Future is online
By Sharad Matade:
Though Tyremarket.com is a late entrant in online tyre sales in India, it has already surpassed its competitors. It is the highest visited pure play online tyre website in India today according to Alexa ratings, says Michael Welch, one of the pioneers in online tyre sales business in the UK who sold his e-commerce venture Blackcircles.com to Michelin in 2015
Online buying of tyres is not yet very popular in India unlike its Western countries. However, Michael Welch, one of the pioneers in online tyre sales business in the UK, has placed his bet on India owing to the future growth of e-commerce, automobile and tyre industry.
Early this year Welch, who sold his e-commerce venture Blackcircles.com to Michelin in 2015, has become a strategic investor in Tyremarket.com, a Bangalore-based online tyre selling portal, to capitalise on the future growth opportunities in the online replacement tyre segment.
“I invested in Tyremarket.com because I was convinced that with a team having an established track record of success in the sector, limited core competition, exponential growth in internet usage in the country, increasing number of consumers accepting online buying not only as a viable but a preferred way of purchasing products offers a significant opportunity and Tyremarket.com is very well positioned to take full advantage of this and becoming a market leader in the next 5 years” says Welch.
Though the online tyre selling business is at a nascent stage in India, the competition is getting intensified with the entry of new pure online tyre selling portals, and as tyre companies are ramping up their own websites and taking help of other popular e-commerce portals such Amazon , Flipkart and others.
But Michael Welch has set his target. He wants Tyremarket.com to be ‘THE” platform on which a significant share of all B2C and B2B transactions will be conducted in the next five years. Though Tyremarket.com was a late entrant in online segment, it has already surpassed its competitors. “Tyremarket.com is the highest visited pure play online tyre website in India today according to Alexa ratings,” says Welch.
India currently has 10 cars for every 1,000 people, versus a world average of 125 per 1,000, which gives a significant opportunity for growth for the auto industry. “Current replacement tyre market is extremely inefficient due to high fragmentation (50,000+ tyre shops),and is ready to embrace a new solution and domestic vehicle ownership is growing at an estimated 7% per annum with a total of 21.9m vehicles sold in financial year 16-17,” says Welch.
The company had an obvious initial challenge to convince the customers to consider tyres as an online product. “Initially it was very difficult to convince the customer that tyres can also be sold online, however now we see that customers have accepted online as a viable and convenient channel to buy products. It was challenging for us to convince the customer to pay even a very small amount as advance for booking the tyres,” recalls Welch. Today over 50% of Tyremarket.com.com orders are paid in advance.
Being an investor and having experience running Blackcircle.com, Welch’s role in Tyremarket.com is to advice the senior team to draw strategies and assist them on project initiatives to develop markets and network in the country. Welch will also be instrumental in fostering relationships with large global tyre manufacturers.
The company’s efforts and strategies to convince buyers and sellers to be on Tyremarket.com have paid off as the website has witnessed an exponential growth and a higher level of acceptance both by customers and sellers. “I strongly believe that for a business to be successful it needs to have a team that believes in what the long term vision and goal of the company is and work towards achieving it. However, finding the right people to be a part of the team is not an easy task. I am extremely proud of the team we have today, but it has been a challenge to create one,” added Welch.
To build the core team and fuel the company’s growth, CEO and co-founder of Tyremarket.com, Sanjeev Agrawal has played a pivotal role. His wide experience in the IT industry and belonging to a family involved in the tyre business have proven to be crucial to build the company. “Sanjeev’s IT experience has helped us to find logical solutions for complex problems and increase productivity by leveraging technology in an efficient way” says Welch.
Welch thinks online tyre purchases in India will grow faster than developed markets considering rise in online buyers, particularly the Y-gen. “You need to build the business close to your customers,” says Welch.
Being purely an online tyre portal, Tyremarket.com possesses unique advantages while competing with big e-commerce portals. Tyremarket.com offers a wider range, large fitment centres network and a better customer service related to tyres for buyers and sellers. According to Welch, for most of the large generic portals, tyres is a forced category primarily because of the repeat order frequency is relatively low compared to other categories that they sell.
“Secondly, the larger companies focus is to ship the products directly to the customers. Consumers on the other hand feel inconvenient when they receive the tyres at home and are expected to carry them to the store for fitment. Most of the outfits that provide fitment are not too excited about offering fitment services when they are not the entity who has sold the tyre,” explains Welch.
“They lack the necessary personal connect with the seller that tyremarket.com has due to which tyremarket.com can guaranty a higher quality of customer service,” adds Welch.
Today Tyremarket.com has over 2000 fitment partners across India. Selection of fitment centres is based on the availability of stocks and having the necessary infrastructure to give the required services like tyre fitting, wheel balancing and wheel alignment. Tyremarket.com now is also targeting tier 2 and 3 cities.
In recent years, online shopping portals have come up with innovative and risky options such as cash on delivery. Timely delivery is a basic expectation of the customer whereas the risk of rejection of goods is always there. Along with this, stocking needs huge investments. However, Tyremarket.com.com has de-risked its business model by getting the tyres provisioned by the seller and advance payments.
“Although COD was one of the biggest driving force in the exponential growth of eCommerce in India, we believe it works for products that have a very low restocking effort and related costs. There is a significant effort required in getting the tyres provisioned by the seller and it is important that we reduce the possibility of getting the order cancelled. This can only be achieved by making sure that the customer has paid for the order in full,” says Welch.
Unlike other e-commerce portals, for Tyremarket.com.com, pricing is not a prime criterion to attract the customer, rather it believes in strengthening its association with the dealers. “We offer to our customers an assurance that the price at which they are purchasing the tyres, is a fair market operating price. Apart from that, we also ensure that the customer is informed about all possible manufacturer promotions that are available in the market. On top of this we also run promotions which at times will give our customers some added discount on services,” says Welch.
Tyremarket.com also has plans to sell commercial tyres on its portal. Currently, the company sells passenger car and two-wheeler tyres.