Big opportunities, small pitfalls: Digitalization in polymer trading

Interview with Martin Unger, new Elevator Council member of Meraxis and Managing Director of the Startup Family Office and Co-Founder of wattx (Viessmann Group)

23 March 2021

Many industries are already strongly shaped by digital approaches. The financial sector relies on digital transactions, and the industrial sector on the Internet of Things. However, the polymer industry has some catching up to do. That is why Meraxis is investing specifically in digital approaches and solutions. This has been an integral part of the company's strategy since it was founded. The Elevator Council was set up to regularly review, question and adjust this strategy. In addition to the digitalization team and the Board of Management, this body also consists of external experts. We spoke to the newest member, Martin Unger, Managing Director of the Startup Family Office and Co-Founder of wattx (Viessmann Group) about digitalization in the polymer industry.

Martin, reading your CV, you can sense the start-up spirit and your enthusiasm for digital business models. What brings you to the polymer world now?

Martin Unger: When I started working on Meraxis, I realized once again that we encounter polymers every day. However, the industry is facing the challenge of making the production and use of polymers more sustainable. Most consumers consider sustainability important in their purchasing decisions - a trend that is growing.

As a society, we are asking ourselves how we can help preserve our planet for future generations. For the polymer industry, this means: Which of our competencies can we use to develop sustainable solutions? And how can we use them to turn today's challenges into tomorrow's opportunities? I see digital transformation as a significant tool in this regard - not as a goal in itself.

Digital solutions and business models often provide solutions to big problems. They increase competitiveness, an important factor in our globalized world. However, our ultimate goal at a global level must be to solve the most pressing problems, such as climate change, while at a regional level we work on making our environment livable.

I have already accompanied the development of a wide variety of digital solutions. Therefore, I hope to use my experience to make a small contribution to ensuring that Meraxis Group will continue to develop and offer successful solutions with its partners and customers.

In the B2C sector, digitalization is already well advanced - whether online banking or shopping. In the B2B sector, this development is - perceived - significantly slower. Why is that? What are the biggest obstacles?

Martin Unger: Basically, four things are needed for a successful company: courageous founders, a product that solves an existing problem, the necessary capital and a sufficiently large market that wants the solution.

In the B2B sector, industry knowledge makes all the difference. That's why you need founders with experience. However, they often already have families or have established a certain stability in their lives. So they think a little longer before embarking on the adventure of founding a new company.

The solutions are similar in the B2C and B2B sectors. But in the B2B environment, you usually have to satisfy and consider more stakeholders. This makes things more complex. There is also often a question of whether customers are even ready for my product. The necessary capital and entrepreneurial stamina also play an important role in prevailing against resistance.

 In contrast, B2B solutions have the disadvantage that they require in-depth industry knowledge and the so-called "sales cycles" - i.e. the time until a customer decides to buy - are much longer. Additional training and change projects are often necessary for the introduction. As a result, these topics often do not grow as quickly as solutions in the B2C area.

So B2B solutions have to be evaluated in many areas based on different metrics than B2C solutions. I think these are at least a few of the reasons why B2B solutions sometimes seem less attractive to investors and sometimes really are.

No company should pursue digitalization as an aim in itself, but rather create added value for the customer. In your opinion, what specific challenges does B2B commerce face and what typical mistakes cause companies to fail?

Martin Unger: Making mistakes is part of the game. However, companies like to prevent mistakes at all costs and thus make real innovation impossible. I think most established companies simply lack the prerequisites needed for profound change: the necessary structures and characters as well as a matching corporate culture.

In general, trade is under pressure from the ever-increasing direct sales and the emerging marketplaces. However, two key factors are still playing into their hands at present: as long as margins are right, producers are often under no pressure to invest in innovative solutions. In addition, hardly any producer who decides to sell his products to direct customers via the Internet will want to give up his previous, established distribution channels. After all, there is no guarantee of success. And often the necessary expertise in distribution and logistics is simply lacking. The greater danger for retailers comes from the independent (equity-financed) players that are increasingly entering the market.

Last but not least: What particularly excites you about the assignment at Meraxis?

Martin Unger: I am looking forward to learning more about Meraxis, its products and customers. As I mentioned earlier, I see the industry in which Meraxis operates facing profound change. I would very much like to play a small part in ensuring that Meraxis remains a winner in the process.

Thank you, Martin!

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