Can you begin by telling us a little about yourself?
My professional journey hasn’t been a purely conventional one. I started my journey as an Electrical Engineer. I moved to technology sales soon after and realized that I needed to have a better understanding of how businesses work so went to the UK to get a business Degree. I arrived in Dubai in 1996 to work for MashreqBank. I helped the Bank setup their alternate distribution strategy i.e. phone and internet banking. The result was, at the time, the largest call center in the Middle East. This was an excellent experience for creating something new from the ground up. In 1998 Microsoft set up their regional office in Dubai. I was fascinated but Microsoft’s vision of helping others realize their full potential. I pursued them and was offered an Account Manager role covering the Gulf and Mediterranean region. This was a start of something extraordinary for me. Working for a large corporation in a setup mode was literally working for a startup with infinite resources. Over the next several years I served in various roles covering Sale, Channel and Distribution Management, program management and cross-border transactions. When Cisco Systems rebooted their operations locally in 1996, I was offered the Regional Manager role for Enterprise and Public Sector. Over the next few years, I served in multiple capacities with my last role being the Operations Director for the Middle East and Africa. In my enthusiasm to find something exciting to do, I set up PitStopArabia.com in April 2015.
You transitioned from working in banking and in Microsoft to helming a platform for selling tires. What key takeaways from your previous stints help you in your current role?
I have been very fortunate to have been given the opportunity to work for very credible employers. Most importantly, I had the good fortune of being mentored by some excellent managers who guided me well. Right from my move to sales in my first job to the pursuit of a business degree to complement my understanding of various functions of a business to the various hops I took across industries and disciplines. All my roles had one theme in common, I was almost always focused on creating new opportunities for business as well as creating new channels for delivering a service or a product. This gave me an excellent grounding in understanding how products and services flow from the factory floors all the way to the end consumer. Whether its Microsoft packaged software or a Cisco Router, the channels these products use to get to the consumer aren’t too different from how tires get from a factory floor to the wheels of your car. Additionally, My understanding of various technologies and how they come together to create a platform certainly helped.
What is your typical day at work like?
Contrary to popular belief, running an Online business is none too different from running a conventional business. The key difference is that your business front is on the world wide web. All other elements of a brick and mortar business apply. I have been blessed with an excellent team focussed on executing on delivering our promise to our customers. Being a small team, we have a very busy Operations, Customer Service, and Logistics teams. I am primarily focused on driving customer acquisition, driving traffic to our platform, and customer conversion strategies. Plus I’m also driving our relationships with our key partners to ensure products are sourced timely and at correct price points. My key role is to collate all our learnings and ensure that these are built into our operations. We are in the processes of recalibrating our customer experience and that has taken most of my focus the last few months.
In what way is PitStopArabia.com different from similar sites? Is there any way in which your business model is different?
Our Model is simple. We have the widest choice of product as well as installer options available. We do not compete with any of installer partners. They remain our carefully chosen partners for their expertise and service excellence. To them we deliver footfall and they get paid for the services they deliver to us. So we are really complementing their sales efforts to drive more business to their locations. They earn a customer as well an opportunity to upsell complementary services and products. So we are quite unique from that standpoint. First and foremost, we are the only pure player in the market which is truly brand agnostic and location independent. Most of the companies that are perceived to be our competition are really websites by existing retail outlets or distributors built to drive traffic to their own retail shops. First, they are bogged down by the heavy overheads of physical outlets so the benefits of web-based operations are not available to them. Secondly, they almost always represent a brand or two which they are trying to push so they never have the availability of the product range we have available online. Thirdly, they are represented by a few locations whereby we provide the options of over 100 locations across the length and breadth of the UAE. Fourth being retailers or distributors themselves, they almost always find themselves in competition or conflict with their own channels.
The UAE is a market in which tires from many different brands are available at different price points. What kind of tires do customers buy the most from PitStopArabia.com?
We sell a complete range of Car and SUV tires. We have intentionally stayed away from commercial and truck tires as we believe that market is not yet ready for online retail. We have 35+ brands currently with over 2500+ sizes and patterns of tires available. Initially, we were really catering to the customers seeking convenience. Since the beginning of this year, we increasingly have price-conscious customers purchasing online. So really, we now sell to the entire range to customers. Our customer in a day range from budget tires from a Toyota Yaris to premium tires for a Lamborghini to All terrain tires for an off-roader. We have a whole range of complementing installers who can cater to all tires for all vehicles, we are increasingly seeing a broader range of customers turning into our patrons.
Are customers highly price conscious in this market? And how do you change their mindset?
Today, there is no publicly available price list for tires available in the country as such. Some retailers do a lot of forced selling and opportunistic pricing. This leaves the customers confused and unsure whether the price they are paying is right for the tires they are acquiring.
The vision of our business is to make the tire buying experience Easy and Positive for our customers. Our business model is based on upfront, all-inclusive and transparent pricing. There is no opportunism here. We clearly specify the Make, pattern, Date of manufacture and other critical specifications of the tire on our platform. What you see on the portal is exactly what you get at the installer. I think the customers today are not price conscious per se but more concerned with paying the right price for the right product.
How challenging is it to market a commodity like tires in this market? Generally, don’t customers here prefer to examine the tires physically before they proceed with the purchase?
This remains a key challenge but mostly because of lack of trust on the internet as a medium of purchase. This is changing fast though. Additionally, there are very few experiential components in the purchase of tires. Most people purchase tires which are already on their cars, so you know the experience already and can predict how it will behave based on your ownership of that tire. Where a customer is unsure, we have a trained team of tire consultants available online to advise them. There is always an added level of comfort when a customer sees a known and reputable installer on our network which will help them install these tires. This gives them an added level of confidence.
What are the key challenges you faced in setting up such an online portal in this market?
The most difficult part was to convince distributors and installers to subscribe to this idea and join hands with us. No one else had attempted this model prior to us. The fact that I was an industry outsider didn’t help either. And I don’t blame anyone for this. Can you imagine if you are a veteran of the tire industry and a complete non-entity shows up with an unproven concept asking you to join in! This made for quite a few interesting meetings. Fortunately for us, we found some partners who believed in us and provided us with full support. Additionally, the regulations around licensing for our hybrid online to offline model wasn’t clear at the time. That took some effort executing. The technology piece was the easiest. A big challenge was that there wasn’t a credible precedent that we could follow or improve upon locally. So we reviewed best practices elsewhere in the world and localized them.
Are there any distinctive characteristics that make this market different from highly developed markets like Europe and North America when it comes to the sale of tires online?
Trust in the internet as a medium to acquire product is growing but still far behind other markets. Online tire sales are around 10% of the market in the US which locally we are at less than 1%. So lots of room to grow. All indications are positive. We believe GCC is on the cusp of an E-commerce explosion with Market size forecasted to be $20B by 2020. E-commerce penetration in the ME estimated at a mere 1-2% percent of retail sales vs 15% in developed markets. Net-a-Porter reports that average order value in the Middle East is 50 percent higher than the rest of the world. Millennials as a part of the population are disproportionately important for GCC representing almost 50% of the population and spend more than their global peers. Additionally, transportation and logistics are very competitively priced locally. So we are looking at solid growth over the next few years
Standards with regard to tire quality and manufacturing dates have become increasingly stringent in the UAE. How is your company dealing with this challenge?
We only sell tires that comply with GSO standards and are supplied and supported by the local distributors. We offer a minimum of 1-year manufacturers warranty against defect on all brands we sell, meaning that you have direct recourse with the manufacturer in case you have an issue. In case of any claims, our customers contact us and we help them connect with the manufacturer to fulfil their warranty claims.
The Date of manufacture is a big point of contention with the customer. There are lots of misperceptions around what the date of manufacture represents. We work very hard to educate the customers on this. As long as the tires you buy are from a legitimate source, buying a tire which was manufactured a year or two ago, is not a problem. Michelin says that a tire’s aging process doesn’t start from the date of its fabrication (DOT). It starts once the tire is inflated and installed on the car. This is because tires undergo the most stress when they’re being used, not while they’re sitting in storage. The study conducted in Saudi Arabia showed no difference in performance between newly manufactured tires and ones that have been lying unused for three years. If you put 30-40,000 km on your car every year, a 2-year-old DOT tire would provide you full service before the usage limit of 5 years stipulated by ESMA. Typically, you can get tires with an older DOT at a better price in the UAE. So if you drive enough, get the best deal you can by choosing an older DOT. As long as you are able to consume the tire within the 5 years from the date of production, you are okay to buy a tire with any date of manufacture.
What are your criteria for selecting your partners when it comes to tire installation? Do you plan to diversify into products other than tires in the near future?
Currently, we tier our partners as Premium or Independent. All our installers go through a rigorous review process where their equipment, training, Customer service focus, and facilities are reviewed. These are the bases we use to grade them. Additionally, we also list all the complementary services they offer on our portal as well. Each customer who uses them is asked to review them on four aspects; Overall Rating, Courtesy, Cleanliness, and Quality Of Service. These scores are displayed with each installer on our website.
We are toying with the idea of adding a few more services and are in the process of gathering some data to assess viability. You will hear about these soon.
Other than the convenience aspect, what are the other benefits of buying tires online?
Firstly, we believed we offer the Best Value by offering top brands at most competitive prices. We review and change our prices daily to remain competitive. Our use of the internet to market our products help us keep our costs down. Secondly, we offer the widest range of tires available anywhere in the UAE, 35+ Brands and 2,500+ Patterns and Sizes are available today and we keep adding more brands and sizes each month. Thirdly, our reach and focus on service. We have a network of over 100 installer locations with trained technicians and the right equipment. All our installers have been through our rigorous audit process and are known for their top-notch facilities and their customer service orientation. While choosing a quality tire is key, selecting who you use to install these tires is even more important. Fourth, peace of mind as we sell only New & Genuine tires carrying manufacturer’s warranty. Our aim is to make sure that our customers are able to drive with confidence, knowing their vehicle will corner precisely, stop safely and cope with varying driving conditions.
The climate and terrain in the Middle East can vary from one extreme to the other. What would you advise customers here to look for when choosing tires for their vehicle? What are the precautions they need to take?
Not all tires are the same. I believe the most important thing is to understand your application and then choose tires accordingly. If you don’t know what to look for just come online and ask any of our tire consultants. The most important thing is to ensure that all the tires you are purchasing are from a legitimate source and carry the requisite markings and the RFID tags that are mandated by the UAE government.
All car manufacturers specify the correct tires specification in the owner’s manual. Make sure the tires specifications are exactly the same, especially the Load index and the Speed ratings are as specified. Secondly, make sure that the Temperature rating is either A or B. both are acceptable for the UAE. You must understand your application and driving style. Off-roading or aggressive on-road driving require different tires.
What do you think is the outlook for the tire industry in the Middle East in the short term and the long term?
I see some flatness in demand in the immediate term as the market rationalizes and adjusts to reduced demand. We expect the market to bounce back next year as economic uncertainty abates and retailers adjust to the new realities. I think the focus must be on rationalizing costs and lowering the expenses of the business. The demand seems to be moving away from Premium brands and acceptability of lesser known and Chinese products is quickly increasing, this is especially true for popular sizes and is true across the rim sizes. We should be prepared to see reduced values per transaction. I am a true believer in UAE’s leadership and their capacity to remain relevant. In the long run, I believe demand will return and we can expect the industry to grow at 4-5% CAGR till 2025.
To conclude on a light note, what do you like most about working for PitStopArabia.com?
I love exploring unchartered territory. This is what PitStopArabia.com represents. The constant opportunity to be innovative and on the cutting edge of our industry. I am blessed with a fantastic team. We love taking our learnings and operationalizing them for the benefit of our customers.am. We love taking our learnings and operationalizing them for the benefit of our customers.
Manju Mathew, an MBA in marketing, completed publisher training courses from the Oxford Brookes University and New York University. She started with marketing and PR roles before moving on to her current position as a full time writer. Currently living in Dubai, her life as an expat has sharpened her observation skills and flair for writing. She enjoys writing about luxury cars like Ferrari, Lamborghini, etc even if she can only dream of owning them.
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