A bried summary of Frost & Sullivan's new report on the key trends in online automotive parts & accessories distribution and purchase, revenue growth areas, and key competitor profiles.

1. Opportunity Analysis of E-Retailing for Automotive Parts
and Service in the North American Market
Digital Purchases Likely to Account for Over 10 Percent of Total Sales by 2020
Brief Summary
NBE6-18
July 2013

2. 2NBE6-18
Contents
Section Slide No.
Executive Summary
Research Scope, Background, Objectives and Methodology
Definitions / Segmentation
E-Retailing Market Overview (Automotive and non-Automotive)
• Global Online Retail Sales Outlook
• North American Online Retail Outlook
• Online Product Penetration Rates – Automotive and Other Categories
• Key Retailers Bricks vs. Clicks Sales
• Key Legislative Developments in E-Retailing—U.S.
• Macro to Micro Implications in Bricks and Clicks Retailing in Automotive
Impact of Mega Trends on Automotive Parts E-Retailing
• Key Mega Trends Impacting Automotive Aftermarket
• Impact of Mega Trends: Urbanization
• Impact of Mega Trends: Connectivity
• Impact of Mega Trends: Social Trends
• Global Social Commerce Users Forecast

3. 3NBE6-18
Contents (Continued)
Section Slide No.
Automotive Parts E-Retailing Demand Factors & Challenges
• Key Influencers of Parts-Related Online Research and Sales
• Key Reasons for Not Buying Parts Online
• Key Market Challenges Facing Automotive E-Retailers
Automotive Parts and Service E-Retailing Market Overview
• The Automotive E-Retailing Gap
• Growth Influencers in Auto Parts E-Retailing
• Digitization Expansion Trend in Automotive Parts and Service
• Automotive Parts E-Retailing Evolution
• Key Automotive E-Retail Participants in Operation
• Automotive E-Retailing Value Chain
• Automotive E-Retailing Value Chain Analysis
• Recent Strategic Developments in Automotive Parts E-Retailing
Automotive E-Retailing Revenue Analysis & Forecast
• Automotive Parts E-Retailing—Total Revenue Scenario Analysis
• Revenue Forecast Scenario Assumptions to 2020

4. 4NBE6-18
Contents (Continued)
Section Slide No.
• Online Parts Revenue vs. Total Aftermarket Parts Revenue
• Percentage Revenue Forecast by Competitor Type
• Automotive Parts Gross Merchandise Volume By Business Model Type
• Automotive E-Retailing Revenue by Product Category
Automotive Parts E-Retailing Business Models
• Automotive E-Retailing Business Models: Direct and Marketplace
• Why The Marketplace Model Works
• Case Study: Amazon.com Marketplace Model
• Case Study: eBay Motors Marketplace Model
• Case Study: Ahwooga.com Marketplace Model
• Business Model Analysis by Market Participant
From Bricks to Clicks: Digital Convergence Strategies in Automotive Parts Retailing
• Future of Automotive Parts Sales: Bi-Channel to Omni-Channel

5. 5NBE6-18
Contents (Continued)
Section Slide No.
• Convergence Strategy: Social Commerce in Automotive Parts
• Case Study: AutoZone Social Commerce Strategy
• Case Study: Advance Auto Parts Social Commerce Strategy
• Convergence Strategy: Mobile Commerce in Automotive Parts
• Case Study: eBay Motors App
• Case Study: AutoZone App
• Convergence Strategy: Customized Fulfillment
• Impact of Emerging Fulfillment Models on Auto Parts Sales
• Fulfillment Comparative Analysis for Key Participants
• Convergence Strategy: Service Aggregation
• Case Study: DealerCoupons.ca’s Service Aggregation Model
• Case Study: AutoMD’s Service Aggregation Model
• Convergence Strategy: Digital Retailing
• Convergence Strategy: Telematics
• Bricks and Clicks Convergence Matrix for Parts Retailing

6. 6NBE6-18
Contents (Continued)
Section Slide No.
Automotive Parts E-Retailing Competitive Analysis by Participant Type
• Automotive E-Tailer Future Growth Outlook
• Mass E-Tailer/Aggregator Future Growth Outlook
• Traditional Distributor/Retailer Future Growth Outlook
• Mass Retailer Future Growth Outlook
• OES/Dealers Future Growth Outlook
Automotive Parts E-Retailing Competitive Analysis & Key Competitor Profiles
• Company Profile: Mass E-Tailer/Aggregator -- Amazon.com
• Company Profile: Aggregator -- eBay
• Company Profile: Automotive E-Tailer -- US Auto Parts Network Inc.
• Company Profile: Traditional Distributor/Retailer -- AutoZone
• Company Profile: Traditional Distributor/Retailer -- NAPA
• Company Profile: Traditional Distributor/Retailer -- Advance Auto Parts
• Company Profile: OES -- Ford Motor Company
Conclusions and Future Outlook
Appendix

7. 7NBE6-18
Executive Summary

8. 8NBE6-18
Executive Summary—Key Findings
Automotive parts e-retail revenues were an estimated $4.6 billion in 2012 and is expected to
cross the $16 billion mark by 2020
Source: Frost & Sullivan analysis.
Online sales account for about 4 percent of total aftermarket retail level sales. By 2020,
e-retail sales are expected to reach about 10 percent of aftermarket revenue with a CAGR
of 17 percent
Marketplaces such as eBay and Amazon accounted for about 80 percent of Gross Merchandize
Volume (GMV) in 2012. Increasing e-tailing through bricks and mortar retailers’ own websites will
lead to 5 percent increase in GMV share for the direct channel
Pure-play independent automotive e-tailers expected to lose market share, dropping from
57 percent in 2012 to 18 percent in 2020. Mass e-tailers and traditional automotive
retailers/distributors will be neck-to-neck leaders with 26 percent and 25 percent share
respectively.
Exterior parts, performance components, braking and filtration were the leading categories,
accounting for nearly 50 percent of all online sales. Tires, which is currently at about 4 percent
of overall sales, are likely to witness the strongest growth over the forecasted period
4
Convenience factors such as fulfillment time and cost to customer will supersede lower online
pricing as key value propositions for parts e-retailing5
1
2
3
Automotive Parts e-Retailing Market: Key Takeaways, North America, 2012-2020

9. 9NBE6-18
Executive Summary -- Online Product Penetration Rates
Consumer electronics, entertainment products show the highest share of online sales; penetration rates for
automotive parts is currently low but is expected to reach almost 10 percent by 2020
60
65
82
90
93
96
40
35
18
10
7
4
0% 20% 40% 60% 80% 100%
Automotive Parts E-Retailing Market : Online Product Penetration by Category, North America, 2012
Source: BB&T Capital Markets, Frost & Sullivan analysis.
36
43
75
82
85
90
64
57
25
18
15
10
0% 20% 40% 60% 80% 100%
Automotive Parts &
Accessories
Home Decor
Health & Beauty
Apparel & Fashion
Books, Music and Videos
Electronics (including
computers)
2012 2020

10. 10NBE6-18
Revenue(Billion$)
OnlineTotal Aftermarket
Executive Summary -- Online Parts vs. Total Aftermarket Parts Revenue
Parts e-retailing will account for about 10 percent of aftermarket revenue by 2020
$131.5 B
$4.6 B
$167.3 B
$16.6 B
Automotive Parts e-Retailing Market: Online Parts vs. Total Aftermarket , North America, 2012 and 2020
2012 2020
Note: All figures are rounded; the base year is 2012.
Source: Frost & Sullivan analysis.
Note: Total aftermarket sales figures are measured at retail level and does not include revenue generated
from service labour. Only retail revenue measured to avoid double counting revenue for auctions and B2B
2016
$8.2 B
$149.6 B
~4 % of total
aftermarket
~6 % of total
aftermarket
~10 % of total
aftermarket
2X
4X

11. 11NBE6-18
Executive Summary -- Automotive E-Retailing by Product Category
Exterior parts, brakes, performance, powertrain and filtration categories drive nearly 50 percent of revenue;
Tires are expected to witness the highest growth in online retailing
Source: Frost & Sullivan analysis.
Automotive Parts e-Retailing Market: Product Category Revenue Analysis, North America, 2012 and 2020
Categories
Revenue
(2012;
Approx;
Billions)
Revenue
(2020;
Approx;
Billions)
% Share
(2012)
% Share
(2020)
CAGR
Online
Value Position
Exterior $0.8 $3.1 17% 19% 19.0%
Prices lower by 25-30%; appeals to DIY segment,
small installers; body parts, lighting key parts
Brakes $0.6 $2.2 13% 13% 17.4%
Prices lower by 10-20%; appeals to DIY segment,
small installers; friction materials key parts
Performance $0.5 $2.2 11% 13% 19.8% Primary appeal to enthusiasts on eBay
Powertrain $0.4 $1.3 10% 8% 14.1% Low volume; higher cost drives revenue
Filtration $0.4 $1.2 9% 7% 13.7%
High volume; lower average price drives down
revenue
Interior $0.4 $1.5 8% 9% 19.1%
Strong growth segment as lower cost and ease of
installation will appeal to both DIYand DIFM
customers
Electrical $0.3 $0.7 6% 4% 11.6% DIFM product will see limited growth
Tires $0.2 $1.5 4% 9% 29.9% Strongest growth expected
Others $1.0 $3.0 22% 18% 14.5% Tools, wipers will drive growth
NOTE: Exterior parts include lights, fenders, bumpers, grilles, side mirrors, hoods, door handles and other accessories
Powertrain parts include engines, transmissions and other related parts
Filtration includes oil, air, fuel and cabin air filters
Interior parts include mirrors, floor mats, seat covers, interior door handles and other accessories
Electricals include starters, alternators, spark plugs and wire sets
Others include chassis parts, exhaust , HVAC, infotainment , tools and wipers

12. 12NBE6-18
Executive Summary -- Digitization Expansion in Auto Parts and Service
Growth in personal, in-vehicle and service shop connectivity is creating new customer touch points
and driving the growth of online and digital sales of automotive parts and service
Automotive Parts e-Retailing Market: Digitization Opportunities in Automotive Aftermarket, North America, 2012-2020
Pre
-2009
2009
-2012
2013-2016
2016-2020
• Virtual service monitoring
(eg. AudiCam)
• Mobile parts shopping
• Online service pre-sale with parts purchase
• Rich media service advice and tutorials
• Service and maintenance apps
• Web and app-enabled service scheduling
• Electronic parts and service promotions
• Web-based parts and accessories sales
• Online dealer and service shop locator
• Online parts catalogs; comparison tools
• Remote repair, assisted
repair
• Remote diagnostics,
predictive analytics
• In-vehicle parts purchases
• Location-based parts and
service purchase
Source: Frost & Sullivan analysis.
Full digital integration of the
automotive service and parts
value chain maximizes
revenue generation
opportunities by increasing
touch points for
parts e-sales as well as other
related products
Indicates direct revenue
generation opportunities

13. 13NBE6-18
Executive Summary -- Automotive Parts E-Retailing Evolution
Emergence of independent e-tailers such as US Auto Parts Network and mass e-tailers such as
Amazon.com fuelled the first wave of parts e-retailing penetration
1995 2000 2005 2012
• Limited sales,
primary focus on
product information
• Limited product
availability
• Expansion of product
lines and SKUs
• Web auctions
• Emergence of
marketplace channels
enabling independent
retailers to sell
through portals
• Emergence of
general merchandise
retailers in the
automotive category
• Focus on improving
customer experience
• Affiliate programs for
generating traffic
• Free shipping
• Same-day shipping
• Extended price
guarantees
• Relaxed return
policies
• Renewed interest in
e-commerce from
traditional parts
retailers
• Mobile shopping
KeyIndustry
Developments
1996: Autozone
launches
autozone.com. More
focus on commercial
program than
attracting regular
consumers
2000: US Auto Parts
Network and
PartsAmerica.com
launch websites.
2000: eBay launches
eBay Motors in the U.S.
2006: Amazon.com adds
automotive parts and
accessories store
2009: Advance Auto Parts
begins offering free shipping
for purchases over $75.
Automotive Parts e-Retailing Market: Automotive Internet Sales Evolution, North America, 1995-2012
Market
Trends
All images are for representational purposes only. Image Source: www.autozone..com; Source: Frost & Sullivan analysis.
1st Wave
Online Development
2nd Wave
Marketplace Growth
3rd Wave
Market expansion
4th Wave
Digital expansion

14. 14NBE6-18
Executive Summary -- Automotive E-Retailing Value Chain
The automotive e-retailing value chain is rapidly expanding, providing emerging opportunities for auxillary
participants such logistics providers, service aggregators and IT solution providers
Source: Frost & Sullivan analysis.
Automotive Parts e-Retailing Market: Automotive E-Retailing Value Chain, North America, 2012
Auto Parts
Suppliers
Delphi, Federal
Mogul, Affinia,
TRW
Traditional
Retailers/
Distributors
NAPA,
AutoZone
Mass
Merchant
Walmart,
Sears, CostCo
Internet Mass
Merchant/
Aggregator
Amazon, eBay,
Ahwooga
OES
Ford, GM,
Honda, Nissan,
other OEMs
Dealers
AutoNation,
Penske
Automotive
E-tailer
US Auto Parts
Network,
Summit Racing
Diagnostic
Data
Providers
AllData,
Mitchell1,
MotoLogic
Logistics
Providers
FedEx, UPS,
Bufferbox,
Amazon Locker
Payment
Providers
PayPal, Credit
Cards, Bill Me
Later, Google
Checkout
IT Solution
Providers
SAP, IBM,
Channel
Advisor, WHI
Service
Aggregators
AutoMD,
RepairPal
App
Developers
Frooition,
Tweddle Group
Telematics
Providers
OEMs, Delphi,
Verizon
CORE PARTICIPANTS AUXILLARY PARTICIPANTS

15. 15NBE6-18
Executive Summary -- Automotive Parts Retail Value Chain Analysis
Internet mass merchants such as Amazon.com show the strongest potential for growth while increasing
interest in parts e-retailing from established participants will reduce opportunities for automotive e-retailers
Automotive Parts e-Retailing Market : Value Chain Analysis – Core Participants, North America, 2012
Source: Frost & Sullivan analysis.
Participant Type Current Status Future Scenario
Growth
Potential
COREPARTICIPANTS
Traditional Parts
Distributor
Little or no direct e-retailing; about 1-2% of
overall sales can be attributed to e-retailing
Expansion of both B2B and
B2C channels
Traditional Parts
Retailer
Increasing focus on e-retailing; gaining
competitive edge in fulfillment; not yet
competitive on fulfillment
Will become more competitive through
improved logistics, acquisitions of smaller
automotive e-tailers
Traditional
Mass Merchant
Overall strong focus on e-retailing but
limited sales of automotive parts
Likely to strengthen focus on automotive
through alliances
Internet Mass
Merchant
Strong focus on automotive parts
e-retailing; emerging winner
Likely to emerge as market share leader in
parts e-retailing
Internet Automotive
Parts Retailer
Very strong sales growth but limited brand
equity; most participantsfocus on third-party
channels to generate sales
Expected to lose out on market share to
automotive retailers and online mass
merchants; many companies likely to be
acquired by bigger competitors
OES/Dealers Limited exposure to direct e-retailing
Expected to gain market share through
e-sales of accessories and apparel
Parts Suppliers Limited exposure to direct e-retailing
B2B opportunity through direct
online sales to installers, fleets
Stable Increasing

16. 16NBE6-18
Executive Summary -- Comparative Analysis of Key Participants
Amazon, AutoZone and Advance Auto Parts show the highest growth potential with robust business models
and strategic initiatives in place
Participant Participant Type Current Strategy Future Strategy
Growth
Potential
Amazon Mass E-tailer
Focus on pricing, selection and fulfillment;
marketplace increases customer choice
while generating commission revenue
Move toward more direct retailing on its
own posing competitive threat to smaller
e-tailers who sell through its marketplace
eBay Mass Aggregator
More than 50 percent of GMV through its
marketplace; aggressively growing its
automotive mobile commerce capabilities
Will face stiff competition from emerging
aggregators; wider acceptance of e-retail
in automotive may diminish dominance
US Auto Parts
Network Inc.
Automotive
E-tailer
Current online revenue leader in
aftermarket; acquisitions have expanded
reach and revenue but reduced profits
Will face stiff competition from more
established participants; likely to invest in
raising brand equity to foster growth
AutoZone
Traditional Parts
Retailer
Vertical integration of e-commerce
capabilities through acquisition of e-tailer,
investment in its diagnostic software unit
Will target improvement in shipping times,
geographic coverage, mobile and social
commerce to gain market share
Advance Auto
Parts
Traditional Parts
Distributor/
Retailer
E-commerce growth one of company’s key
objectives; investing heavily in both B2B
and B2C capabilities
Will position itself as the automotive
“digital solution provider” through
combination of parts e-retail, repair data,
technician e-learning services
NAPA
Traditional Parts
Distributor/
Retailer
Lagging in online presence with fulfillment
models, limited inventory and weak mobile
and social commerce strategies
Stronger e-retailing model expected in the
short term
Ford OEM/OES
Strongest presence among OEMs in
e-retailing but lagging behind other
competitors
Increase focus on B2B channels; limited
focus on B2C in short term
Automotive Parts e-Retailing Market: Comparative Analysis of Key Participants, North America, 2012 and 2020
Growth
Potential
High Medium Low

17. 17NBE6-18
Executive Summary -- Business Model Analysis by Market Participant
Most participants pursue a hybrid strategy to maximize their e-retailing footprint
Participant Type Direct Marketplace Business Strategy
Traditional Parts
Distributor
Because of their large B2B customer base and strong brand equity, traditional parts
distributors primarily follow the direct model. Only smaller participants sell their
products through aggregators
Traditional Parts
Retailer
Automotive parts retailers typically have strong brand presence and investment
capabilities and therefore primarily pursue direct sales.
Traditional
Mass Merchant
Mostly direct sales as mass merchants have strong brand equity and investment
capabilities, particularly in fulfillment. However, participants such as Walmart are
currently exploring their own marketplace channel to compete with eBay and Amazon
Mass E-tailer
Amazon is a key marketplace facilitator for other participants but has been
increasingly growing its own direct sales as well
Automotive Parts
E-tailer
Low brand equity favors pursuit of marketplace channels to leverage the branding,
marketing and fulfillment capabilities of aggregators. Only a limited number of
participants have been successful in direct e-retailing
OES/Dealers
OEMs only sell direct to avoid brand dilution; dealers mostly favor marketplace
to extend customer base
Parts Suppliers
Almost no direct e-retailing; some marketplace presence primarily from smaller
and offshore manufacturers
Automotive Parts e-Retailing Market: Market Participant Business Model Analysis, North America, 2012
Source: Frost & Sullivan analysis.
Degree of
participation
High Medium Low

18. 18NBE6-18
Future of Automotive Parts Sales: Bi-Channel to Omni-Channel
Automotive parts and service purchases will evolve from exclusively single channel “Bricks” and “Clicks”
models to a well-integrated cross-channel that unlocks the full potential of both models
Bricks Model (pre-2000)
Revenue Generation: Product sales
and service make bulk of revenue ; service
revenue key to driving margins
Investment: High; Key cost areas include real
estate, construction, inventory, personnel,
marketing and IT infrastructure
Product Coverage: Physical showrooming
limited by floor space
Fulfillment: Consumer browses in-store
products and makes purchase; Installer
recommends product, consumer makes
purchase and product is installed at bay
Service Opportunities: Integral to bricks
participants ‘ revenue strategies
Revenue Generation: Product sales and
commissions only revenue source;
aggregators also generate revenue from
payment platforms
Investment: Low; Key cost areas include
personnel, marketing , fulfillment and IT
infrastructure
Product Coverage: Unlimited access to
products through “virtual showrooming”
Fulfillment: Consumer browses web or
mobile store and purchases product with
support from virtual staff; Product shipment
requires fee in some cases
Service Opportunities: Currently, very
limited in pure clicks retailing
Current Convergence Strategies





Source: Frost & Sullivan analysis.
Future Convergence Strategies
Websites
Social
Commerce
Mobile
Commerce
Customized
Fulfillment
Service
Aggregation
Digital
Retailing
Telematics
Clicks Model (pre-2000)

19. 19NBE6-18
Executive Summary -- Bricks and Clicks Convergence Matrix for Parts Retailing
Same day shipping, click ‘n’ collect in store, digitization of the store experience and service aggregation are
most likely to see high levels of adoption and will be the building blocks of the omnichannel strategy
Automotive Parts e-Retailing Market: Bricks and Clicks Convergence Matrix, North America, 2012
Low Degree of Adoption High
DegreeofCertaintyLowHigh
Same Day
Shipping
Digital Staff
In-vehicle
shopping
Crowdsourced
Delivery
Locker Box
Location-based
deals/shopping
Service
Aggregation
Click ‘n’
Collect
Social Selling
Source: Frost & Sullivan
In-app
augmented
reality
Digital Kiosks

20. 20NBE6-18
Parameters Current Future
Market Status
• Total online sales of parts and accessories was $4.6 billion in
2012, representing about 4 percent of all aftermarket sales
• The market grew from $3.1 billion in 2009 at a CAGR of about
14.2 percent
• E-retailing for automotive parts is expected to
reach $16.6 by 2020, accounting for about 10
percent of all aftermarket parts sales
• The market will grow at a CAGR of 17.4 percent
Competition
• Marketplace platforms accounted for 80 percent of all sales; the
rest being sold through the direct channel
• Independent automotive e-tailers led the market with about 48
percent of revenue share
• Direct channel will represent 25 percent of all
sales, while marketplace will drop to 75 percent
• Mass e-tailers (Amazon, Google) and traditional
retailers (AutoZone, Pep Boys) will lead market
with 26 and 25 percent of sales respectively
Solutions
• 96-98 percent of purchases made through websites.
• Apps, mobile sites and social media platforms are primarily used
as marketing and promotional tools
• Nearly 20 percent of all e-sales likely to be
generated through mobile platforms
• Full mobile and social commerce likely to be
pursued
Value
Proposition
• Key differentiator is pricing, which is lower than traditional bricks
channels by 15-20 percent
• Ability to compare prices online, access to higher number of
SKUs and digital promotions other factors driving consumers to
buy parts online
• Convenience factors such as faster shipping,
customized fulfillment and virtual repair support
will emerge as key differentiators between
competitors
Product
Segmentation
• Exterior and performance parts accounted for about 28 percent
of sales, as these products tend to be offer the most value (25-30
percent less expensive) when purchased online
• Brakes and filtration were other key categories, with higher
volumes but slightly lower revenue share at 11 and 9 percent
respectively
• Tires will account for 9-10 of all sales by 2020 with
a 30 percent CAGR
• Exterior, performance and brakes will continue to
be the dominating categories in 2020
Executive Summary—Key Findings and Future Outlook
Successful independent automotive e-tailers will be acquisition targets leading to greater
consolidation in the market
Source: Frost & Sullivan analysis.

21. 21NBE6-18
Market Engineering Methodology
One of Frost & Sullivan’s core deliverables
is its Market Engineering studies. They
are based on our proprietary Market
Engineering Methodology. This approach,
developed across the 50 years of
experience assessing global markets,
applies engineering rigor to the often
nebulous art of market forecasting and
interpretation.
A detailed description of the methodology
can be found here.
Source: Frost & Sullivan research