Q&A with MD PitStopArabia.com
Tires & Parts magazine caught up with PitStopArabia.com's MD, Aadil Ishfaq for a Q&A session. This interview was published in the September 2018 edition of the trade journal. Full interview is available at www.tiresandparts.net
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 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 centre in the Middle East. This was excellent experience for creating something new from the ground up. In 1998 Microsoft set up their regional office 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 Gulf and Mediterranean region. This was a start of something extraordinary for me. Working for a large corporation in a set up mode was literally working for a start up 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 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 takeways 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 focussed 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 a 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 form 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 a 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 a 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 complete range of Car and SUV tyres. We have intentionally stayed away from commercial and truck tyres 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 currently. 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 tyres from a Toyota Yaris to premium tyres for a Lamborghini to All terrain tyres for an off roader. Since we have a whole range of complementing installers who can cater to all tyres of 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 tyres 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.
Vision of our business is to make the tyre 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 tyre 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 internet as a medium of purchase. This is changing fast though. Additionally, there is very little experiential component in the purchase of a tyre. Most people purchase tyres which are already on their cars, so you know the experience already and predict how it will behave based on your ownership of that tyre. Where a customer is unsure, we have a trained team of tyre 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 tyres. 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 wasn’t a help either. And I don’t blame anyone for this. Can you imagine if you are a veteran of the tyre industry and a complete no-entity shows up with an unproven concept asking you to join in! This made for a quite a few interesting meetings. Fortunately for us, we found some partners who believed in us and provided us 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 sale of tires online?
Trust in internet as a medium to acquire product is growing but still far behind other markets. Online tyre 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 at the cusp of an Ecommerce 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 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 tyres 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 issues 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 arounds what Date of manufacture represents. We work very hard to educate the customers on this. As long as the tyres you buy are from a legitimate source, buying a tyre which was manufactured a year or two ago, is not a problem. Michelin says that a tyre's aging process doesn't start from its date of its fabrication (DOT). It starts once the tyre is inflated and installed on the car. This is because tyres undergo the most stress when they're being used, not while they're sitting in storage. Study conducted in Saudi Arabia showed no difference in performance between newly manufactured tyres and ones that have been lying unused for three years. If you put 30-40,000 kms on your car every year, a 2 year old DOT tyre would provide you full service before the usage limit of 5 year stipulated by ESMA. Typically, you can get tyres with an older DOT on a better price in the UAE. So if you drive enough, get the best deal you can by choosing an older DOT. As as long as you are able to consume the tyre within the 5 years from the date of production, you are okay to buy a tyre 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 to tyres available anywhere in the UAE, 30+ Brands and 2,200+ 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 a 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 tyre is key, selecting who you use to install these tyres is even more important.
Fourth, peace of mind as we sell only New & Genuine tyres 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 tyres are the same. I believe the most important thing is to understand your application and then choose tyres accordingly. If you don’t know what to look for just come online and ask any of our tyre consultants. The most important thing is to ensure that all tyre 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 tyres specification in the owner’s manual. Make sure the tyres specifications are exactly the same, specially 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 tyres.
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 business. Also the demand is also moving away from Premium brands and acceptability lesser known and Chinese products is fast increasing, this is especially true for popular sizes and is true across the rim sizes. We should be prepared to 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% CGAR 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.
