From pioneer to champion

In Saxony-Anhalt, competition is growing for Alibaba and Amazon Business

Online retailer Mercateo is developing a business model that is unique up to now and in 2017 it broke through the threshold of a quarter of a billion euro in turnover for the first time

Mercateo – the lettering of a building facade in Köthen town centre illuminates in red. Since 2004, Europe’s biggest digital B2B marketplace has developed the majority of its operational business for its online purchasing platform from Saxony-Anhalt – making successful use of corresponding expertise available in the region.

“With our help, companies can utilise their purchasing potential better” – this message from Mercateo strikes a chord with all businesspeople. Indeed, at many companies, purchasing was still an economically inefficient process, according to Lars Schade, one of the managing directors of Mercateo. He speaks of a very positive response to his company’s first online conference in autumn last year. “We highlighted paths into Purchasing 4.0,” says Schade. Mercateo – the name being derived from the Latin for merchant, mercator – is a pioneer in this area. “We have created a hitherto incomparable infrastructure for a B2B marketplace for business customers. Manufacturers and suppliers present their product catalogues or brands here. Buyers need only register once and can conveniently pack their shopping baskets and benefit from the great variety on offer. We are the retailer in the background that regulates the entire digital selling and purchasing process,” says Lars Schade. The company, he explains, uses the advancing digitalisation process with all its new technical and communicative opportunities to expand further the business in e-commerce. The upswing, says Schade, is contributed to by the fact that small and medium-sized companies are now also connected online and are among the hundreds of suppliers, thousands of manufacturers and over a million customers of the Mercateo platform. In the main, it is office and laboratory material, IT requirements as well as warehouse and business equipment that is sought and ordered, says Lars Schade. His company’s aim, he says, is to be able to satisfy all customer needs. The web-based solutions for optimising the fully electronic order processing are the company’s own developments.

And what if an item is not in the product range? “Then it is advantageous that we are not an anonymous internet platform. Mercateo users can talk to our employees personally,” says the Managing Director. His favourite example is the bat nesting box, which the public utilities of a municipality were looking for. Since then, he says, Mercateo also has providers of such boxes on the platform. After all, who would want to lose a customer to another retailer?

Mercateo wants to retain its customers, too – and allows the companies, for example, to bring their business partners actively onto the platform, both purchasers and providers. “A new dynamic is thus coming into the B2B area,” says Lars Schade, identifying a crucial competitive advantage.

At the time of its formation in Munich nearly 20 years ago, Mercateo was still a pioneer in the largely unoccupied field of internet trading – and it has already been Europe’s biggest digital B2B marketplace for considerable time. Its international sphere of influence in the Netherlands, Poland, Hungary, France, Great Britain, Ireland, Spain, Italy, the Czech Republic, Slovakia, Belgium, Switzerland and Austria also includes three locations in Germany – in addition to Munich, also in Leipzig and, for the last 14 years, in Köthen. 250 of the more than 500 Mercateo employees are employed there. We find the best trained specialists here and benefit from the proximity to the Anhalt University of Applied Sciences with the IT department in Köthen and to the Business Studies school in Bernburg,” says Lars Schade, emphasising the town’s innovativeness and openness in relation to the digitalisation concept that his company continues to develop.

In 2018, Mercateo’s turnover was EUR 285 million and rising."We achieved more than a quarter of a billion euros in sales for the first time in 2017 and were able to increase the result again last year", says the delighted managing director about the obvious customer satisfaction. “An increasing number of businesspeople are consciously deciding to use the Mercateo system functionalities.” The highly professional digital implementation of an optimal order process and the logistics behind it is being emphasised.

“We are now far more than a purchasing platform,” says Lars Schade, raising the topic of the new networking platform “Mercateo Unite”. It offers the digital space for partnerships in purchasing and retail. Schade emphasises its network concept. “Manufacturers have the opportunity to develop completely new online sales channels and to shape them in collaboration with specialised retailers.” Mercateo Unite is the basis for this – with a technological infrastructure in which business partners of different digitalisation levels can contact each other in person without third parties interfering. “In Mercateo Unite, we have developed a European trading business according to German values. This is also what distinguishes us from the large online retailers such as Alibaba in Asia and Amazon Business in America,” says Lars Schade.

Once again, Mercateo is a pioneer when it comes to the development of digital B2B trading. Likely also because the company creates excellent conditions in which its employees are highly motivated to create and advance digital innovations together. Years ago, Mercateo was chosen by Saxony-Anhalt’s state government as “company of the month” – and it has steadily expanded its good reputation. In 2016, Manager Magazin named Mercateo as one of 50 German hidden champions with a digital business model. “We operate exclusively in the business customer segment and thus in a niche in which we are very well known,” says Lars Schade. Looking towards the future of Mercateo, he says: “We want to be, not just the hidden market leader , but the true champion of our industry.” In this regard, Mercateo continues to focus on the location of Saxony-Anhalt, from where it wants to contribute to shaping the digital future of German companies.

Author: Kathrain Graubaum