German pharma giant Bayer’s polymer spin-off goes big on e-commerce in China

Covestro, which was spun off from German drug maker Bayer in 2015, has launched two digital distribution channels to capture new customers and meet the needs of changing business procurement behaviours in China.

Last month the polymer maker opened a flagship store on e-commerce giant Alibaba Group Holding’s business-to-business trading platform 1688.com, which was preceded by its own trading platform in the middle of last year to serve bulk buyers where customers can easily switch between suppliers, said chief commercial officer Markus Steilemann, who takes over as chief executive from June.

They form part of Covestro’s “digitalisation” strategy that will also see the Leverkusen, Germany-based firm plough “tens of millions of euros” up to 2020 to overhaul its production control systems globally, giving it the data it needs to predict and conduct operational maintenance to avoid production downtime. 

“We want to piggyback on Alibaba’s presence to position our products and services … [and] attract new small and medium-sized customers who may not have heard about us, but happen to be searching for products on Alibaba,” Steilemann told the South China Morning Post in an interview.

The firm, which was known as Bayer MaterialScience before it was listed on the Frankfurt stock market in October 2015, is aiming for its two new e-commerce platforms to contribute up to €1 billion (US$1.17 billion) in accumulated sales by the end of next year. 

Bayer has since been selling down its stake, and will no longer hold any Covestro shares once an exchangeable bond matures in 2020.