Innovative Distribution Channel Turns Excess Stock into Revenue at Asellion, a Covestro company

The challenge
Innovating Distribution

In 2016, Covestro started to explore ways to ‘use’ excess materials. Asking customers for input and applying design thinking principles led them to launch the prototype of Asellion, named Select. A low-effort high-value business that is not focused on tailor-made produce but merely making materials readily available. This highly innovative distribution channel is unique, as it enables users to: 

• sell a new kind of produce – surplus stock
• in a new way – directly instead of via a partner
• to a new customer group – buying small batches instead of bulk 
• on a new scale – global instead of regional. 

In the following two years, the company scaled and rebuilt the platform (using Ruby on Rails, Java EE, and CI/CD) with a new architecture to increase capabilities and weekly deployments. However, Covestro had little experience in this field and asked Xebia and Binx.io to support and accelerate development using cloud technology

The Solution
Prepare for Growth and Global Expansion

Covestro’s ask was two-fold. On the one hand, the company wanted Binx.io to implement a scalable infrastructure for the platform. On the other hand, the platform needed to become available in China. 

To prepare for global expansion, a mixed team of Xebia and Binx.io consultants – Peter Klijn, Edze Knol, and Dennis Vink– laid the foundation. Together, they improved coding standards, shared knowledge about software development best practices, set up automated pipelines for applying infrastructure changes, and made the European platform scalable, highly available, and ready to move to China. 

The Chinese market is important to Covestro, and Asellion having a direct link to China was crucial. Together with Xebia, the company gained access to this market by adding an Alibaba extension to the existing AWS platform.

Léon Rodenburg: “In considering options, we looked at alternatives, for example hosting in free trade zones like Hong Kong using AWS. However, running directly in China turned out to be the best option. To do so, we set up an additional legal entity and applied for an ICP license.” 

Alibaba Cloud

The obvious expert to see this job through to completion was Xebia’s Léon Rodenburg – the only Alibaba Cloud MVP in the Benelux. Léon shortened the website’s response time – which was several minutes for some pages – by setting up Alibaba Cloud as a separate instance for Chinese customers, parallel to the existing AWS infrastructure, also developed by Binx.io. Data generated by this specific part of the platform runs through the backbone of Alibaba Cloud in Frankfurt to Covestro’s SAP in Leverkusen, where its headquarters is located. Doing this enabled both platform instances in Europe and China to share transactions while still ensuring that all customer information is stored in each locality per local regulations.

Diversifying the Customer Base

Asellion’s users are mainly small and mid-sized businesses, offering high-end coatings, plastics, foams, automotive products, and lighting. The Chinese market consists of many smaller producers, who can now use Asellion to sell directly to a global customer base instead of via a distributor. 

As an online distribution channel, Asellion does not aim to replace strategic relationships, but rather provide a wider audience access to Covestro’s products, at the best prices for their industry.

Thorsten:” If a long-term strategic partner requires a specific material, we naturally prefer face-to-face contact over the platform.” 

The results
A team-based software development process

Xebia and Binx.io both helped Covestro with Agile coaching, user-story-driven product development, and enabled them to scale into China (where most of Asellion’s users are located) through cloud-(native) engineering, the development of critical features, and acceleration of the software delivery process. Thorsten adds: “Our product development needed a boost. We were stuck in the process and moving slower than desired. Xebia and Binx.io’s skills gave us the confidence to partner with them. They introduced a software development process that is more visible, controllable, and based on a team approach. As the platform evolves, Xebia is still here to help. From a brief chat over coffee to getting a consultant involved full-time. Especially with regards to entering the Chinese market and helping us with AWS, the consultants’ capabilities and attitude – a mix of problem solving and persistence -were of great value.”

A Globally Scalable and Feature-Rich e-Commerce Platform

In just four months, Xebia and Binx.io helped Asellion develop into a globally scalable and feature-rich e-commerce platform. The platform’s response time significantly decreased from several minutes to a few seconds. Both in Europe and China, the architecture is completely automated with Infrastructure-as-Code, so no manual work is needed. Moreover, the platform’s scalability and high availability ensure Asellion can continue growing and expanding its business worldwide. Today, Covestro has reached 75% of its transaction target, with 600 active, mostly recurring customers.

About Asellion

Asellion is an enterprise B2B e-commerce platform that allows suppliers of chemical materials to set up their own online store and sell their products to customers directly and privately. Asellion finds its origin in the chemical industry’s need to reignite the way it does business. With a team of experts from the chemical and tech industries, border crossers, innovators, and visionaries, we transformed this need into a reactive online platform.

Asellion is part of Covestro AG, a German company that produces a variety of polyurethane and polycarbonate-based raw materials. Products include isocyanates and polyols for cellular foams, thermoplastic polyurethane, and polycarbonate pellets, as well as polyurethane-based additives used in the formulation of coatings and adhesives