The real sector is the last bastion of non-digital trade in the country. Manufacturers and traders have historically struggled to transition to selling products and raw materials through e-commerce tools. However, consumer habits are changing, so in the coming years, we will witness dynamic growth in online trade in sectors worth trillions of rubles.

The era of coronavirus restrictions has drastically changed trade, primarily impacting B2C markets, which have multiplied in size in recent years. According to the Association of Internet Trade Companies, the online segment now accounts for around 15% of total retail sales. In the first half of 2024 alone, it grew by 41%, and the number of orders from 2022 to 2024 almost doubled.

Today, anything can be bought online—from food and clothing to apartments and cars. Consumers are becoming accustomed to quick transactions, convenient interfaces, and high-quality services on digital platforms, and then they bring these expectations into their professional spaces. In the B2B world, trade is already growing at a pace comparable to retail—according to Google, about 83% of businesses prefer to order and pay for products online.

The era of cold calls, offline marketing, and paper processes is gradually fading. But this transition is especially important for commodity markets, because the development of e-commerce here will change practically everything.

Lack of Digitization = Lack of Transparency

How does the process of buying and selling petroleum products look today for the end B2B consumer in small wholesale (e.g., an agricultural or construction company)? Let me simplify the chain of interactions:

Fuel is produced at oil refineries (refineries) and then sold through the St. Petersburg Commodity Exchange at the lowest market price. Large companies (e.g., Russian Railways) that use petroleum products for their own needs are among the buyers, as are large traders who purchase volumes for resale.

The large traders then add their markup and sell the products to smaller intermediaries, "mid-level" traders. These traders, in turn, raise the prices further and offer volumes for sale in the small wholesale market.

What does the end consumer, who needs to periodically buy small volumes (50-100 tons) for their transport or equipment, do? Like 30 years ago, they scour the information space for reliable suppliers. There is no single platform with market prices, and the prices listed on websites are often quite vague. Therefore, the next step is for the consumer to conduct phone research, negotiate with traders, and try to get the best pricing terms.

Since each deal involves several million rubles, this work is often carried out by owners and top management in small companies. And this is where the most qualified business resources are spent.

But the process doesn’t end at agreeing on supply terms. The next step is selecting a logistics company that will handle the delivery, ensuring the product arrives on time, in full, and in its original condition. If working with a new supplier, every step must be monitored closely because the market is rife with "grey schemes" that enrich all participants in the chain.

This includes hired buyers in cases where fuel acquisition is part of their duties. There is a market belief that at least 50% of deals are based on mechanisms for illegal enrichment of the parties. This is a direct result of the lack of transparency, the absence of a unified pricing system, and the market "power of traders" who set their own rules for the industry.

E-commerce — the Key to High Competition and Low Prices

Currently, about 95% of deals in the small wholesale market (the final consumer market) take place offline, as described above. Key players are not eager to change this situation: large manufacturers are focused on long-term contracts with big clients, while traders, in an environment of "low visibility," can dictate terms to customers and maintain high price levels.

Therefore, the consumer in the small wholesale market (which represents 3 trillion rubles a year, or 50% of the petroleum products trade) ends up with products at the highest prices (often 20-30% above market prices), often lower quality, and with significant time costs: each deal can take dozens of hours and carries numerous risks, primarily for buyers.

However, petroleum product trade is not the only sector where this situation occurs, though it may be one of the last. Similar conditions were observed a few years ago in the domestic agricultural product or steel market. But in these segments, pioneers (e.g., pole.rf and "Platform") appeared a few years ago, followed by other platforms that began changing their shape and formulating new rules.

What is most important for the consumer in the raw materials B2B market? First of all, it’s price. Creating a unified aggregator platform for all suppliers and offers significantly enhances market transparency, increases competition, and gives consumers the ability to make informed choices.

The second main request from clients in the B2B market is reliability. With platforms offering supplier ratings and transaction histories, consumers can rest assured about product quality, delivery times, and choose only those offering truly high-quality service.

And finally, the third side of the triangle is speed. The time spent selecting a supplier, placing an order, processing documents, communicating, and, ultimately, delivering the product. This factor determines business efficiency in many sectors, such as agriculture, where crops need to be harvested "right now." Construction, logistics, manufacturing—all of these sectors rely on fuel, and the speed of transactions is critical here.

These are the main, but not the only, tasks that digital platforms for commodity trading solve today. They are becoming hubs for audiences, offering a variety of informational services that allow consumers to solve a wide range of business tasks.

How Digital Solutions Help Market Participants

Currently, several online platforms for fuel trade are available, such as "Webneft" by Gazprom Neft, "Fuel Portal" by Tatneft, or FUEL MARKET by DECO. These are essentially e-commerce sites for companies offering their own fuel or logistics and credit services.

However, there is also an independent project that brings together any suppliers and offers a selection of products, credit programs, and delivery conditions. The raw materials marketplace OPEN OIL MARKET has been operating for about three years. It features over 100 suppliers, including Tatneft, and several credit offerings (including from Sberbank). Here, users can find the right product, arrange delivery, and apply for credit. According to OPEN OIL MARKET analysts, an average buyer purchasing 500 tons of product per month saves around 18 million rubles annually.

For suppliers, the marketplace serves as an additional sales channel, which they use alongside other tools. The average supplier on the platform, selling about 2,000 tons of fuel monthly, earns an additional 24 million rubles annually.

In 2023, over 90,000 tons of fuel were sold on the platform, with the trading turnover of OPEN OIL MARKET reaching 5.9 billion rubles. This is just 0.2% of the small wholesale fuel market. The company plans to increase this figure by 100 times in the next two years, for which a pre-IPO round has been opened. In 2024, OPEN OIL MARKET is attracting investments of 1 billion rubles to scale the project and conduct an IPO in 2026.

Translated  using ChatGPT

Sourse: https://companies.rbc.ru/news/JedYJprvDV/pochemu-torgovlya-nefteproduktami-uhodit-v-tsifru/
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