Globally, technological advancements and digitization are bringing drastic revolutions in the entire automotive and aftermarket industries. On one hand, the digital revolution has led a change in consumer behaviour. The customers of today look for quality digital experiences that make their lives simpler and more efficient. Digital channels have gained increasing influence in customers’ research and purchase processes in developed as well as in emerging markets. Customers turn to online communities and reviews, among other digital platforms, as a way to improve their purchasing decisions.
On the other hand, the use of smartphones has enabled new mobility services such as e-hailing while a substantial share of car-related information search and purchases has moved online. To cope with these changes, the aftermarket players have renovated their technologies, services, and product offerings in a subsequent manner. Multiple platforms for online parts sales exist already. Suppliers, OEMs, distributors, and workshop chains continue to increase their online participation and launch new platforms.
As a result, the digitization of component delivery sales and services, along with online portals distributing aftermarket components in synchrony with global automotive suppliers, has drawn significant investment from the key participants. Additionally, increasing online sales of automotive components is estimated to further boost market growth. According to a report made by McKinsey & Company, the e-commerce share of parts sales will be expected to increase from 20 to 30% by 2035.
For the United States, digital activity influenced just over $148 billion in U.S. auto parts and accessory sales in 2019, according to Hedges & Co. projects. Those “digitally influenced” sales include goods bought online and those researched or discovered online before being purchased in a store. Online sales of new auto parts and accessories is estimated to grow about 16% and reach $12.3 billion in 2019, and it will grow at an average annual rate of 25% through 2022. By 2022, U.S. online sales of auto parts and accessories will reach $19 billion, and digitally influenced sales will grow to $162.4 billion, Hedges & Co. projects says.
As for New Zealand, data regarding the online auto parts sales industry is scarcely reported. However, an increase in the digital market can still be perceived from two facts:
1) New Zealand’s offline motor vehicle parts retailing industry has steadily grown over the past five years;
2) New Zealand’s counterpart, Australia’s auto parts industry, has perceived a steady growth in the digital market according to a report from Ibisworld.
Given the fact that strong consumer uptake of online shopping has benefited online automotive parts retailers, particularly as consumers generally view industry operations as having better value for money than bricks-and-mortar outlets, the digital growth of New Zealand’s online automotive industry is promising.