Digital dinosaurs: Why chemical manufacturers are losing the e-commerce game

The global chemical industry is realigning its business driven by trade tariffs, geopolitical challenges, supply chain constraints, sustainability goals, M&A, and digital transformation. This industry is traditional, complex, and has long B2B sales cycles involving multiple stakeholders. These sales are primarily driven by relationships with volume-based negotiations for multi-regions and multi-products to produce different end-market applications. Manufacturers must modernize their applications and integrate systems to create a new source of value and launch new sales channels.

Large chemical manufacturers began utilizing digital technologies and launched e-commerce portals to enhance customer experience (CX) and establish an omnichannel presence in response to COVID-19.  While there have been improvements in productivity and efficiency, the chemicals sector e-commerce ecosystem is still developing and has not yet reached its full potential. Numerous challenges exist in fully transitioning to a digital platform for an experience like an Amazon portal. But chemical e-commerce is not just about building portals; it’s about owning the ecosystem and data stack that allows for agile, secure, transparent buyer experiences.

Why closed portals are not enough: Chemical buyers demand real e-commerce

The first phase of chemical e-commerce emerged in the early 2000s when manufacturers experimented with online product catalogs and request-for-quote (RFQ) systems. Adoption was slow due to regulatory complexities, product safety concerns, and low-profit margins.

Some companies, such as BASF and Evonik, invested early in digital capabilities. Their platforms focus on integrating logistics, compliance, and internal systems, allowing more control over pricing and customer experience (see Exhibit 1). However, their reach is often limited to existing clients or specific regions, indicating a need for greater collaboration across marketplaces.

Exhibit 1: Different e-commerce platforms adopted by the chemical manufacturers

Source: HFS Research, 2025

First came company portals, followed by e-commerce platforms. However, without integrated ecosystems that include buyers, sellers, regulators, safety channels, and logistics, even the best tech won’t scale in this complex industry.

Over the past two decades, many third-party e-commerce marketplaces such as Elemica and ChemConnect have struggled to create a successful sales channel. In contrast, platforms such as Knowde, PIPOOLs, SpecialChem, and Molbase have achieved success. Refer to Exhibit 2 for the e-commerce platform penetration showcasing the number of products, suppliers on board, and years of active participation in the industry, with none being placed in the leader quadrant.

These platforms actively collaborate with buyers, sellers, technology providers, regulators, and logistics companies to lead in this area. Knowde, in particular, engages the ecosystem players and creates niche data architectures that can help the chemical industry improve the buyer experience.

Exhibit 2: Chemical industry e-commerce marketplace platforms and their scale of operations

Source: HFS Research, 2025

Chemical e-commerce: A digital advantage that’s still a safety concern to tackle

These marketplaces offer greater reach, faster customer acquisition, and lower cost-to-serve, especially for small and mid-sized buyers. However, they pose safety, branding, pricing control, and data ownership challenges for manufacturers that use them to direct customer relationships (see Exhibit 3).

Exhibit 3: E-commerce in the chemical industry: Advantages and challenges for buyers and sellers

Source: HFS Research, 2025

Why system modernization is the entry to e-commerce: ERP or die

Chemical manufacturers should address technical and data debts to create a new source of value for existing and new customers. This is impossible unless they focus on integrating with the current platforms, starting with ERP, CRM, Salesforce, procurement, finance, and inventory systems. Application modernization and integration open plenty of new horizons for enterprises to improve customer and partner experiences, improving the bottom line.

For instance, Safex Chemicals modernized its ERP, streamlined the product portfolio, and integrated internal systems with AI, ML, and business analytics, which enabled it to enter the e-commerce business by the end of 2024. The company launched an e-commerce portal and mobile application, which onboarded 16,000 dealers, and it offers 22 agrochemical products, with herbicides making up 35 percent and insecticides accounting for 45 percent. The Group Director of Safex Chemicals, an India-based chemical company, mentioned, “By digitizing and streamlining our core processes, we’ve freed up resources to focus on innovation and market leadership. The transformation has enabled the successful launch of our e-commerce platform, ‘Golden Farms’ which bridges the gap between us and end consumers, enhancing accessibility and customer engagement. Similarly, BASF is strengthening its e-commerce portal ‘myBASFworld’ by adding new regions and products to expand customer interactions.

The Bottom Line: Enterprise leaders must prioritize investments in backend modernization and AI-driven customer engagement or risk ceding control to aggregators and digital-native disruptors.

E-commerce is not just another sales channel. It’s the foundation for how chemical firms will survive and compete in the next decade. Manufacturers must ditch siloed digital portals and join or build real-time marketplace ecosystems that integrate ERP, CRM, compliance, and logistics.