London – Passenger car tire manufacturers in Europe are focussing on electronic retailing to serve increasing customer preference for convenience and low prices, Frost & Sullivan (F&S) reckons.
In a recent report, the consulting firm found that tire e-retail accounts for nearly eight percent of the total tireaftermarket in Europe.
This figure, said F&S, will continue to rise as tire manufacturers recognise the potential to access global markets through e-retail and invest in online sales and marketing tools to meet their growth objectives.
The analysis report “Opportunity analysis of e-retailing for automotive tires in Europe” found that the market earned revenues of €2.90 billion in 2014 and forecast this to nearly double to €5.47 billion in 2021 – aCAGR of 9.46 percent.
Fleets and fleet leasing companies, which account for almost a quarter of total vehicles in operation in Europe, will be principle end users of online tire retailing.
“Stable currencies, safe payment systems and strong legislations supporting cross-border e-commerce are lending impetus to the e-retail trend in Europe,” said F&S automotive and transportation research analyst Oindrila Bhar.
“Strict policies for tire labelling also instil customers with the confidence to buy online,” she added.
However, despite Europe being a mature e-commerce market, “varying levels of Internet penetration, diverse buyer expectations, and different languages” remain a challenge for tire makers seeking to expand their e-retail operations across countries.
According to the study, as competition grows among traditional suppliers in the internet sphere, achieving economies of scale will be crucial for e-retailing participants in Europe.
In addition, F&S found that providing new services, such as mobile fitting or enhanced delivery and payment options, can enable tire manufacturers to stand out in the e-retail market.
“Tire e-retailers must forge symbiotic relationships with garages and tire dealerships to multiply business opportunities,” suggested Bhar.
“Building partnerships with original equipment manufacturers that are looking to retain their share of the aftermarket will help tire e-retailers appeal to a wider customer base.”
As OE manufacturers, dealers and e-retailers leverage each other’s scale and knowledge, an integrated, omni-channel strategy will become the new industry standard in the automotive tire aftermarket.