Despite having a negative impact on the number of driving people are doing and how they use their vehicles, two recent reports have shown that the aftermarket e-commerce sector has continued to grow during the second year of the COVID pandemic, a trend that is predicted to last into the next decade.
From January to May of 2021, the automotive aftermarket industry as a whole grew by 18%, with the e-commerce sector seeing the largest benefits and reporting online sales gains of 43%, according to The NPD Group.
Another study, released by Grand View Research, has forecast the global e-commerce automotive aftermarket could reach US $143.9 billion by 2028 – A growth rate (CAGR) of 14.6% over previous predictions. These findings are supported by a second report released by P&S Intelligence, which is even more optimistic in predicting a CAGR of 23.3% between 2020 and 2030 for the global e-commerce automotive aftermarket industry. This scenario would see industry revenue increase from the $38.2 billion reported in 2019 to $292.6 billion by 2030.
Some of the growth seen this year can be credited to the approximately four million consumers who are new to the aftermarket consumers added last year, in part to economic stimulus measures implemented by the U.S. government, according to data obtained by NPD’s retail tracking. New buyers, already familiar with online shopping, have driven changes in every retail industry, while the pandemic has triggered a shift in the consumer purchasing preference across all age groups, from traditional brick-and-mortar stores to online platforms – a change in shopping behavior likely to outlast the COVID-19 pandemic.
Storefronts with no online presence have struggled, as the pandemic has put traditional supply routes under stress and exposed vulnerabilities, compounded by rising transport costs. This has led to mountains of backorders, with suppliers often unable to give any expectation of when they might be filled.
We have, however, seen some improved supply chain activity with the launch of several new platforms from technology giants like Amazon Auto and eBay Motors boosting the growth of e-commerce options in the automotive sector. This rising availably of part replacement options, coupled with greater choice, is giving internet-savvy consumers more affordable buying options.
This has not gone unnoticed by automotive OEMs, which are becoming increasingly aware of the benefits of establishing an online presence to sell directly to consumers, a move that generally wasn’t considered beneficial before 2019.
Finally, with new and used car prices still high due to the global semiconductor shortage, many consumers are putting off purchasing or leasing a vehicle, driving up the average age of vehicles on the road. This has also led to growth in DIY repair, with consumers reporting more confidence to work on their own vehicles as well as seeing unfinished automotive projects through to completion. These distinct segments of the population that are becoming increasingly DIY-focused are more likely to purchase their own parts and carry out repairs, contributing to the rise in automotive e-commerce.
Despite the difference in forecasts and CAGR, there were some general agreements.
The lighting segment is expected to be one of, if not the fastest-growing segment. This growth may be attributed to new lighting technologies, such as 360-degree lighting solutions and stricter safety standards, particularly in Europe, where many global lighting companies are based.
The business-to-customer segment will likely experience the highest CAGR because of the rise in DIY repair and maintenance. Many parts manufacturers are now selling directly to consumers and even offering an installation service at checkout.
The Asia-Pacific region is forecast to outperform the market, due to China and India's rising economic activity. Parts manufacturers in this region have proven their ability to provide affordable aftermarket products leading to greater consumer choice.
