VEREIN FREIER ERSATZTEILEMARKT E.V.European Market Study On l ine Trade : Update June 2018
W i e s b a d e n , J u n e 2 8 t h , 2 0 1 8
2
TOPICS
PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market
Copyright 2018 | 2HM & Associates GmbH
01 PROJECT SCOPE AND HISTORY
02
PROJECT SETUP03
MAIN INSIGHTS: ONLINE TRADE
3PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market
Copyright 2018 | 2HM & Associates GmbH
01_ PROJECT SCOPE AND HISTORY
2HMforum. | Company Profile
DRIVING GROWTH
› 2HM RESEARCH + CONSULTING is an internationally active research and consulting company and a pioneer in customer centricity consulting
Automobile Industry Partners(excerpts)
2HM GROUP
360°CUSTOMERCENTRICITY
LEADSSALESLOYALTY
4
01_FIRMENPROFIL
PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market
Copyright 2018 | 2HM & Associates GmbH
01_ PROJECT SCOPE AND HISTORY
› Since 2012, every three years, VREI conducts a comprehensive study regarding online trade in the automotive spare parts market in cooperation with 2HM
› So far, about half the manufacturers of car parts organized in the VREI Association participated in this study, in order to obtain a reliable basis for strategic decisions around e-commerce and digitalization and to be kept continuously up-to-date regarding the state of development of e-commerce
› The study has been repeated in 2018 in order to verify, update and validate the statements from the first two studies
Wide Media CoverageProject History
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01_FIRMENPROFIL
PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market
Copyright 2018 | 2HM & Associates GmbH
Additional Results…
… at online shop/platform level:
› Identification/verification of key players
› Analysis of the trends and developments
› Analysis of the flow of goods
› Determination of the pricing process/strategies
… at product level:› Determination of sales/turnover for part groups
› Identification of top product groups
› Identification of top brands and their shares
› Identification of online price level
Key objectives of the study:
› Determine the current online market volume of the passenger car/IAM aftermarket in Europe in 2018
› Examine the market growth and development analogous to the forecasts determined in 2012 and 2015, as well as to update the forecast until 2021
01_ PROJECT SCOPE AND HISTORY
Project Scope
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01_FIRMENPROFIL
PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market
Copyright 2018 | 2HM & Associates GmbH
01_ PROJECT SCOPE AND HISTORY
Market Valuation
Online Trade
eBay Motors Tracking
Secondary Analysis (GER)
Expert interviews
Telephone interviews: online shops
Secondary Analysis
Sales product groups
Global Industry Analysts / BCG
Company databases(e.g.Creditreform, Hoppenstedt, D&B)
Statistical offices
Additional secondary studies
Sales product groups
Sales Data: Shops
Telephone interviews: internal country experts
As in 2015, the following online-dealers are in
focus (among others):
Amazon Analysis
Top seller, brands and prices
Setup and Sources for Valuation The study focuses on the Top 5 automotive
markets in Europe, as well as Poland – a strongly
developing Eastern European market
7
TOPICS
PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market
Copyright 2018 | 2HM & Associates GmbH
01 PROJECT SCOPE AND HISTORY
02
PROJECT SETUP03
MAIN INSIGHTS: ONLINE TRADE
8PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market
Copyright 2018 | 2HM & Associates GmbH
Development online share/ total market
02_ MAIN INSIGHTS – ONLINE TRADE
Minimum level
Maximum level
5%
10%
12%
5%
12%
15%
0%
5%
10%
15%
20%
25%
'09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25 * estimated
CAGR: 13% 7%* 3-4%*
Online Share
What Was Seen in 2015?
In Germany, a gradual slowdown of the online growth was expected for the next three years
Main reasons for the expected growth slowdown:
› Achievement of use limits in the DIY and DIFM target groups
› Increased level of vehicle complexity
Growth Assumptions
9PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market
Copyright 2018 | 2HM & Associates GmbH
7% 8%
5%7%
4%
11% 11%9% 9%
8%
2012 2015 2018* initial indications
02_ MAIN INSIGHTS – ONLINE TRADE
Share of online sales volume – 2012 and 2018*
*Average value based on two scenariosSource: 2HM & Associates GmbH
Indications for 2018?
The expected slow down has not yet arrived.
Primary reasons for growth dynamics:
› The development of the B2B trade and the workshop handling foreign (purchased) parts are large levers
› Digitalization and automation encourages e-commerce trade
› The boundaries between online and offline trade are becoming blurred
*13-17%
*15-20%
*10-15% *12-15%
*9-12%
Status Quo
10PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market
Copyright 2018 | 2HM & Associates GmbH
Online Product Types?› The actual online share
depends on the product class
› Highest online share can be assumed for easy products (+30% compared to overall average)
› Lowest online share is assumed by complex products (-50% compared to overall average)
Sales and online share of sold spare parts by product classification
02_ MAIN INSIGHTS – ONLINE TRADE
Online Share
Source: 2HM & Associates GmbH
0%
5%
10%
15%
20%
Maximum level
Minimum level
Complex • Clutch kit• Dual mass
flywheel (DMF)• Turbocharger• …
Easy
• Work lights, work lamps
• Wipers• Oil• …
Regular
• Particle filter• Brake shoes• Brake discs• …
Status Quo
11PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market
Copyright 2018 | 2HM & Associates GmbH
Top Types
› Brakes (brake discs, brake pads, brake calipers) and equipment (tow bar, roof bar, wipers) are generating the highest turnover (within the tracked product groups)
› Regarding sales volume, more fast-moving products (oils, spark plugs, filters) are listed as top
Online relevance of product groups
02_ MAIN INSIGHTS – ONLINE TRADE
Rank Product groupSales
amount
1 Brake disc 2
2 Tow bar 1
3 Standard shock absorbers 2
4 Brake pad for disc brake 4
5 Roof bar 1
6 Muffler 1
7 Clutch kit 1
8 Interior air filter 1
9 5W-30 1ltr.
10 Headlamps 2
Sales (in €)Top 10 of the tracked 68 product groups
Sales (in units) Top 10 of the tracked 68 product groups
Rank Product groupSales
amount
1 5W-30 1ltr.
2 Brake disc 2
3 Windscreen wipers 2
4 Spark plug 1
5 Brake pad for disc brake 4
6 Standard shock absorbers 2
7 Oil filter 1
8 10W-40 1ltr.
9 Gas Spring 2
10 Wheel bearings 2
Sources:sales data, eBay Motors and online shops
Status Quo
12PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market
Copyright 2018 | 2HM & Associates GmbH
Lurking or Playing?› B2C markets are often driven
via the “easy” product groups and DIY consumers
› Players such as eBay motors and Amazon are strong in this B2C space
› Amazon has grown significantly in the B2C space
› Experts assume at this juncture that Amazon is not yet significant in the B2B market
› Independent workshop views about Amazon are still open
German e-commerce automotive aftermarket estimates in €
02_ MAIN INSIGHTS – ONLINE TRADE
Source: 2HM & Associates GmbH
20151.75 Billion €
Other68%
eBay26%
Amazon6%
eBay Motors and Amazon
13PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market
Copyright 2018 | 2HM & Associates GmbH
67%
33%
0%
20%
40%
60%
80%
100%
Total
02_ MAIN INSIGHTS – ONLINE TRADE
Establishment as key player (e.g. increase in market share/revenue)
“More people will get to know about Amazon in the automotive sector. eBay has been active in this sector for a longer amount of time that's why they are bigger at this point.”
“They are very strong in the online business and will use this position to increase their presence in the automotive market. They are thinking for the future.”
“They have got all the sales and logistics channels in place. Their business model allows them to grow much quicker then any independents on the market.”
No establishment as key player (e.g. spare parts sales not suitable for Amazon, not a reliable business partner)
“Unproblematic stuff that customers can install themselves could increase on Amazon, but more sophisticated parts are far too expensive and that will not change.”
“Amazon does not understand wearing parts and the business is too small to hire specialists. Beyond wipers, Amazon cannot develop much further.”
% answers
n=67
Perspectives on Amazon
Assessment of the future role of Amazon
14PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market
Copyright 2018 | 2HM & Associates GmbH
02_ MAIN INSIGHTS – ONLINE TRADE
% answers
Assessment of the future role of Amazon
Establishmentas key player
No establishment as key player
Amazon?Respectfully Unsure› Compared to 2015 where 50% of experts were not able
to estimate the future role of Amazon, only 19% of respondents in 2018 were uncertain.
› From those willing to estimate, approximately 2/3 expect that Amazon will fail in becoming established in the online spare parts market
› Strongest Player in B2C E-Commerce.
› Besides being a B2C Player, Amazon is occupying the B2B-market more and more
› “Amazon Automotive” has been selling spare car parts in the USA for many years
› “Amazon Vehicles” went live in the USA in 2016
› Amazon has entered the European Automotive Aftermarket. New job offers for Automotive Vendor Managers in Europe
Source: 2HM & Associates GmbH
Amazon
67%
33%
0%
20%
40%
60%
80%
100%
Total n=67
15PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market
Copyright 2018 | 2HM & Associates GmbH
37%
44%
64%
63% 56% 36%
0%
20%
40%
60%
80%
100%
End users
Workshops
02_ MAIN INSIGHTS – ONLINE TRADE B2B sales will become the next battlefield
› Almost half of the revenue of online shops is coming from the commercial side
› Large wholesalers will benefit – the local and regional levels will suffer
› B2B has other requirements than B2C-platforms
OEM – Market: › Partslink24
IAM – Market: › Tyre24 (tires; but also spare parts and workshop equipment) › Alibaba (dominates the Chinese market - MS=80%)› Amazon Business (already launched in USA)› Openbay and RepairPal (USA), WhoCanFixMyCar (U.K.) –
potential parts aggregators, as well as selling partners
Sales volume
Source: 2HM & Associates GmbH
Business-2-Business
201820152012
Assessment of the future role of Amazon by the respondents
16PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market
Copyright 2018 | 2HM & Associates GmbH
02_ MAIN INSIGHTS – ONLINE TRADEMergers, Acquisitions and Co-operations
› In 2017, LKQ acquired a number of automotive parts distributors:
› AD Polska (now Elit)› Stahlgruber› Optimal AG via Stahlgruber› Andrew Page and PR Reilly via Euro Car Parts› Rhiag-Inter Auto in 2015
› The Parts Alliance (PA) acquired:
› GSF Car Parts (2015 )
› SAS Autoparts (2016 )
› Waterloo Motor Trade (2016)
› BMS Superfactors (2017)
› BBC Superfactors (2017)
› PA was purchased by Uni-Select Inc.
› Groupe PSA plan to enter India, North America and ASEAN markets. They recently acquired:
› Mister Auto (2016)
› General Motors' Opel and Vauxhall brands (2017)
› Alliance Automotive Group was acquired by Genuine Parts.
› HELLA/ Nordic Forum purchased inter-team and Iparts in Poland in 2015 and 2016, respectively. HELLA also acquired FT from Denmark in 2015.
Shooting stars and unknown players
Established international players
Established national players
Trends and Developments
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TOPICS
PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market
Copyright 2018 | 2HM & Associates GmbH
01 PROJECT SCOPE AND HISTORY
02
PROJECT SETUP03
MAIN INSIGHTS: ONLINE TRADE
18PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market
Copyright 2018 | 2HM & Associates GmbH
03_ PROJECT SETUP
eBay tracking
Consoli-dation
Module 2 | Expert interviews:a) Country experts
b) Operators of online shopsValidation and fine-tuning of collected data,
collection of background information
Market assessment
Module 1 | Analysis of secondary data:Analysis of existing
market data
Module 3 | eBay tracking/ Amazon analysis: Validation and fine-tuning of collected data,
collection of background information
Consolidation and reporting: Validation of the estimation model, updating of the information at shop level, market valuation
Expertinterviews
Secondary data
ModularSimilar to 2015, the concept is structured in a modular manner, whereby the modules do not build upon each other in a strictly hierarchical mode, but interlock regarding contents and the timeline, as well
Amazon analysis
Data Gathering
Data Analysis
Decision Basis
Three Modules
19PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market
Copyright 2018 | 2HM & Associates GmbH
03_ PROJECT SETUP
Market coverage› 15 Product families
› 69 Product groups
eBay tracking:› Observation of 7 mill.
transactions
› 31 GB data volume
Market Distinction – Observed Products
20PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market
Copyright 2018 | 2HM & Associates GmbH
03_ PROJECT SETUP
I. General information on online shops
II. Target groups of online shops
III. Flow of goods in the online market
IV. Prices in the online market
V. Trends and developments in the online market
DETAILDistribution Channels
Degree of Professionalism
Premium vs. Budget Brands
Parts Identification Systems
Development of Target Groups
Target Groups per Turnover
Purchase Reasons
Development of the Market Structure
Supply Sources
Development of supply sources
Returns: reasons/product categories
Sales & Online Share by Product Classification
Price Strategies
Price Differences
Price Development
Growth Prediction
Main Market Development Drivers
I.
II.
III.
IV.
V.
Study Topics – At a Glance
21PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market
Copyright 2018 | 2HM & Associates GmbH
03_ PROJECT SETUP
✓ Up-to-date overview of trends and developments in the online trade of vehicle spare parts across markets
✓ Assessment of the online development (price and market significance) for your own product groups
✓ Sound basis for strategic decisions
✓ Identification of essential market players and assessment regarding their market significance
✓ The only study including market overview from the supplier‘s point of view
Study Advantages – At a Glance
Contact
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tel: +49 6131 32809-153
THANK YOU!
22PARTSLIFE-Kongress | Online Trade Automotive Spare Parts Market
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