The global fine chemical distribution ecosystem has undergone a profound transformation. Oracle NetSuite helps ECHEMI pursue its global dream

Source: 199 IT ; Author: 199IT Ralf

In recent years, the global fine chemical distribution industry giants have frequently merged and acquired each other. In China alone, Bruntag acquired Safe Chemical in 2023, and Eminsti announced the acquisition of Xierui at the end of 2022. In the global fine chemical distribution industry, there is a fine chemical digital global distribution service platform called ECHEMI, which has developed by leaps and bounds in a few years and has achieved far-leading performance, becoming a leader in this field in China.

From a trader to B2B and then to a digital global distribution service ecosystem, ECHEMI has gone through multiple rounds of strategic upgrades. Digitalization has always been the philosophy of ECHEMI CEO Zhang Yulin. Zhang Yulin and his team chose to cooperate with Oracle NetSuite and Hitpoint Cloud to enhance their digital capabilities under the new strategy, integrate multi-format operations, and help ECHEMI pursue its global dreams more easily.

Opportunities and changes in global fine chemical distribution

In the 40 years of reform and opening up, China has developed from basic chemicals to fine chemicals. China's production capacity accounts for 45%-50% of the global market, with the most categories and the largest production capacity in the global market. China has already moved towards large-scale and fine chemical products.

Backed by China's production capacity, a large number of fine chemical traders have emerged, but the embarrassing thing is that China has not formed a giant in the field of global fine chemical distribution. Among the top 100 global fine chemical distributors, 60 are still headquartered in Europe, and some have annual revenues of up to 20 billion US dollars.

Since registering his company in Hong Kong in 2007, Zhang Yulin, who graduated from a chemical engineering college, has become one of the traders in the fine chemical industry. Around 2013, China's B2B industry ushered in the 2.0 development. In 2014, Zhang Yulin rethought the strategy and industrial development. He believed that the fine chemical industry is particularly suitable for building a platform. This industry has high gross profit, many categories, decentralized downstream, global orientation, and a very long supply chain with great complexity. It is a career worth long-term cultivation.

In 2015, the ECHEMI website was officially launched. The early development also faced many challenges. The team found that the traffic from business cooperation was difficult to convert into transaction volume. Zhang Yulin was determined to upgrade the company's strategy again. There are many corporate roles in the fine chemical industry, including manufacturers, R&D companies, R&D institutions, universities, distributors, local end users, and small traders. At this time, the underlying logic of ECHEMI has become an ecological logic, with industrial user experience as the core. ECHEMI's strategy has changed to ECHEMI serving all parties in the industry chain.

Digitalization supports the development of the global distribution ecosystem of fine chemicals

Zhang Yulin has two distinct views: one is that the globalization of Chinese enterprises cannot be just the globalization of products, but the globalization of the entire enterprise. The other is that digitalization is something that all employees must do.

In a B-side industry that is not too competitive, Zhang Yulin's resolute thinking of change is rare. Not long ago, Zhang Yulin sent an internal letter to the old members of the former management team, in which he wrote: Everything in the past is like death yesterday; everything today is like birth today. Today's David (Zhang Yulin) is no longer the David of three years ago. We must completely break with the previous management thinking. If we still carry the previous imprint, the company will not succeed. Enterprises must continue to innovate and change.

ECHEMI has experienced continuous upgrading from traders, B2B platforms, and digital global distribution service platforms to high-end formats. Digitalization has accompanied the development of each stage. From the earliest self-built IT foundation to cooperation with localized small software companies. Later, the original information technology could no longer meet the rapid development of ECHEMI.

ECHEMI set out to find the top suppliers in the industry to optimize the overall process. At the time, there were two international suppliers to choose from, one of which was Oracle NetSuite. Compared with the rigidity of the other traditional ERP, Oracle NetSuite's fast and flexible deployment, global accounting standards, cross-border collaboration, and real-time financial management impressed Zhang Yulin's team.

After sorting out the development logic of the enterprise, the ECHEMI team began to choose a heavier model to comprehensively solve a series of problems of industry user experience, including the establishment of overseas warehouses and the continuous development of overseas companies. Currently, ECHEMI has expanded to more than 30 overseas offices and more than ten overseas warehouses. In this process, ECHEMI found that its internal system could not meet the rapid development of globalization and did not match the existing global accounting standards. NetSuite can meet the multiple needs of ECHEMI's development, and its products are standardized, low-code, compliant with global accounting standards, and relatively flexible. At the same time, NetSuite's global ERP has a very complete underlying logic to ensure compliance.

(Right: ECHEMI CEO Zhang Yulin

Left: He Yi, General Manager of Oracle NetSuite Greater China Consulting, Oracle Corporation)

During the implementation process, Zhang Yulin described that it was very painful before going online, but very easy after going online. Because ECHEMI had insufficient expectations of complexity in the early stage, it also found some of its own irregularities during the process, and simultaneously optimized many problems, improving the company's digital capabilities. NetSuite's rapid deployment, rapid expansion, rapid launch, lightweight operation and maintenance, rapid implementation, agile iteration, and convenient development have greatly improved the efficiency of cooperation.

For Zhang Yulin, the obvious effect of using NetSuite is that he can see the overall financial situation in real time, make timely payments and payables, and monitor the use of working capital in real time, which is very helpful for financial management. NetSuite allows ECHEMI, which is committed to becoming a truly global enterprise, to build an online headquarters, so that online office work can be realized at any time.

Three powers join forces: Trust and work together

Things in the world are often caused by chance. How did ECHEMI, NetSuite, and Hitpoint Cloud, all leaders in their respective fields, come together? It is the trust between the three parties that allows them to join forces and work hard towards the same goal.

(Photo: ECHEMI, Oracle NetSuite, Hitpoint Cloud three-party strategic cooperation)

Ye Tianlu, General Manager of Oracle NetSuite Greater China, believes that the relationship with ECHEMI is a matter of meeting the right person at the right time. 2022 is a critical year in the strategic development of ECHEMI, and digitalization is needed to solve many problems and pain points.

Like many global companies, in the early days, business and financial systems were often separated, and finance could not trace the source of business, and financial compliance needed to be improved. NetSuite helped ECHEMI achieve business and financial integration, ensuring timeliness and accuracy. In addition, NetSuite is very flexible and has strong scalability, and can quickly take on new areas. For example, ECHEMI's new warehousing and logistics service system can be quickly built with NetSuite, saving the company's time and technology development costs, and quickly meeting the expansion of multiple formats.

For global enterprises, group management and control is one of the difficulties. Through the collaboration and complete integration of NetSuite, the group and overseas companies have achieved unified digitalization, and corporate management has reached a new level.

Hitpoint Cloud is NetSuite's first partner in mainland China. Even the first Chinese version of NetSuite's PPT introduction was translated by Hitpoint Cloud for customers. Before cooperating with NetSuite, Hitpoint Cloud also represented many other products, including Salesforce, but after cooperating with NetSuite, the Hitpoint Cloud team was impressed by the powerful functions and vitality of NetSuite products and resolutely invested in the localization implementation of NetSuite solutions. From the initial domestic team of several people to the current North American team, it shows that Hitpoint Cloud has always been focused on and professional in NetSuite products.

Deng Xianfei, founder and president of Hitpoint Cloud, reviewed the tripartite cooperation and said that as a global company, ECHEMI needed a system to support its global business, as well as multi-language, multi-accounting standards, global expansion and internal control regulations. NetSuite was the best choice.

Catch up with foreign giants ECHEMIs take advantage of new digitalization

In terms of volume, there is no boutique chemical distribution company or trading company in China that can be compared with foreign giants. Zhang Yulin is very aware of this. The history of basic chemicals and fine chemicals developed from Europe. They have done very well in production and distribution. After a long period of accumulation, they have built a global distribution network. However, many Chinese companies have blank overseas distribution networks, so it takes a long time to build a platform with a strong global distribution network.

Compared with large overseas companies, the digitalization of Chinese enterprises is still very rudimentary. Fortunately, China has sufficient production capacity, and the C-end thinking can make up for the shortcomings of the B-end, and many innovations have emerged. Zhang Yulin is also very confident that ECHEMI's overall concept and strategy are beyond its foreign counterparts. In the field of fine chemical distribution, ECHEMI is committed to being the best in the industry, and with the help of NetSuite's global capabilities, it can become the best in the world.

Ye Tianlu said that through the first phase of cooperation, NetSuite has built a very advanced global system platform for ECHEMI, which comprehensively covers all kinds of sales business from the front end to the global supply chain, channel management, and financial and tax management from the back end. In terms of group management, NetSuite has brought four obvious effects to ECHEMI:

First, through one platform, we can realize the integrated operation of multiple global businesses. Support the rapid expansion of global business. Second, through one platform, we can realize global group management and control, improve business efficiency and reduce business risks. Third, we can achieve financial and tax compliance in all parts of the world. Fourth, we have built a multi-dimensional intelligent data analysis capability to deeply explore the value of data and help enterprises make decisions with evidence.

In the next cooperation, first of all, NetSuite will help ECHEMI optimize and innovate its global business, further improve business efficiency, help ECHEMI improve customer service experience, and gain more customer trust. Secondly, it will deepen and optimize group management, data intelligent analysis, risk management, etc. to create a more powerful digital platform. Finally, including the most advanced generative AI and other technologies, in the context of Oracle's global strategic promotion, accelerate the integration into existing systems to help customers lead their peers in technology.

Postscript

From the perspective of capital, foreign capital has a deeper understanding of the fine chemical distribution sector. The multiple mergers and acquisitions since the pandemic and the frequent moves of European Old Money have all demonstrated the activeness of capital in the fine chemical sector. However, there are few domestic investment institutions that can see clearly this field. They often only view these companies as traders and seriously underestimate the value of the companies. NetSuite supports ECHEMI's global finance and tax localization, fully complies with IPO audit compliance requirements, and consolidates ECHEMI's basic capabilities for future listings in advance.

ECHEMI is determined to enter the top 5 in the world. Zhang Yulin repeatedly emphasized the need to examine the allocation of fine chemical resources from a global perspective. "So global companies in the field of fine chemical distribution are not just about exporting products overseas, but the entire company must export and become truly global companies. This is the mission of this generation of Chinese people." Zhang Yulin told 199IT.