Does the oil products market need a marketplace? After all, there are still no striking examples of profitable B2B trading platforms in Russia.

Oil products, primarily diesel fuel and gasoline, represent a vast market. For instance, they account for about 30% of the total trade turnover on the St. Petersburg International Mercantile Exchange (SPIMEX). We estimate the market’s annual volume at 6 trillion rubles, with about half traded via the exchange and tenders. The rest belongs to the small wholesale segment, known as the end-customer market. Our platform is designed specifically for these buyers: farmers, builders, transporters, etc. They purchase small quantities, and for them, the key factors are speed and transaction security.

OPEN OIL MARKET is a marketplace where oil products can be bought and sold, and where users can view offers fr om all suppliers. Some visitors simply come to analyze the market before negotiating with their usual suppliers. This, in essence, is wh ere the buyer's journey begins on our platform.

I suspect traders are not very pleased with the emergence of such a tool, are they?

Yes, this could seriously challenge traders' dominance in the market. Let me reveal a little secret about where intermediaries derive their highest profitability. Overall, this market is very low-margin: when trading between professional market participants, the markup is 200–500 rubles per ton, less than 1% of the cost. The real profit comes fr om end buyers who lack the time for analysis and buy at "usual" prices. The market is highly volatile, with prices fluctuating by tens of percent throughout the year. Traders profit most when the market is low — buying at minimal exchange prices and selling to buyers at the old "average" rates.

That said, not all traders are the same. Some professional companies are essential to the market. They purchase large volumes on the exchange and resell them with a small markup. Their services are critical because small consumers won’t buy directly from the exchange — it’s too lengthy, costly, and complicated. Honest traders are essential to everyone, including OPEN OIL MARKET, wh ere about 40% of the supply is posted by traders. Here, their prices are fair since they compete directly with producers’ prices.

Speaking of the exchange, it’s also developing tools for small wholesale sales. How do you plan to compete?

Indeed, SPIMEX has long discussed plans to expand small wholesale sales and recently launched a pilot service for purchasing via pickup from specific oil depots. We joke that the exchange is following our lead.

This move makes sense, as I mentioned earlier; the market is enormous and is considered one of the country’s least digitized. However, buying through the exchange comes with restrictions and complexities. Accreditation is required, along with a 100,000-ruble fee for trading access. The platform itself is complex and designed for professional market players.

The main issue is the self-pickup clause. Buyers must not only go through the demanding registration process but also handle challenging negotiations with transport companies. In Russia, trust in transport companies often surpasses that in traders because, in about 70% of cases, the delivered fuel volume is incomplete. Moreover, exchange purchases typically involve long delivery times, up to 10 days, which is often too long for our segment.

As I’ve said, a marketplace is more than just a buying and selling platform. It provides services that simplify the user’s life, saving not only money but also time, which is equally valuable.

What services are most important for B2B buyers today?

Understanding the audience’s needs is critical. After extensive experience in this market, we identified four main requirements that any seller, whether a trader or a digital platform, must meet.

Security. On a B2B marketplace, transactions involve much larger sums than in retail. For example, an order for fuel can range from 300,000 to several million rubles. To address this, we developed a secure transaction service in partnership with T-Bank. Payments go to a nominal account and are released to the supplier only after successful delivery and document signing by the buyer.

Price. Competitive environments on the marketplace result in significantly lower prices. Savings can reach thousands of rubles per ton. Additionally, the marketplace offers a credit service.

Delivery. This is our key differentiator. Buyers can calculate delivery costs and purchase fuel with delivery included, a critical feature. Imagine buying clothes on OZON but having to arrange your own transportation — it would be unthinkable.

Analytics. Buyers can view regional prices, analyze trends, and forecast the market. We are developing an advanced predictive analytics service using AI to model pricing dynamics.

Is the market ready to transition to digital platforms? Commodity markets are often conservative and traditional.

Yes, it’s a conservative market, but the world is changing. Even these conservative buyers regularly purchase equipment on Yandex Market, groceries on Kupyer, clothes on OZON, and possibly even cars on Wilberries. Habits from B2C are spilling over into B2B. The explosive growth of business services is just a matter of time.

In our case, while there’s initial skepticism toward online platforms, we focus on communication, including offline events, to gradually introduce audiences to the platform. Currently, we have around 3,000 active buyers and sellers, and this number should grow to 60,000 in a few years.

What order volume do these 3,000 companies generate?

In 2023, our marketplace’s turnover reached 5.9 billion rubles. Recently, we sold our 200,000th ton of fuel since 2021, a significant milestone.

Many potential buyers are still exploring the platform without placing orders, which is normal for a market with high average transaction sizes. Decision-making takes time.

Do you plan to expand your product range?

Yes, we’re looking at the broader commodities market. We started with oil products due to our extensive experience in this sector. We’ve since added sand and clay for construction companies and motor oils for transporters.

Future plans include coal, fertilizers, timber, non-metallic materials, and possibly grain and other agricultural products. We’re actively scaling the platform and attracting investments to support this growth.

What’s your investment strategy? How can e-commerce companies attract funding today?

We chose a pre-IPO model, raising funds from private investors through VTB Registrar. It’s a relatively new tool in Russia but has proven effective. This allows anyone to become a shareholder with minimal registration and later trade the shares on the Moscow Exchange. We plan to go public in 2027.

One unique feature of our investment program is compensation from the Skolkovo Fund, which reimburses investors up to 50% of their investment, depending on their tax payments over the past three years, up to 20 million rubles.

What’s the purpose of these investments?

All funds will go toward product development, marketing, and sales. Our ultimate goal is to capture a 22% share of the small wholesale oil products market by 2027, representing a turnover of 736 billion rubles. Every effort is directed toward achieving this goal.


Translated using ChatGPT

Sourse: https://companies.rbc.ru/news/UnWP9OG3v2/kak-syirevoj-marketplejs-lishaet-trejderov-ryinochnoj-vlast.