Impact of E-Commerce in European MRO industry

Posted On Aug, 30, 2017

The advent of E-commerce platforms has brought significant changes in the entire MRO distribution network in the region. In comparison to the traditional procurement techniques using of E-commerce sourcing is projected to provide a cost saving of around 11 to 19% of the overall cost of procurement.

As MRO sourcing differs from company to company and is depended on factors such as requirements of the number of stock keeping units, business procurement requirements, categories of products and buying frequencies. The traditional procurement processes have various disadvantages and challenges.

But, e-commerce platforms are not just restricted to selling and buying. It also involves support activities for buying and selling such as the automated data collection and identification technologies that help in easy identification of equipment, storing, retrieving, order tracking and many more.

The internet and MRO or aftermarket purchasing are a perfect combination in the current distribution industry scenario in the region. Effective coordination/communication within the logistics network is a vitalprospect of industry supply chain management. The E-commerce offers a relatively inexpensive network for communication with secured capabilities of trade.

Some of the advantages of using e-commerce platforms for MRO distribution includes:

- Low product prices
- Shorter process cycle
- Enhanced access to information
- Clarity in transaction processes
- Improve delivery time to the end-markets
- Better compliance with approved distributors
- Consolidate suppliers while increasing competitive choices
- Allow buyers to work on value-added and strategic tasks

Some of the other trends in the E-commerce MRO distribution network include:

- The substantial development of the e-commerce companies backed by various industrial facilities such as fulfillment centers and warehouse
- Most of the industrial MRO supplier have started launching their own e-commerce sites. Around 67% of the distributors globally have invested in the development of e-commerce platforms

Amazonsupply, Fastenal, And Grainger are the leading e-commerce distributors in the market in the present scenario. Amazonsupply was started in 2012 with an initial catalog of 50,000 items to 2.2 million products in the present scenario. Its products range from simple power tools to industrial cleaning supplies.

Fastenal which started off in 1969, as a local fastener shop and in the present scenario an international industrial distribution business with annual sales of around USD 3.7 billion. The company has 2,700 stores in 20 countries

Grainger operates physical stores along with online sales. It was established in 1927 and it launched Grainger.com in 1995. It has a massive inventory of around 1.2 million items for online sales.

However, despite the rapid growth of the e-commerce industry, around USD 1 trillion B2B e-commerce market globally remains untapped. This clarifies the fact that there are tremendous opportunities in this industry in the future. This clearly indicated the growth of the MRO distribution market in the e-commerce platform as it still is in its very nascent stage.

  In-depth report on Europe maintenance, repair, & overhaul (MRO) distribution market by Grand View Research:

http://www.grandviewresearch.com/industry-analysis/europe-maintenance-repair-overhaul-mro-distribution-market

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