Editor: Meng Lin
Push: Tire International Perspective
Tire E-commerce
Tire E-commerce came in a raging manner in the past few years, and a large amount of capital was pouring into the tire industry. However, after several years of fighting, the current tire e-commerce has formed a stable situation. At the same time, some of the leading tire e-commerce has begun to prepare for listing.
E-commerce has a great impact on the entity, and the same is true for tire e-commerce, which has brought huge impacts to traditional channels. In addition, the greater impact of traditional channels is a psychological impact. It feels that tire e-commerce can replace traditional channels at any time, making them frightened.
Can tire e-commerce really take away traditional channels?
Conclusion
Regarding the matter that tire e-commerce can really kill traditional channels, Tire International consulted many people in the tire industry, and they all said that tire e-commerce cannot kill traditional channels, and they have the value of existence.
In the future, after all, it will be a situation where tire e-commerce and traditional channels coexist.
Advantages of traditional channels
Traditional tire channels are mainly manifested in tire dealers and tire stores. They have two major advantages that tire e-commerce cannot compete.
First: Cost advantage, tire dealers and tire stores in traditional channels have natural advantages in cost. Behind the regularization of tire e-commerce is the high cost. As tire dealers and stores, they also make corresponding changes according to actual conditions, so as to better control costs.
In fact, the gross profit margins of traditional channels and e-commerce are similar now, but if traditional channels have cost advantages, they can survive well. Tire e-commerce has high cost and can only face loss or attract investment and continue to burn money.
Second: Different demands. As a traditional channel, is more eager to survive and live without worries about food and clothing. When facing this situation, they will become more at ease in their operations. As tire e-commerce, it is completely different. They must be responsible to shareholders. They must make the largest scale and make profits good. Their pursuits are all high-end. Tire e-commerce has high demands and must require high returns. However, the current tire industry is difficult to meet the demands of tire e-commerce.
has different demands, which will lead to different choices in actual business, and will naturally produce different results.
Special attributes
Tires are a relatively low frequency and low repurchase rate product. Faced with this special attribute, it is difficult to quickly seize the market with funds. This is the current situation where all tire e-commerce companies are facing such a difficult situation.
This is why some tire e-commerce companies have been doing it for more than ten years and are still struggling. This is due to the low frequency and low repurchase rate of tires. This special attribute of
tires also provides huge opportunities for traditional tire dealers and stores. No matter how low-priced subsidies or crazy spending of money, it is difficult to kill traditional channels in a short period of time.
Disadvantages of tire e-commerce
The biggest advantage of tire e-commerce is that they are rich and can squander human nature. Therefore, they will dig capable senior management from various large tire factories to protect their companies. Some senior management staff of often have annual salary of millions, which may be an astronomical figure for the ordinary tire industry, but it is a very common phenomenon in the e-commerce industry.
Tire e-commerce requires regularization. Behind the regularization, all links must be fully compiled, which leads to a much higher cost. Faced with the tire industry with a low gross profit margin, the high cost of tire e-commerce will become their biggest stumbling block.
The biggest problem with tire e-commerce is that the cost is too high, and the overall gross profit margin of the tire industry is too low.
is difficult to go public
Now most tire e-commerce companies are in a state of weak profit or loss as a whole. It is more difficult to list in China or Hong Kong if they continue to maintain this financial situation. After all, the very core requirement for listed companies in these places is to have good profitability.
The best choice for tire e-commerce to go public is to go public in places like the United States, but due to restrictions on conditions, it may become more difficult to go public in the United States now.
If tire e-commerce cannot go public, then no matter how large the scale they do, it will not be able to get returns to shareholders. If the return rate for shareholders cannot be achieved within the agreed period, many capitals will choose to stop chasing investment funds. Once the subsequent investment of tire e-commerce is broken, tire e-commerce will also face destruction.
International Tire Perspective
Tire Industry has been ravaged by e-commerce, but with its unique and attributes, it still gives traditional channels a lot of opportunities, and also gives traditional channels space to survive.
As a traditional channel tire dealer and store, as long as the cost is controlled, even if the e-commerce company comes, it will not be killed.
The coexistence of tire e-commerce and traditional channels will become an indisputable fact.
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