-commerce provides our customers with information and service tools. All this offers advantages for both parties,” said Dr. Herbert Fisch, head of global e-commerce at BASF. “On the one hand, customers benefit from greater transparency, and on the other hand we gain valuable time that we can use to better serve our customers,” explained Fisch.
E-commerce increasingly important in purchasing
E-commerce is also becoming increasingly important on the purchasing side. For procuring technical goods and services, BASF uses the electronic marketplace cc-hubwoo, in which it owns a stake. With more than 20 million articles, over 8,000 suppliers and more than 1 million completed transactions so far in 2005, cc-hubwoo is one of the world’s busiest marketplaces. BASF now conducts procurement transactions with more than 180 suppliers via cc-hubwoo. In Germany alone, BASF Aktiengesellschaft now purchases almost 50 percent of raw materials electronically, and the figure for procurement of technical goods and services is in excess of 50 percent of transactions.
BASF has been enabling its customers and suppliers to process orders electronically since 2001. The Internet service consists of two elements: WorldAccount and Elemica. Elemica is an independent network that was originally founded by 22 companies in the chemical industry and that provides an electronic link between the order management systems of customers and suppliers. Now, more than 230 companies are linked with BASF via Elemica. WorldAccount, BASF’s global e-commerce portal, is available to customers and suppliers in 11 languages and offers all the company’s products with the exception of oil and gas. Currently, there are more than 15,000 registered users in more than 90 countries. The BASF platforms ChemicalPortal and PlasticsPortal are also based on WorldAccount. The subsidiary BASF IT Services provides technical management for BASF’s e-commerce activities and played an important role in establishing WorldAccount.