Explore the mystery of low-priced tire electricity supplier

Since the concept of “Internet+” was born, it suddenly detonated a circle of friends from all walks of life. All industries are rapidly advancing the process of internetization, and the automotive aftermarket is standing on the cusp of this wave. As the most important component of the automotive aftermarket, tires have naturally become the focus of attention. If in the past few years, the tire electricity supplier was only a small part of the game, then one of the most profound experiences of the author in 2015 was whether it was a tire manufacturer, an agent or a terminal retailer. Everyone in the tire industry was talking about tires. E-commerce companies are all discussing business models and are rapidly transforming from static to active exploration. In this issue, we will come to a detailed review of the status and challenges of tire e-commerce.

1 Tire e-commerce overseas has matured models and companies

As early as before the exploration of China's tire companies, the mature markets in Europe and the United States have become increasingly mature. There are two representative companies. The company is one of the largest tire e-commerce companies in Europe. Delticom was founded in 1999 in Hanover, Germany. In 2013, it achieved operating income of US$5,055 million, a year-on-year increase of 10.8%. By the end of 2014, the company had built 42 online sales systems in 137 countries and had 35,000 self-operated or franchised affiliate service stores worldwide. The other is Tirerack, America's first tire online sales platform. Now the company's tire electricity supplier is unique in North America, and has established a nationwide installation network. While providing tire sales and installation, it also provides integrated product sales and services such as car decoration and car repair.

The investigation found that 21% of tires in the U.S. replacement tire market are sold online. According to another data, European tires sales achieved through e-commerce have now accounted for 9% of its total sales, which is approximately US$8 billion, accounting for 10%-15% of the local auto parts market's online sales.

2 The domestic tire electricity supplier develops rapidly, and various models are actively exploring

Compared with the overseas mature tire e-commerce development situation, although the tire industry has reached a consensus on tire e-commerce is the future trend, but the domestic tire e-commerce is still in a crowded exploration era. Among them, vertical tire e-commerce represented by Totem Tiger and tire sales has borrowed from overseas mature models and has developed a long time in China. The “Internet +” spring wind has developed very rapidly in recent years. The industry is generally optimistic about the development model.

Another model is platform-type tire e-commerce based on JD.com, Taobao, and Tmall. Most of these platforms integrate the resources of some tires online and offline. For example, many tire brands have opened official flagship stores on the Tmall platform, and many tire dealers and retailers have opened shops on Taobao. These platforms do not need to be purchased for sale. They just provide an online tire trading platform and integrate a certain amount of offline service resources. The operating right is handed over to the managers of different stores for their own operations.

Another model is the self-built e-commerce platform represented by Michelin, and Michelin has launched its own e-commerce platform with its brand appeal and control over Chica. Consumers can buy Michelin tires at the official e-commerce platform and then install them at their offline retail outlets.

In addition, B2B's tire e-commerce platforms such as the Amoy steam outlet and Tire King are also actively exploring their respective business models. Although the share of tire e-commerce in China is still very small at present, its impact on the tire industry is huge.

3 Why are the prices of tire electricity providers so advantageous?

The owner of the tire shop is often asked by the owner of the tire shop on the car and the WeChat platform. “Why is the price of tyres on the way Tiger is so cheap, the price of online sales we can't even get in.” In fact, this is also a lot of tire people even Many consumers' questions. Then the author will talk about where the price of vertical tire electricity supplier is low.

1 Low price sources from tire brand agents

Many readers have asked me such a question: Where are the cheap sources of vertical tire electricity suppliers coming from, and are they coming from manufacturers? Currently, vertical tire e-commerce is still in a period of rapid development, and the overall share of scale is still very high. Small, unable to purchase directly from the manufacturer. Most of the sources come from big agents in different areas of different tire brands. This is actually a process of breaking the concept of regionalization. For example, there is no concept of regional agents in the US tire industry. The distribution model of traditional tires adopts a regional agency system, and the prices of agents in each region are different from those obtained by manufacturers. Especially in the context of excess capacity of tires, tire manufacturers will perform certain tasks during certain periods in order to complete sales tasks. Putting out a lot of low-priced tires to some of the big agents with financial strength is the root cause of the serious problem of the “cross-border” problem in the tire industry. Vertical tire e-commerce in the early stages of development is to rely on these low-cost sources to ensure price advantage, but also to ensure that it is a genuine tire.

2 Remove the middle ring and let the tire reach the consumer

The essence of e-commerce is to break the regional monopoly, remove intermediate links, and make prices transparent. As an industrial product, tires have long been known for their uniqueness. The marketing model has been used by manufacturers to large wholesalers, then to small wholesalers and retailers, and finally to the traditional model of the owner, the traditional tire marketing model at each level. Agents need to have profits. This sales model needs high margins to support, so consumers pay higher transaction costs. Tire e-commerce is to remove the intermediate links as far as possible, so that the channels are flattened and tires reach consumers.

3 Internet thinking uses ultra-low profits to cultivate new consumer habits

In addition to being able to obtain low-cost sources and remove intermediate links from profit-making consumers, the Tier e-commerce platform's innate Internet mindset is doomed to use affordable prices to cultivate consumer spending habits through the e-commerce platform to purchase tires. This is one of the reasons why buying tire prices on the Internet is so low. Many e-commerce platforms have very low profit margins, and many products even have zero profit sales. Whether profits are not the most important issue for the e-commerce platform is currently under consideration. Solving the pain points of users and improving the user experience is the foundation of the tire e-commerce platform. Jingdong has no profit so far, but Jingdong has actually changed the shopping habits of many people. This is a striking example.

4 Vertical E-commerce earns economies of scale and efficiency

How does the low-margin, even zero-profit, tire e-commerce company make money? The mature vertical tire e-commerce in the future is mainly to earn the economies of scale and efficiency. The money to make economies of scale is well understood. At the same time, the average cost in all aspects will be reduced accordingly.

Tire vertical e-commerce has two major advantages in macro terms, one is the optimization of the supply chain, and the other is the optimization of store efficiency. From the aspect of social economy, tire e-commerce actually increases the overall efficiency of tire sales, and earns money for efficiency. Vertical e-commerce can complete two points, one is to predict through big data, to collect and collect tires, and to do a certain percentage of allocation to each warehouse. The compression of the stock turnover cycle is the savings that e-commerce can save for the entire society.

Another point, from the perspective of user experience, buying tires in a vertical electricity supplier is an appointment system. The customer bought tires on the Internet today. The e-commerce platform will tell him to go to the store tomorrow or the next day. When he arrives at the store, the tires he needs, even if they are large-size tires or rarer tires, are already waiting in the store. The customer, not the customer, waits to adjust the tires, which greatly improves the efficiency of the store and saves the user's time. The improvement of the overall social efficiency will generate a huge profit margin. Whether it is the popular carpooling software or the food delivery service is to increase the operating efficiency of the society. Tire e-commerce is not making a difference, but is optimizing the tire industry, improving the efficiency of the entire industry, and making money in this process of improvement.

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