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Featured, Tyre Industry

Why’s new business model has potential to change tyre retailing forever?

Posted: March 12, 2016 at 11:50 am   /   by   /   comments (1)

Last week we were invited to an exclusive preview of the new business model which is set to unveil this month. India’s premier tyre online sales company is pivoting its business model and is set to take new avatar of a hyper local market place for tyres. Have we not heard it before? Is it not the same thing which is being done by most of the e-commerce players in other product domains? These were the questions which were posed to management during a long hour interaction. They explained that major difference in their model lies in the unique technological platform which they have developed and the way the transactions will be executed. emphasized that the heart of their platform is an app for the tyre dealer called Tyre Retail Caddy which will not only enable tyre dealers sell their products online, but also help them manage their store in a seamless manner.



Under the new model, customers will now be able to discover tyre brands and their prices in their local area for their vehicle. For the consumer coming on their web site the methodology remains the same, however search results will now can be seen on the map with tyre dealer’s locations and their prices marked therein. A consumer can then make his choice by clicking on the market on the map, book his tyre(s) and generate a delivery order. As soon as the delivery order is generated a notification is sent to the selected tyre dealer on his Tyre Retail Caddy app informing him of the details of order which has been placed on him. Tyre dealer and the consumer can then coordinate the visit for installation. On reaching the store, consumer can get his tyres installed and pay directly at the store. Plain and simple.

As per the company the current existing business models for online tyre retailing are not sustainable on long term basis as they involve shipping of tyres across the country. It’s time consuming and logistically expensive. It takes on an average 7 days for tyres to be delivered and then logistics costs amount to about 8-12% of the price of the tyre. They also opined that in future current online tyre sellers will not be able to provide value offerings to the consumers once they get out of the subsidization game. It was also explained that another issue is that unlike other products, tyres have to be serviced and installed. The consumer after he receives the tyres at his place, in any case, has to take his car and tyres to a tyre store nearby to get the wheel balanced, aligned and tyres installed. He has to also end up paying extra for these services which in turn further pushes up the costs for the consumer. However under the new proposed model there is no waiting time, no such extra charges for logistics, no extra payments for tyre servicing and installation thus making this model sustainable on long term basis.

We asked the team, will it not be difficult for tyre dealers to use the app since many of them are not very comfortable with the technology? It was explained that anyone who can use WhatsApp or Facebook can easily use this app. A tyre dealer has to just download TRC (Tyre Retail Caddy) app from google play store, register himself and start selling. The app comes pre-loaded with all SKU’s of all possible brands operating in India. To make it all the more easier it also comes pre- loaded with the suggested market prices. Tyre dealer has to just swipe and switch on the SKU’s which he wants to sell. He can then choose to use the same prices as suggested by the company or make the change and type his own price. As soon as he clicks submit he goes live on

As per, the platform they have developed will vastly increase the profits of the tyre dealer and solve his most pressing problems. When asked how will that be achieved? It was explained that currently in car tyre space there are more than 3500 SKU’s in the Indian market. It’s almost impossible for any tyre dealer to keep stock of each and every tyre available in the market. An average tyre dealer can stock not more than 150 SKU’s. This limits the product discovery for the consumer and leads to customer returns. However in the new model being proposed a tyre dealer can sell from ” Virtual Inventory “implying selling even those tyres which are not in his stock . They further explained that a tyre dealer for example may be just stocking 30 SKU’s of Goodyear tyres in his store but the company has more than 200 in its range. However on a tyre dealer can list all tyre options which the company has to offer. In case he receives an order for a tyre which he is not stocking he can always dial the company and ask for the delivery of those tyres. This as per is a game changer for the business as suddenly all dealers of the company can list and sell the entire range. This also increases the return on capital for the tyre dealer. Further the smaller dealers are averse to stock expensive tyres for luxury cars as they may be stuck with the unsold inventory. However, now they can list these tyres too and can order with the tyre company whenever they receive the order notification. These kind of tyres offer much better margins thus enabling a tyre dealer to make more profits. also claimed that new platform will be a great enabler for tyre brands too- both established and those new to the Indian market. They explained that even the most established brands have a high percentage of tyre SKU’s which get slotted as slow movers. Many a times best of the products get labelled as slow movers and thus never reach the intended market. The products fail even before reaching the consumers. Once any SKU gets slotted as a slow mover tyre dealers are reluctant to stock them on their store shelves and as the result the consumer does not get to discover those tyres. Tyre companies can now encourage their dealers to list these tyres on even when they are not ready to store the same. When it comes to new tyre brands they face even bigger problems. It’s an uphill task for them to build the retail channel as tyre dealers want to stock more of established brands rather than the new ones. These brands can now quickly expand their retail network and also be discovered by the consumers using this platform. They can also chose to appoint “virtual dealers “. This is the new concept introduced by Virtual dealers are those which are not ready to stock these new brands but agree to list these tyres and order the tyres on the tyre brand distributor when the order is received by them from

The company explains that all of the above features makes the new platform a great enabler for every player in the tyre retail ecosystem. The company explained that they will be first going live with National Capital Region and expand it to other markets over next couple of months.


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