The shift in the consumer purchasing preference, from traditional brick-and-mortar stores to online platforms, is expected to drive the global eCommerce in automotive aftermarket at a high CAGR (compound annual growth rate), of 23.3%, between 2020 and 2030. At this rate, the industry revenue is projected to increase from $38.2 billion in 2019 to $292.6 billion in 2030, according to P&S Intelligence. Most people don’t really understand the specifications of the auto parts they are purchasing and their compatibility with their vehicle.
The reason this factor is important in the eCommerce in automotive aftermarket growth is that online platforms allow customers to see all product specifications and select the best one. Additionally, they can simply pay online and have the spare parts delivered at their doorstep. This way, they save themselves the trouble of being constantly hounded by the sales pitch of the employees working at the store, who can sometimes make people buy costly parts, which do not offer the desired value.
As the automotive component supply chain has been negatively affected by the COVID-pandemic, which has also persuaded people to refrain from purchasing non-essential goods, the eCommerce in automotive aftermarket is currently witnessing recession. Apart from the supply of vehicle parts, even their manufacturing has stopped, as numerous countries have locked themselves down, in order to stop the pandemic in its tracks. However, as soon as the situation improves, the online sales of auto parts will pick up.
The engine parts category, based on component, would hold the largest share in the eCommerce in automotive aftermarket in the coming years. This is attributed to the increase in the number of vehicles on the roads as well as a rise in their average age, which are together driving the demand for engine parts, which are crucial for the functioning of automobiles.
In the coming years, higher CAGR in the eCommerce in automotive aftermarket, of 25.8%, is expected to be observed by the direct-to-consumer bifurcation, under segmentation by channel. This would be on account of the changing consumer preference to shop online, and rise in the number of people who like to perform vehicle repairs and upgrades themselves.
The business-to-business (B2B) bifurcation, on the basis of consumer, dominated the eCommerce in automotive aftermarket during 2014–2019, as online retailers offer sizeable discounts on bulk purchases, easy payment options, and cost-effective doorstep delivery. All these advantages attract a large number of buyers, which mutually benefits the eCommerce seller as well as the auto part manufacturer.
Asia-Pacific (APAC), which is currently the highest revenue contributor to the eCommerce in automotive aftermarket, will continue dominating the industry in the near future. The largest vehicle manufacturer on earth, APAC has an annual output of more than 50 million automobiles, which is why it is a lucrative market for spare parts. Owing to the rapid urbanization rate, vehicle sales are picking up in the region. Moreover, the technologically inclined population has not only started repairing and upgrading automobiles itself, but it is also shifting to online shopping.