Sinopec opens new industrial platform
Updated: 2016-04-22 07:11
By Lyu Chang(China Daily Europe)
Goods from more than 60 industries will be available on the company's online system
Asia's largest refiner, China Petroleum & Chemical Corp, known as Sinopec, is pushing big into a market-oriented transformation with the launch of the country's largest online industrial supply system on April 18, teaming up with e-commerce giant Alibaba Group Holding Ltd.
It is the latest in a string of moves by state-owned enterprises to diversify their business and enhance profitability.
Sinopec, teaming up with Alibaba Group Holding Ltd, launches the country's largest online industrial supply system on April 18. Provided to China Daily
The online industrial product system - www.epec.com - used to be Sinopec's internal procurement platform, but the company decided to open up its access to the public as part of a restructuring amid weak oil prices.
Alibaba provides services to Sinopec in terms of internet safety, big data and technology upgrading.
Wang Yubing, president of Sinopec's procurement division, says the company plans to build the platform into an industrial version of Taobao.com, the country's largest online shopping marketplace, owned by Alibaba.
"The market value of online retail business rose to about 3 trillion yuan ($464 billion; 409 billion euros), but the market potential for online sales of industrial products is much larger than that," he says, expecting the transaction value on the platform to reach 500 billion yuan.
Currently, 90 percent of the transactions on the platform have come from Sinopec, but Wang says more companies will join the purchasing system since it will reduce their sourcing budget and increase efficiency.
"This platform will benefit not only large industrial enterprises but also those small and medium-sized companies through sharing our resources in suppliers and experience in supply chain management, because it will optimize their sourcing process and reduce the procurement cost," says Jiao Fangzheng, Sinopec's deputy general manager.
The website provides a huge array of products from more than 60 industries, including coal, steel, petrochemicals and oil equipment, the company says.
Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, says that it is a laudable attempt, but it may take quite a long time to make the platform a real success.
"All the talk about the reform and transformation is good, but the bottom line is driven by domestic demand," he says.
He says compared with the online retailing business, which faces end-users, price is more transparent for online industrial sales, making less of a difference for companies to source online and offline.
"All kinds of industrial companies are facing the same kind of problem - weak demand and a slowing economy. If that doesn't change, I don't see how online industrial sales will surge," he adds.
Sinopec is not the only company that is trying to restructure the marketing business. In March, China National Petroleum Corp signed a strategic agreement with Alibaba on online payments and sharing user information.