Who needs the most diversified tire channels?

The tire industry is a relatively traditional industry, and the distribution system is also very traditional. The three-level distribution system of manufacturers, distributors, and retailers has lasted for many years. However, with the deepening of the Internet, the quiet land of the tire industry is no longer peaceful.

With the entry of huge amounts of capital, the tire industry has seen a variety of models such as e-commerce and new retail. These models launched a money-burning war in the early stage, attempting to change the behavior habits of users, which made traditional tire people very worried. For a time, rumors that e-commerce would replace tire stores were everywhere.

However, in fact, looking back, whether it is e-commerce or new retail, they did not think about whether the tire industry needs these new models before entering the tire industry. They just introduced this model into the tire industry because it was successful in other industries.

As a result, many people who blindly entered the tire industry went bankrupt, and the remaining ones were either industry elites or those with strong capital behind them.

01 Traditional channels have disadvantages
Of course, we cannot repeatedly belittle e-commerce and new retail channels, because if the traditional channels are ironclad, these channels cannot enter. But it is precisely because the traditional distribution channels represented by dealers have failed in recent years that many dealers with no strength have withdrawn from the industry. This has created a vacuum in the channels, and it is becoming increasingly difficult for existing dealers to operate.

First, there are too many levels of channels, which is not conducive to improving efficiency, and bloated channels are not conducive to forming product price competitive advantages

Second, it is difficult for tire manufacturers to effectively control tire sales channels. Third, the sales policies of tire manufacturers cannot be effectively implemented. Fourth, one-way and multi-level circulation prevents accurate and timely feedback of information, which not only misses business opportunities, but also causes waste of personnel and time resources.

Therefore, more and more tire companies are beginning to abandon dealers and come up with a direct sales model. Tire manufacturers are directly concerned with retail stores. Because retail stores are closer to users, and the tire industry is also changing from "channels are king" to "terminals are king". Now major tire manufacturers are trying to shorten channels and minimize their dependence on dealers. There are more and more chain tire stores of various tire manufacturers.

Not only tires, tire companies have also reached out to areas such as auto service and minor repairs and beauty, and have changed from product providers to service providers. Such a transformation is more suitable for the development of the automotive aftermarket.

02 Is diversification a breakthrough?
It is precisely because the original channel structure is too bloated, the complex system is inefficient and slow to respond.

In the increasingly fierce competition now, tire companies urgently need to change the existing channel model. From the perspective of channel structure, flattening is definitely a major trend. The status of small middlemen will definitely be weakened and the number will decrease. In the future, middlemen who can survive must have a certain scale and reflect their value in warehousing, inventory, logistics and distribution.

Second, diversification. Traditional distribution channels, self-operated channels and online channels will coexist in various ways. Tire manufacturers should make up for channel shortcomings as soon as possible to avoid being left behind by competitors.

Third, channel sinking. With the popularization of automobiles in urban and rural markets, the demand for tires in urban and rural markets has further increased. Tire manufacturers need to expand retail service outlets to the township-level market.

The current e-commerce model is actually a manifestation of integrating wholesale and retail channels. Once this model is well constructed, it is very solid. There are no dealers in the middle. It integrates online and offline operations, online customer gathering, online sales, offline services, and offline trading. This is a good model. There is such a model abroad, and it is still doing well.

For example, 4S stores in the automotive industry are not only for selling cars, but also for being the solid pillars of brands. For those international brands, their historical status is difficult to be shaken, and the services of 4S stores represent the brand, which is also the embodiment of linking service with brand.

But now tire stores sell tires for selling tires, and services for service, which have nothing to do with brands. They cannot let manufacturers or store owners enjoy the dividends brought by brands, which is why China's tire services are worthless. As a very important part of the automotive aftermarket, the tire business is very important for distribution and retail channels, and how tires are transported from manufacturers to users' cars. One standard for inspection services is more, faster, better, and cheaper.

Consumers care most about speed first, which requires tire companies to have enough distribution outlets and a fast-responding logistics system; secondly, good and cheaper, which is essentially the cost-effectiveness of the product.

Products with high cost-effectiveness are the long-term footholds to attract customers; then the variety should be complete, and it is difficult for a single brand of tires to scale up, which is also the reason why manufacturers cannot dominate the market, but middlemen are possible; finally, we have to add a standard, the model should match the tire performance, brand, specification, and size. Only by achieving these can we dominate the automotive aftermarket.