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spare parts pakistan (1)

Written by Azhar Shoaib 3:58 pm Articles, Pakistan, Published Content

Revolutionizing the Spare Parts Industry Through Tech

While there have been several startups and e-commerce portals for the provision of auto parts, many—like Daraz and PakWheels—largely focus on car accessories. Those that have ventured into the spare parts industry leave much to be desired. PartEx and OkayKer, however, are two dynamic new ventures that are working towards growing the online spare parts market in Pakistan.
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About the Author(s)
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Mr Azhar Shoaib recently graduated from LUMS with a degree in Accounting and Finance.

Introduction

Before the third millennium, owning and driving a car was considered a luxury in developing countries. However, the economic and social transition during the past two decades changed this perception of luxury to a necessity. Unfortunately, in the developing world, car owners are still facing issues dating to the preindustrial revolution.

Car maintenance has always been a nuisance due to the lack of technical knowledge of the users, information asymmetry and exploitation in the market, and the supply chain gaps in the value chain of this industry. This long tail of value chain partners from raw material providers, importers, and manufacturers to auto shops and end consumers has made procuring automobile spare parts a burdensome and tedious activity.

PakWheels

Different startups are working in this fragmented space for the betterment of customers’ journeys and product availability through value addition in services and access to the market. The first name that one remembers is PakWheels, the pioneering startup in this industry. They focus on providing a trading platform for automobiles, lying under the peer-to-peer (P2P) dealing of used cars; their efforts have made the knowledge accessible, the information previously controlled and shared by used car dealers.

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Industrial intelligentsia used this platform mainly as an advertising agency for getting access to merchants and dealers to further improve its product reach. However, the lack of transparency mechanisms in transactions, quality-assured products, and a secured payment gateway has never been assured for the end consumers till now.

Daraz

When Daraz became the most searched marketplace in most of the consumer goods segments of Pakistan, PakWheels followed the line and focused on the provision of certain accessories for a small customer niche in the auto-parts segment. Daraz being a leading marketplace for B2C has an automotive parts segment with automobile oil and accessories having the most sales in it.

Original Equipment Manufacturers (OEMs) like Suzuki have also placed their genuine products with a warranty on Daraz. However, Daraz auto store has not been able to properly address the actual problems that exist in the market. Since Daraz is working in different niches as well, they have let the vendors or the sellers handle the information and the availability of auto parts which is a traditional practice in this industry.

Shortcomings

OEMs in the automobile industry till now, do not have a comprehensive Go-to-Market strategy for an online presence of after-sales and services provision. Omni channel provision for upstream players has never been significantly explored by any multinational or any local company. In the same way, PakWheels’ strategy regarding auto parts is not targeted at a wider segment of the population and does not fulfill the strategic demands of the auto-shop owners for equal dividends from the online viewership.

PakWheels auto store is not a marketplace or a connecting platform for automotive spare parts players in Pakistan but an online shop for rising vendors in need of market access through the PakWheels platform for expanding the customer base of their not-so-demanded products, specifically in the accessories segment.

Daraz and PakWheels have the leading shares of online traffic searching for auto parts. However, they mostly enlist car accessories leaving many of the car variants and their categories uncovered. Different startups have worked in this industry such as PakMoto, CosmoCarParts, AutoHub, AutoDeals, and PakAutoParts, but none of them have realistically solved the consumers’ and retailers’ pain points in the market i.e., an efficient supply chain mechanism for online provision of automotive spare parts in Pakistan through a trusted nationwide platform.

Several of them have ceased to work in the sector due to the rigid attitude of the key industry players hesitant to embrace change for the greater good of all the stakeholders. The whole industry has lower acceptability of change albeit even with the highest literacy rate of its customers. Support from regulators and key industry players is vital to bringing change in the customers’ journey through positive competition in the startup culture of this industry.

Autojin and Sehgal motors are also working in this industry. However, they are no different in the current market landscape of the brick-and-mortar auto shops working with the traditional forces of supply chain partners and its exploitative wholesale structure, passing no tangible benefits to the end consumers.

Promising Startups

PartEx Technologies, conceptualized as a parts-exclusive e-commerce marketplace, is a relatively new startup that commenced its operations in the mid of 2022. It is focused exclusively on bringing efficiencies in the supply chain of automotive spare parts in Pakistan. They have an all-inclusive marketing tagline “For All the Parts that matters” and an online platform for vendors, manufacturers, retailers, wholesalers, and end consumers with a wider approach to bringing change in this industry by making the supply chain efficient using technology and best international e-commerce practices.

As the co-founders have had tremendous experience in the industry beforehand, they came up with the idea to create useful technological linkages to connect current players of this complex industrial network through web stores and mobile applications designed exclusively for small and medium enterprises that can be further scaled up to a national level for all the players in the value chain.

For end-consumers, their webstore provides useful product information and its utilities besides competitive prices and just-in-time delivery with a trusted refund and return policy. Their mission is to bring information symmetry across the board, and it seems like they are into the game with a long-term vision.

Another startup worth mentioning in this space is OkayKer, which is keenly focused on the services sector of this industry. Through their app, you can order any car service and parts in Karachi only, and their mechanics will change it at your doorstep. They will source the required part as required for your car. Their model though different from PartEx has a combined focus on the mechanics and the personnel of this industry.

The only difference is in their visions, with PartEx being highly centered around a wider market segment and a strategic focus on creating the most trusted and reliable online marketplace. It is now dependent on the supportive policies of the regulators and the cooperative role of upstream players to entertain these creative spirits of the automobile industry and further cement entrepreneurial growth in Pakistan. With growing customer needs and their rapidly changing tastes demanding better services through unified voices, change is indispensable.


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The views and opinions expressed in this article/paper are the author’s own and do not necessarily reflect the editorial position of Paradigm Shift.

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