The sale of tyres, according to Frost & Sullivan, is by far the largest segment amongst all automotive replacement parts sold online. Sales contributed close to 46% of total aftermarket e-retail revenues for auto parts in Europe, worth €2.5 billion in 2013.
"Rapid growth in online tyre retail is indicative of a shift in aftermarket consumer behaviour with respect to cost, availability and choice," said Frost & Sullivan senior research analyst Anuj Monga. "The online sale of tyres currently constitutes 7.8% of the total tyre aftermarket. Growth in online tyre sales therefore challenges the current decline in sales, as witnessed by the broader tyre aftermarket, particularly through traditional retail channels."
The impact of the global economic recession has been visible across all industries in Europe, with the automotive industry having been hit the hardest, a major reason for the slump in overall tyre sales.
Online tyre retail, however, will constitute roughly about 20% of the total tyre replacement aftermarket revenues by 2020. "France, Germany and Russia are countries leading this growth with an online tyre retail penetration of 12%, 11% and 8% respectively, while the UK, Italy and Spain are also expected to experience strong growth," Monga continued.
Online tyre retailers are matching service levels of traditional tyre retailers to facilitate this growth, which includes efficient tyre fitment and, in most cases, return of worn out tyres. While price discounts of tyres sold online is a major pull for customers, the possibility of choosing from a wide variety of make and models is also a key driver. Another area where tyre e-retailers can possibly differentiate themselves is that of refurbished tyres. eGommerce, an Italian start-up tyre e-retailer, is already exploring this avenue. Other discounts and freebies also belong to the tried means of attracting customers to the online channel.
New market players are attracted to the market, as customers show a growing confidence in purchasing replacement tyres online. The shift in consumer attitude has lead companies to offer personalised shopping solutions, of which the "doorstep delivery and fitment" service is the most popular. Offering consumers a choice of tyre fitment at a location of their choice has already triggered considerable attention, with companies like Allopneus (France) leading the way in enriching the whole customer purchase experience.
In terms of revenues, German pioneer Delticom led the market in 2013 with €600 million in sales. The company has 137 online shops spread across 42 countries and a network of 35,000 professional fitting garages. Other noticeable names within the tyre e-retail market are Blackcircles.com, Oxyo-Pneus, PopGom, Pneus Online, Oponeo.pl and eGommerce. These new market entrants are expected to develop new business models in the future, which will foster further growth in online business. The market is, however, expected to witness significant consolidation in coming years, as companies look to gain a stronghold in this competitive environment.
