Apart from a number of online tyre selling companies, tyre majors such as Apollo Tyres and Michelin India too are promoting sale of tyres through their own online portals
Buying tyres on e-commerce portals in India may not be as popular as it is in the developed markets, but it is gaining momentum in India. Tyre companies, in anticipation of the future trends in the European and other developed markets, are aggressively narrowing their focus on the online tyre selling business.
In a siginificant development in this segment last year, French tyre company Michelin bought a 40% stake in Allopneus S.A.S., a French internet tyre retailer, for $64 million and 100% stakes in Blackcircles.com, a Scottish online tyre company, for £50m to boost their online offering for consumers.
According to a research conducted by Michelin, seven in every 10 vehicle owners in the UK do their auto-related purchases online.
Apollo’s initiative
Indian tyre maker Apollo Tyres Ltd , which is now keen on expanding its European footprint citing bigger profit margins, acquired Reifencom GmbH, the largest tyre distributor in Germany with an online presence in six countries – Germany, France, Italy, Austria, Switzerland and Denmark– for Euro 45.6 million.
Commenting on the acquisition, Neeraj Kanwar, Vice-Chairman and Managing Director, Apollo Tyres, said: “The acquisition is a strategic fit in growing our European business. It will enable Apollo to improve its mix of distribution channels in Germany and Europe, and aid in increasing the visibility of Apollo and Vredestein tyres in the offline and especially the fast growing online retail space.”
Entry of online portals
In India, online tyre selling business is picking up, according to Ankit Gupta, Business Development Manager at changemytyre.com, probably India’s first dedicated online tyres selling company. “Selling tyres like any other product has its specific challenges. We have certainly seen an uptrend in the number of people who have been replacing tyres through the online sales channel. The tyre customer that buys online has evolved and relies on product reviews , product discovery , price discovery and company discovery like any other product category,” says Gupta.
Apart from changemytyre.com, there are a few other online portals, tyremarket.com, tyredekho.com, part of cardekho.com, and tyreonwheel.com, which are dedicated websites for selling tyres. Along with these, tyre companies have their own portals that guide tyre buyers to make the best purchase decision. There are also reputed e-commerce portals like Amazon, Flipkart , Snapdeals and others that sell tyres on their portals, but most of them are restricted to only passenger car tyres.
Michelin’s online push
Last year, to cater to online buyers, Michelin made their tyres available on Snapdeal, via its countrywide authorized dealerships. According to Michelin, a consumer can now easily place an order online to purchase Michelin tyres from an authorized dealer and request for fitment at a time and place of their choice.
On the Michelin brand page at Snapdeal, the Tyre Selector will help a customer find the best fit tyre for a vehicle. Once the tyre choice is confirmed, the customer can select the closest Michelin authorized dealer for the purchase and to book a tyre fitment appointment.
The consumer has the option of same-day free fitment, as well as access to exclusive offers on services like alignment and balancing. All passenger car tyres sold through Michelin authorized dealers on Snapdeal are guaranteed by Michelin.
“As part of our initiatives to redefine the way tyres are bought and sold in India, we are pleased to bring this unique opportunity to our Indian consumers via Snapdeal,” says Mohan Kumar , Commercial Director of Michelin India.
“Snapdeal with its large subscriber base and pan India reach has been an obvious choice. We believe this new channel will augment our existing distribution and enable our dealers with a parallel sales pipeline. For consumers, this would mean a quality guarantee on the fitment process, which is critical for tubeless tyres,” he adds.
Impact of demonitisation
The cash crunch following demonitisation of high-value currency notes in India has affected offline tyre and automobile sales. However, demonitisation and the present drive towards cashless transactions are expected to help the online tyre business much in the long run. “We have not been affected by demonitisation like other sales channels, but I would like to state that it is a move which in the long-term will benefit online business in general,” says Gupta.
At multi brand tyre outlets or even exclusive brand showrooms, dealers generally push tyres which bring higher margins and so many high-performance tyres remain stocked and unavailable to customers. In this scenario, online tyre websites showcase all types of tyres, from which customers can compare prices, quality and are also guided on best tyre options for their vehicles.
“We help the tyre brands to showcase their entire range on changemytyre.com, even the slow-moving ones. We enable tyre brands to communicate directly with the consumers, influence the purchase and drive a buyer to their dealer. Changemytyre.com is a cost effective platform built to improve sales for tyre companies, without competing with their existing offline sales channel of tyre dealers. In fact, it complements the tyre dealers’ efforts,” says Gupta.
Major challenges
The online tyre selling business is however not easy as it seems. Main challenges are offering wide product ranges at competitive prices , arranging strategically located fitment centres and logistics.
“The biggest challenge in selling tyres online has been in providing an end-to-end solution i.e. from giving a price to the customer which is competitive till getting a tyre fitted onto the customers’ vehicle. To be more specific, one of the biggest hurdles experienced by online sellers of tyres has been the product delivery and logistics involved,” explains Gupta.
Apollo Tyres also attributes the success of Reifencom GmbH to its efficient logistic system and procurement of tyres and rims from leading tyre manufacturers.
“At changemytyre.com, we have been successful on this particular front with our proprietary technology in the form of a tyre dealer-specific mobile phone app called the ‘Tyre Retail Caddy’ and our unique website interface for the customers looking to buy tyres.
The ‘Tyre Retail Caddy’ mobile app and the ‘changemytyre.com’ mobile website together bring in seamless connectivity, starting from a customer selecting a specific tyre and ending with fitment of the tyres at the tyre dealer’s store,” says Gupta.
Apart from fitment of tyres, online tyre sellers have to give other attractive offers such heavy discounts, wheel alignment, Road Damage Warranty programme, air pressure check etc.
Despite these challenges, dealers see bright prospects for online tyre business in the near future.