There is no getting away from it. E-commerce is growing exponentially. Driven by a younger demographic and consumer preference for convenience, online purchase is fast becoming a way of life, even for items that may not typically fit the traditional ‘mould’ (pun fully intended) – tyres being one such example.
The United States replacement tyre market has experienced a 45 percent growth in online tyre sales over the last three years, while the number of units sold at physical stores declined by 11 percent. This, according to Circana, (formerly IRI) and The NPD Group. So much so, in fact, that e-commerce now represents 14 percent of all replacement tyre sales, up from 9 percent in 2019.
Similarly, online tyre sales are growing in both the United Kingdom and Europe, driven by convenience, a wider selection and the increasing popularity of online shopping. The increasing adoption of electric vehicles that require specialised tyres, readily found online, is another significant contributor. In line with the global trend, the shift towards e-commerce in the tyre market is expanding and is expected to continue growing, with online sales projected to increase rapidly in Europe, potentially doubling to 20 percent of sales within the next few years – largely driven by factors like the rise in EVs, demand for high-performance tyres and advancements in tyre technology.
The ease and convenience of online shopping are major factors driving this growth, allowing consumers to access a wider range of brands and models from the comfort of their homes. The trend is expected to continue, with online tyre buying gradually evolving towards a ‘buy and fit’ model, potentially using mobile technology to streamline the process. Interestingly too, the average price of a tyre sold online has increased 54 percent over the past three years, compared to a 32 percent in-store increase. While economic price elevations have played a role, variations in product mix are contributing to some of the spending trends developing across retail, Circana says.
And, according to www.tirereview.com, low-income consumers, in particular, are seeking value and stretching their car care needs and maintenance-related dollars to offset the pinch they are feeling from rising grocery prices, thereby driving them to explore the internet for deals. While convenience is the biggest motivator for online tyre buying, the internet marketplace lets customers compare costs from various retailers, while also providing competitive prices and special discounts, that attract budget-conscious customers.
E-commerce platforms like Amazon and eBay have expanded their product offerings to include tyres, taking advantage of their vast logistics networks and large consumer bases, to capture a significant market share. Prominent tye manufacturers such as Michelin, Goodyear and Bridgestone in the US have also entered the e-commerce industry, selling directly to customers via their websites, says www.tirereview.com. Moreover, newer entrants, such as Blackcircles, have developed novel business strategies, such as local garage partnerships and mobile installation services, to improve the convenience of online tyre shopping.
WHAT HAPPENED TO BLACKCIRCLES SA?
Blackcircles – an online tyre retailer, founded in 2001 by Scottish entrepreneur, Mike Welch, who eventually sold to manufacturing giant Michelin, in 2015, has rapidly expanded its presence across the globe. In 2021, Blackcircles entered the South African market, operating under parent company Sumitomo Rubber South Africa, but its presence here, was short-lived.
In September 2024, the company announced that it was ceasing operations in South Africa. According to Sumitomo Rubber, their Blackcircles division experienced various challenges, among them, initially ensuring visibility in the e-commerce space. That said, SRSA said the decision to close Blackcircles was a result of various factors, not necessarily relating to the readiness or receptivity of the South African market to online tyre purchasing. “We still believe e-commerce has an important role to play in the market and have taken on board valuable insights and learnings through this experience,” SRSA.
The tyre maker added that the prospect of Blackcircles returning to South Africa, was not out of the question.
QUICKTYRE ENTERS THE MARKET
Meanwhile, we are seeing new entrants to the online tyre purchasing platform, with ambitious plans to capture the e-commerce tyre space. Durban-based QuickTyre, which began operations in 2022, is one such example.
Utilising a fresh approach, the developers of QuickTyre have come up with an ingenious scheme that not only allows consumers to compare prices and pay for their tyre purchase online, but simultaneously enables them to book a specific time with a dealer of their choice, to fit them, thereby alleviating much of the frustration and waiting times associated with tyre replacement. More important, the transaction belongs exclusively to the dealer. “We do not sell tyres,” says Jared Krause, “we are simply a conduit between the consumer and the dealer. Prices and services are setby each dealer at their discretion. We are a tech company (albeit with loads of tyre knowledge and experience) and our focus is on that part of things – making the best experience.
Any new business originating from our online platform belongs to the dealer, with QuickTyre only generating a small administrative fee from each sale”. Since its inception in 2022, QuickTyre confirms its platform is fast gaining traction, proving popular with today’s consumer who can now compare tyre prices quickly and efficiently, alleviating the need to shop around. One dealer currently signed up to QuickTyre, claims the platform has generated hundreds of new leads for his shop, and that this exposure alone, is sufficient motivation for them to belong to the online platform. QuickTyre says their objective is to grow the platform to include the participation of a greater number of dealers countrywide and further rolling out other versions of its software with leading retail groups. “Tyre purchase is a grudge purchase, as it is,” says Erik Aissing “Finding a way to streamline the transaction for the consumer, can ease some of the resentment traditionally associated with forking out for tyre replacement.
Of course, while online tyre purchase may benefit the consumer, some dealers argue it is damaging to the trade, especially in South Africa, where market players are used to the traditional, less transparent business model of in-store buying. When a similar online tyre comparison tyre purchasing platform – ‘I Want Tyres’ -was ready to launch some years ago, retail groups were outraged, viewing its inception a massive threat, with consumers who would now be privy to their competitors’ pricing. Suffice to say, I Want Tyres met its inevitable demise, before it could begin to offer the motorist the option to compare tyre prices, pay and book online.
In the months and years that followed, franchise groups and manufacturers set up their own individual online tyre purchasing websites, but these online platforms were dedicated exclusively to their products and services. This is not necessarily what the consumer wants. They want to be able to choose between brands, sizes, locations and most of all, prices. Which begs the question: “Can the South African retailer afford not to be an active player in the e-commerce online tyre space, given the evolution of the global market”?
