Sergey Tereshkin, the CEO of Oil Resource Group, spoke to RBC+ about the digital approach in the oil products trade business and the features of the marketplace for participants in this market.

— How relevant is the introduction of digital technologies in the oil products trading system worldwide today? What is the main benefit for market participants from digitalization?

— The need for automation and the implementation of digital technologies in the market is obvious today. It allows companies and market participants to minimize manual labor, improve processes, make them more efficient, predictable, and cost-effective, and increase trading volumes. For example, in our company, we began automating processes back in 2014, and we were able to increase sales volume without hiring additional staff, saving on costs. In other words, without increasing expenses, we can expand into new regions and broaden our geography.

— What is the economic effect of using digital technologies for traders and the country’s economy as a whole?

— Let's look at the economic impact using our marketplace, "ORG-Market", as an example. We launched it at the beginning of last year. In the past year, our revenue through the marketplace was just over 2 billion rubles. The company's total revenue for the year was about 15 billion rubles. The progress is evident. Now, let’s move on to the process itself. The entire supply chain of goods becomes transparent. Both the buyer and the seller can see everything happening during the purchase process: the price at which the fuel was bought, the stage of shipment, etc. Thanks to reduced costs, the entire market benefits. Our marketplace allows fuel suppliers to sell directly to buyers—large factories, enterprises, organizations—without going through a chain of traders. As a result, the selling price may be higher and more advantageous for the seller, while the buyer gets a lower price, which is also more attractive. We all know how fuel impacts the economy of a country: primarily, inflation, and high transportation costs. We calculated that the cost of fuel accounts for about 30% of the price of a loaf of bread. The share of fuel in other products, including the cost of building materials, is similarly high: the extraction of sand, the production of concrete, the delivery of materials to construction sites—all these processes involve significant fuel costs. Therefore, reducing the supply chain and lowering the cost of the process globally affects the cost of many things around us. Often, there are between three and five intermediaries in the chain of traders, sometimes the product passes through up to ten hands, with each one adding their markup. Ultimately, the price of fuel increases, and this growth can exceed 10%. Our platform is situated “at the intersection” between the producer and the final customer, where the final customer can visit, choose a producer by price, and purchase products directly from them. In the marketplace, the chain of traders in the fuel market simply disappears. Meanwhile, the producer sells at a price that aligns with market interests, without being "pressed" or having their price "squeezed." The supplier looks at what prices are favorable for both them and the consumer. If they want to increase sales, they lower the price; if they need to raise the price due to a shortage, they adjust the price accordingly.

— What main technologies are used today for trading relationships in the oil products market? What are the market prospects?

— We see the widespread implementation of digital technologies in both oil extraction and refining. When we began developing digital sales technologies, the picture was different: IT technologies were too expensive and not very understandable. As they say, the benefits were not proven, but the harm was obvious. However, recently, the situation has changed. We now see companies that are also developing their IT services and implementing new technologies. The global trend is largely the platform business model, which was introduced by Uber at the beginning of the last decade. Today, more and more companies are becoming marketplaces. The same goes for Wildberries, Ozon, Sberbank, which is now creating its ecosystem and platforms, Yandex. Most often, this is done for the B2C market; creating a platform for B2B is somewhat more complicated, but we are doing it. Russia is highly digitized, despite the criticisms. Our country adopts technologies very quickly. This is also thanks to our giants like Sberbank and Yandex, who promote these technologies and show how life can be simplified, made cheaper, and more profitable. Russia has a very bright digital future.

— What is the uniqueness of a marketplace in the oil products trading market?

— It's not that simple to create a marketplace here because the oil products market lacks transparency, which is exactly what we are trying to solve. There is not much trust in traders in this market. This is because the average transaction amount is around 1–1.5 million rubles, not 2–3 thousand rubles as on Wildberries. In our market, you need to be not just a participant but a participant with a name who can be trusted.

— What do you think hinders the development of the oil products market and what could stimulate it?

— Investments would certainly help here. If substantial amounts of money were poured into the market, all developments and marketing research would proceed much faster. We do everything ourselves, and we do it quite quickly. But everything comes down to investment and understanding from buyers, realizing that through marketplaces, you can not only order cheap goods but also expensive and complex products. We are pioneers in this field, so we try to teach, explain, and show that there are complex products, demonstrate how we digitalize all processes, and seek feedback to understand what we should do next and what needs to be changed. In our company, we are primarily developing accounting systems. We have a mobile app where customers can check the current price and order products at any time. We also develop various services within the company that are made possible through IT. For example, we use a mailing tool. Back in 2017, we created a Telegram bot to allow deals to be made quickly via a mobile phone, including calculating delivery costs. Additionally, through the marketplace, our buyers receive the closing documents almost immediately, which is very important in terms of the transparency of the market we work in.



Translated using ChatGPT