July/August 2021

BY Priya Deshmukh, Global Market Insights M otorists buying car parts online is increasingly prevalent in the UK, and is even more popular on the continent, and the trend is set to keep growing. While many garages baulk at the idea of fitting parts that a would-be customer acquired themselves, it is a rising tide that refuses to recede. In fact, according to a study conducted at Global Market Insights, the total value of the Europe e- commerce automotive aftermarket is expected to exceed $45 billion by 2026. This market is anticipated to record this growth on the back of increasing number of e-retail channels operating across the continent. Technological advancement has triggered a fundamental change in the sector in recent years. The focus on automotive by entities such as Amazon and eBay in the region has redefined the car parts sales experience for customers. Convenient solution Today, many automotive customers increasingly prefer to purchase automotive accessories and parts from such online platforms. They deliver a convenient solution for those customers in search of low-cost parts and enable them to browse through similar products, check reviews, and get quick delivery at an economical price point. The convenience and ease are among the major factors responsible for increasing e-retail channels in the region, which in turn will accelerate growth over the forecast period. Even though the automotive aftermarket has conventionally been driven by the necessary maintenance of a vehicle, the situation is changing rapidly in recent years. Today, the purpose of the aftermarket is not just to keep a vehicle running but to personalise it too. Rising affordability due to decreased prices and the availability of warranties have prompted customers to look out for automotive accessories to customize their vehicle. This has led to an increase in demand for numerous interior as well as exterior accessories, predominantly boosting the accessories segment growth over the ensuing years. The traditional sales model for the industry has been mainly dealer- based. However, in recent years, customers have started preferring e- commerce solutions for their retail experiences given convenience, speed, and reliability. Studies suggest that the direct-to-customer segment is anticipated to record a 15% compound annual growth rate (CAGR) through 2026. Assurance of top- quality automotive products with better communication with the manufacturer has led to significant segment growth. The direct-to- customer segment also delivers tailored car parts as per client requirements to suit particular applications. Competitive landscape Meanwhile, B2B, particularly business- to-small-business, is expected to record more than 14% CAGR through 2026. Product manufacturers of electronic components and sub- assembly systems are among the major consumers in the B2-small-B. While talking about the competitive landscape, it is important to mention there are a lot of industry participants. These companies are undertaking numerous organic and inorganic strategies such as mergers, acquisitions; new technology launches, partnerships to improve their business landscape. For instance, recently Amazon introduced a Wi-Fi enabled weight- sensing portable shelf to streamline restocking crucial workplace supplies and other essential businesses. The development came to light on the heels of feedback from small and medium-sized business customers regarding the problem they had with inventory replenishment – vendor- managed inventory not being very flexible, that is, since there were several constraints being levied on the basis of service area or minimum orders. Notably, companies such as Amazon, eBay, Bosch are leading companies currently at the forefront of Europe e-commerce automotive aftermarket growth. For more information, visit: https://www.gminsights.com/industr y-analysis/e-commerce-automotive- aftermarket 18 AFTERMARKET JULY/AUGUST 2021 BUSINESS www.aftermarketonline.net E-COMMERCE GROWTH Europe’s e-commerce automotive aftermarket is seeing increasing income from the direct-to-consumer (D2C) segment