Will dilemma of online tire business be resolved in China?

Dunlop has become the latest one among the tire makers that closed online flagship stores on Tmall.com,a major e-commerce platform in China, following suit of Bridgestone, Continental and several other famous tire brands.

Accordingly, online sales account for only about 5 percent of the after-market replacement tire sales in China.

Here comes the question: why are the tires not as popular as many other products on the e-commerce platforms in China?

Customers not attracted

Statistics showed Bridgestone’s Tmall store had 2,196 followers before it was closed. Among its 43 SKUs, the best seller was 195/60R15 in size -- altogether 107 pieces for 419 yuan each on average were sold in nearly three years.

In China, the top reason for customers to shop online is the lower price, which has boosted the prosperity of e-commerce platforms including Alibaba, JD.COM and Jumei.com.

In the meantime, fakes are also everywhere online, due to lack of effective means to supervise the online businesses.

Thus, customers are not confident of the quality of tires sold online. If the online price is not much lower than that of practical stores, the customers do not have enough motivation to buy tires online.

It is very easy for people to access the prices of different tire brands online. In order to attract customers, “cutting price” has become the most important and frequently-used method for the online tire stores to boost selling.

Besides, with small orders from scattered customers, it is very rare for the online stores to harvest a major order.

Thus, the tire brands had to shut down the online stores under the pressure of price and sales volume.

Online platform for tire business needed

O2O business has become popular in China in recent years. Yet most of the online tire sellers have not found a suitable development model in China.

China’s demand for tires is expected to grow huge thanks to the fast growing automobile industry.

Thus, the market is in urgent need of a credible tire e-commerce platform to fill the gap.

Tuhu.com gained 2 billion yuan of revenues in 2016. The platform adopts a model of “booking online+installing offline” and cooperates with various third-party platforms.

Dilemma expected to be resolved

The stable development of Tuhu.com can provide inspirations for tire firms that seek for online business.

Also, the prosperity of online tire business is widely seen in China considering the conditions in the United States and Europe.

In as early as 2014, online deals accounted for about 21 percent of the replacement tires sold in the U.S.

In Europe, about 9 percent of the tire deals were carried out via the Internet, which accounted for 10-15 percent of the total sales value of auto parts.

China, as the world’s largest tire consumer, is expected to see the resolution of the dilemma of online tire business soon if the tire firms can seize the real demand of the tire industry and the customers.