Tireworld Insight: E-commerce VS conventional tire dealership?

The booming e-commerce has become a heated topic in the tire-making world. A controversial topic as it is at first, the sales instrument is now more and more widely accepted by market practitioners.

A survey conducted by Tireworld shows that e-commerce now contributes 9 percent of tire sales in Europe, whereas in China, the proportion stands at less than 5 percent, indicating huge room for future growth.

It’s projected that the conventional mode of regional sales agents will be gradually altered or even replaced in the coming years.

To date, altogether 9 tire brands have been available at the high-end e-commerce platform Tmall.com. At the same time, trading has also been vibrant on other platforms like the JD.com.

Liao Chuhang, channel manager of Michelin’s sedan and light truck tire segment, disclosed that the number of Michelin’s Tire Plus fast repairing stores had exceeded 1,000, and the figure is expected to reach 2,000 in the next five years.

In the second half of 2014, Michelin will officially launch an e-commerce sales campaign, said Liao.

In the meantime, tire e-commerce business in leading tire production regions like east China’s Shandong province and Jiangxi province has witnessed swift expansion, as more and more entrepreneurs deem e-commerce as a new way to drive growth and improve profitability.

Nevertheless, it’s still a long way to go for the development of e-commerce in the Chinese tire industry, analysts noted.

Chinese consumers are still used to buy large items like tires at a physical store. “That habit is not easy to change,” said a tire dealer.

(Edited by Olivia, olivia@tireworld.com.cn)