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Importance of E-commerce platform in the aluminium industry

Contributed by: Anonymous
June 19, 2021

Over the last two decades, E-commerce has transformed the pattern of consumption with its technological advancement. Owing to simple and quick purchasing model and easy payment methods, E-commerce trend has been widespread, especially in the B2C sector, while the B2B world has also started catching up fast. From the entertainment to apparels, food to real estate, industries have adopted the digital way of doing business. Even the metal industry is not lagging behind in embracing the digital world.

According to study conducted by Fraunhofer, in Germany, 95% of the companies have already automated almost half of their processes. While a digitization level of only 30% is being achieved by the entire industry.

In today's world, information plays the most critical role in business. Internet is revolutionizing the way information is captured, transferred and consumed. It transforms companies to change the way they do business and help them connect to customers much faster efficient way. Ecommerce is like one umbrella under which sellers and buyers can connect using technology. Globally the metal industry is still mostly relying on the offline channels for doing business and the digital adoption is much less compared to other big industries.

If we look a little closer, within metal industry, Steel industry has shown more adoption towards digital than others. There have been websites across countries where players within the steel industry have started doing business online, connecting with each other through marketplace platforms. The western countries and China are of course leading the digitization drive while others are catching up. Other non-ferrous metals though have started slowly, but yet to pick up the pace. Aluminium, the second most used metal in the world, has particularly very high opportunities in this particular space as it has a very high number of players involved and it’s one of those metals whose use case will be growing with time.

Aluminium, like steel, has a very long value chain and hence, the no of products, process and companies involved in the global aluminium industry makes it a huge eco-system. Currently some players have started listing their products in some global ecommerce websites to promote their brand but the traction so far have not been great. The industry lacks specific focus and also needs more digital adoption from leading companies. Ecommerce can certainly play a very big role in how the aluminium industry shapes in near future. It can provide a one stop solution for the purchasing managers & help reduce the cost for companies in the procurement process. The buying process in the aluminium industry is much more complicated than other B2B purchases, but with the right technology, the process can certainly get automated through ecommerce platforms.

Finally, it can be concluded that – Ecommerce can solve a lot of existing problems by smooth information assimilation in the global aluminium industry and can save a lot of time & money for the companies. A report McKinsey suggests "metal producers that harness the full potential of a digital transformation can increase their EBITDA margins by up to 6 to 8 percentage points. Process digitization and software automation can add another 20 to 30 percent to EBITDA gains." It is high time the industry adopts to the new trends of technologies and go digital!