Nowadays, it is not a new thing for car companies to enter shopping malls with large traffic. "Foreign monk" Tesla set a precedent, the model of direct operation + experience store, not only gained a lot of exposure and crowd flow, but also brought a better experience to consumers with price transparency. With the rapid growth of Tesla's sales, many new energy vehicle companies and brands have followed suit and started a shopping mall "enclosure movement".
If in Beijing, pick out the shopping malls where car companies are most crowded, Hopson Hui in Chaoyang District should be on the list. Entering through the southwest gate, you can easily find a WEIlai space with two exhibition cars, ES8 and ES6. Take the escalator up to the 5th floor and you'll feel like you're in a "car supermarket" because there are nearly 10 new energy brands.
On the side close to the cinema, there are Xiaopeng, Nezha, Weima, Lantu, Tianji, and Jihu, and around the children's playground, there are the exhibition halls of Ideal, Extreme Kr and SAIC Maxus. During the half-hour of stopping, Geek Park found that there were more than a dozen groups of customers consulting, and they seemed to have become accustomed to seeing car brand stores in the mall.
However, in addition to Wei Xiaoli, which has been attracting much attention in recent years, in the face of other new energy brands in the mall, many customers are difficult to distinguish, confused, "what is this brand, what is its name".
Tesla 4S store
Just when consumers are becoming more and more accustomed to experiencing stores, Tesla has killed a "back gun" and begun to increase the traditional 4S store model. This has led the industry to think: what will the ultimate format of car sales look like? In the game of cost, efficiency and user experience, will the supermarket store with better customer experience replace the criticized 4S store model? Is it to choose Tesla's direct model, or to use the agency or authorization model?
The change of location: from the core to the outer business circle
Compared with traditional car companies, Tesla is an "industrialized sales model", and the whole can be described as "minimalist". Anyang of Beijing Hyundai Motor's Electric Vehicle Division told Geek Park (ID: geekpark) that this is mainly reflected in the form of products and channels. In terms of products, Tesla's main sales products are only Model Y and Model 3, a total of only 5 models. Consumers' perception of the product is very simple, there is no need to ask for a lot of sales verification, you can directly place orders online.
In terms of channel network, Tesla has two main forms: Tesla experience store and Tesla center store. Among them, most of the experience stores are located in shopping malls or shopping malls, that is, common supermarket stores, which mainly provide display and experience functions; the central store is located in the traditional automobile business circle with convenient transportation, integrating experience, delivery, after-sales service, and charging, similar to the traditional 4S stores, the difference is that Tesla has adopted a direct operation model.
Since opening its first experience store in Beijing in 2013, Tesla has been constantly trying and adjusting in the channel layout. Recently, there is a saying in the industry that Tesla is systematically closing experience stores located in luxury locations in first- and second-tier cities.
Many consumers may feel the same way. Indeed, Tesla has closed some experience stores in Beijing, Shanghai, Guangzhou, and Shenzhen, such as 4 experience stores in Beijing in 2021. Among them, the most special is the Joy Spring Breeze in Beijing's Daxing District, Tesla officially moved in in March 2021, but in just half a year, the store was closed.
Why is Tesla closing its stores? A Tesla staff member told Geek Park that in general, the lease period of a shopping mall or mall storefront is generally two to three years. During this period, Tesla will comprehensively evaluate the efficiency of the store to decide whether to adjust. Of course, if you close the store for half a year, you may encounter unexpected situations.
There are many indicators about measuring store efficiency, the most important of which is the sales funnel model. Simply put, the sales volume of a single store = the amount of stores× the retention rate× the test drive rate× the turnover rate. The job of sales operations is to exhaust all means to increase the ratio of each node. If a store is below a certain average for a long time, it is likely to encounter store closures.
Many people may conclude that Tesla is closing its experience stores in first- and second-tier cities, is this correct? From the current data, this statement cannot be supported. Taking the north, Shanghai, Guangzhou, and Shenzhen as an example, although Tesla closed 9 experience stores in 2021, it also opened 11 new ones, and the total number increased from 39 to 41. It can be seen from here that Tesla's experience stores in first- and second-tier cities have remained stable overall.
However, Tesla is not static, and the changes are in subtlety. A person familiar with Tesla told Geek Park that Tesla's sales strategy in the Chinese market has continued to expand from the initial core business district of the city to the peripheral business circle.
In Beijing, for example, Tesla opened its first experience store in China in Parkview Yerba Buena, between the East Second Ring Road and the East Third Ring Road, close to the Beijing CBD. In the following years, Tesla experience stores began to spread to the peripheral business circles, such as opening stores in INDIGO and Chaoyang Joy City in 2016, the location was mainly concentrated between the fourth and fifth rings; with the localization of Model 3 and Model Y, Tesla's experience stores in the past two years further spread to suburban business circles, such as Xiangyun Town in Shunyi in 2019 and Xihongmen Gathering in Daxing District in 2020.
At present, Tesla's experience stores within the third ring road of Beijing are only the Parkview Fangcaodi store and the Financial Street store, and the remaining 15 experience stores are mainly concentrated around the fourth and fifth ring roads, and even more distant suburban business districts.
The reason for the current situation is mainly related to the positioning and product strategy of the experience store. After analysis, Anyang said that Tesla's experience stores are mainly divided into three categories: one is the flagship store that focuses on the brand image, the number is very small, located in the core business circle, such as the Parkview Fangcaodi store; the second is the 150 to 250 square meters of the supermarket store, although it has the function of brand exposure, but ultimately to survive or rely on the evaluation of efficiency; the third is the pop-up store, that is, the temporary booth in the supermarket, generally only two to three months, more or more brand promotion function.
For most experience stores, Anyang has made an image analogy, which is Tesla's "mobile position", which will switch between different business districts according to efficiency. Generally speaking, the area covered by the experience store is about 3-5 kilometers around. In the absence of a new model on the market, the life cycle of the experience store may be about two or three years.
In other words, the potential customers around the Tesla experience store will be exhausted after two or three years. If you continue to open, you may encounter a decline in the number of stores, test drives or sales, so you will not have to move to other business districts.
Structural change: from experience store to central store
Now, many people equate supermarkets with Tesla channels. Just when people are accustomed to this, Tesla is undergoing a deeper structural adjustment: stabilizing the number of experience stores and increasing the number of central stores. Unlike experience stores, which are mostly located in crowded business districts, Tesla Center stores are mainly located in traditional automotive business districts.
The data shows that the number of Tesla stores in the North, Shanghai, Guangzhou, and Shenzhen Centers has increased from 21 in 2020 to 29 at the end of 2021, an increase of nearly 40% year-on-year, significantly higher than that of experience stores. This also means that Tesla began to return to the integration of sales and after-sales and entered the core business circle of the car.
The reason for this change is, on the one hand, that Tesla's ownership is expanding rapidly. The model of the central store before the store and the factory can better serve the existing customers. It is understood that there are currently more than 500,000 Tesla owners in China, a large part of which are in first-tier cities in the north, Shanghai, Guangzhou, and Shenzhen.
On the other hand, a central store can reduce storefront rents and operating costs. A person in the commercial real estate industry close to Tesla once said that the operating costs of the Tesla center store are only about half of the experience store + service center.
If the experience store area is calculated at 300 square meters, the decoration cost is about 2 million yuan, the monthly rent is 400,000 yuan, the average 10 employees, and the monthly operating expenses are 500,000 yuan. The service center has a larger area, about 800 square meters, with a monthly rent of about 200,000 yuan; the standard is 8 people, and the monthly operating cost is 300,000. This also means that the monthly operating expenses are around 800,000.
In contrast, Tesla Centers are mostly located in traditional automotive business districts and have lower costs. If you take the Tesla center 1000 square meters, the rent is about 250,000 / month, the staff configuration of 15 people, the monthly operating cost is about 400,000 yuan. At present, many 4S stores are facing closure due to operational difficulties, Tesla can even use lower rents to win these properties.
Theoretically, there is another advantage of opening more central stores, while improving the after-sales service capabilities, it also takes advantage of the characteristics of most car owners or people who intend to buy cars in the automobile business circle to further stabilize its sales.
However, in the short term, the sales function of the Tesla Center is not particularly full. A staff member of the Tesla Center store said that there are not many customers who usually enter the store, that is, three or four groups of guests, and there are slightly more on weekends. Although there are four brand 4S stores in the park, the customer groups of Nissan and Honda next to them basically do not overlap with Tesla, so there are not many customers who come from the next 4S store to see the car. It wasn't until the Land Rover 4S store moved in that things got a little better.
Channels accelerate sinking
If Tesla's adjustment in first-tier cities is mainly to solve the problem of efficiency improvement; then the layout in the second and third lines is how to quickly sink the market and lay out the blank market.
According to the data, in 2020, Tesla's experience stores and service centers in Chinese mainland have exceeded 180, covering more than 50 cities across the country. By 2021, those numbers will be 240 stores.
This means that tesla stores have increased by a total of 60 stores in the past year. Most of these newly opened stores are the result of the sinking of channels in third-tier cities.
In terms of specific sinking strategies, Tesla abandoned the early model of experience stores + service centers, but adopted a more flexible approach. According to the data from the official website, in the new first-tier cities such as Nanjing and Hangzhou, Tesla adopts the experience store as the mainstay, the central store as the supplement, and the after-sales store as a supplement; in the second-tier cities below, it adopts the central store as the main and the experience store as the supplement; the third-tier city channel is the focus of the effort in 2021, basically taking the form of "one city and one center store".
In contrast, Weilai, Xiaopeng, and the ideal sinking strategy are more radical. Ideal Car, for example, had 52 retail centers in 41 cities by the end of 2020. Just one year later, Ideal Has 206 retailers in 102 cities. In one year, the ideal new covers 61 cities, adds 154 experience stores, and opens an average of 12 experience stores a month, many of which have sunk to fourth-tier cities.
As for the reason, it is that car companies deploy channels in advance according to products and sales. Li Xiang, CEO of Ideal Auto, once said, "We found that a city has or does not have an ideal car store, and the market share is 8 times different. This means that physical stores can greatly increase car sales, so channel expansion should be carried out. Don't look at what competitors will do, you have to take the initiative of competition into your own hands."
For how to choose the layout of cities and regions, Anyang said that most of the new energy vehicle companies adopt a benchmarking strategy. Li Bin said in March 2021, "We have a basic strategy, there are Mercedes-Benz, BMW, Audi 4S stores in the city, we will build an offline store." At present, we still have some places that have not been covered, and we believe that we have covered these stores this year, which is a holistic idea."
Prudent
In fact, the current fire of the supermarket experience store model is not tesla's original. In the technology industry, Apple and Microsoft have adopted this model; in the automotive industry, Mercedes-Benz has also tried it in Sanlitun, but the effect has not been as expected.
Why Tesla's experience store has become a benchmark, in addition to the popularity of products, is largely due to changes in the attributes of automobile products and user psychology. Before Tesla, cars were seen as large-scale industrial products, but Tesla's intelligent attributes turned cars into trendy electronics. Xiaomi Lei Jun once described the future car as "a smart car is a big mobile phone plus four wheels", and the car has changed from a travel tool to a smart terminal.
At the same time, Gen Z consumers are more receptive to innovation, faster and more casual in their decision-making, and they prefer cars to find people rather than people when they buy cars.
In addition, the bottom reason why supermarkets can succeed is that the business model can go through. Anyang said that behind a series of adjustments and layouts of Tesla and new car-making forces, it adheres to the strategy of industry-finance integration.
The so-called "integration of industry and finance" is a hot concept in recent years, and many industries have begun to apply it. What is the integration of karma and wealth? Literally, it is the integration of enterprise business and finance, which actually means that in addition to the inherent functions, financial management also needs to provide more information support for the development of enterprise business to help enterprise expansion and internal control.
In this regard, Huawei is a benchmark model. According to the financial report, Huawei's revenue in 2021 will be 630 billion yuan and net profit will be 64 billion yuan. As a global company with business in more than 170 countries and regions and nearly 200,000 employees, Huawei can issue monthly financial reports in 3 days and complete annual financial reports in 11 days through industry-finance integration, which can provide more data support for corporate decision-making.
Specific to the automotive industry, before Tesla, it is difficult for traditional OEMs to achieve true integration of industry and finance. The reason is that in the traditional authorized 4S shop model, the host manufacturer is mainly responsible for car design and manufacturing, and the sales work is mainly responsible for the dealer, so it is difficult to grasp the effective terminal operation data. Even if the BBA and Japanese manufacturers are among the best, the control of dealers is very strict, and the process data and financial data obtained will still be distorted and incomplete. As a result, vendors are unable to make business adjustments based on empirical data.
In contrast, all Tesla stores are directly operated, site selection, decoration, personnel recruitment, product sales, are their own responsibility. Although the initial investment is relatively large, you can get very detailed and real operational data, and you can also refine the indicators of the sales funnel, so as to provide business guidance to regions, cities, stores, and individuals.
Anyang said that according to Musk's thinking, only direct operation can reduce the cost of intermediate links and improve efficiency to a greater extent. "With the flow of information opened and the financial and operational data connected, Tesla can implement efficient management, and can implement management to stores, businesses, people, and even car owners." Although Tesla has paid more financially and slowed down the development of the channel, in the long run, the efficiency of direct operation is the highest."
From the current point of view, Tesla's channel is very efficient. According to Anyang's calculations, in 2021, Tesla's sales in Chinese mainland will be 320,700 vehicles, and the average annual sales of a single store will be 1405 units, of which 1533 units will be in first-tier cities, 1459 in new first-tier cities, and 1200 units in 2-3 lines.
This is a very shocking statistic, even comparable to BMW, Mercedes-Benz and Audi that have been operating in China for decades. According to official statistics, bmw, Mercedes-Benz and Audi delivered in China in 2021 will be 846,200 units, 758,900 units and 701,300 units, respectively. If you exclude the number of their dealers, then their sales per store are about 1410, 1112, 1348.
Diversify your efforts
After seeing Tesla's success, new energy brands have also begun to emulate Tesla. Of course, they do not completely copy the operation, but according to their own positioning, the development of a diversified sales model.
Generally speaking, according to the importance of investment in channels and the degree of close operation of automobile manufacturers, it can be mainly divided into three modes: authorization, agency and direct operation.
Among them, authorization is the main model adopted by the current main engine factory, wholesale to dealers after the production of the car, most of the rest is responsible for by the dealer, so the model is also the lightest; followed by the agent model in the middle, mainly according to the quality of service and sales to pay commissions to agents; the most important is the direct operation model, all things need to be done by the manufacturers themselves.
At present, among domestic manufacturers, the most similar to Tesla is Weilai and Ideal. In the early days, in order to rapidly expand its sales channels, NIO adopted a direct operation + agent model. However, in the first half of 2021, WEILAI converted all the previous 100 WEILAI spaces that adopted the agency model into a direct operation model.
In contrast, the ideal channel is mainly "retail center + maintenance center + authorized sheet metal spray center", and the retail showroom is only a supermarket pop-up store, not a long-term retail store in the strict sense.
In addition to turning the agent into a direct operation, the biggest feature of NIO is customer operation. Although NIO currently has less than 200,000 car owners, on its APP, fans have approached 2 million, forming its own car ecology, and also constituting the biggest difference between WEILAI and other manufacturers.
If you open the WEILAI APP, there is not only official information on it, but also the sharing of the owner's or netizens' dynamics, as well as interesting peripheral products. At the same time, WEILAI pays special attention to guiding car owners to offline gatherings, the theme is not only related to cars, but also includes handmade leather goods, basketball, football, etc., which not only increases the stickiness of users, but also provides a communication platform for users and car companies.
Anyang said that another significant feature of the channel reform is the re-emergence of the agency system. The so-called agency system is a model between the traditional authorized 4S stores and the brand direct sales stores. From the perspective of specific division of labor, the agent is responsible for the display, invitation, test drive, delivery and after-sales of the car, while the host manufacturer is responsible for pricing, invoicing, shunting, and paying commissions to agents according to service quality and quantity.
Among the new forces, Xiaopeng, Nezha and Zero Run adopt the direct store + agent model, of which the number of agent stores is larger. In terms of agency, the farthest going is Volkswagen, which has tried agency in many countries around the world to promote its ID. Series pure electric vehicles. However, FAW-Volkswagen did not look for dealers again, but selected excellent agents in a network of more than 900 dealers nationwide to re-sign agency contracts and authorize these agents to operate IDs. Products.
This also means that although organizationally speaking, id. The series has an independent headquarters, and each region has a special business team, but specific to the sales terminal, the authorization system and the agency system exist at the same time. How to guide and allocate resources has become a problem that both the public and dealers have to face. Currently, SAIC Volkswagen ID. The number of agents has increased to 572, basically achieving coverage of first-, second- and third-tier cities.
Judging from the current results, Volkswagen's agency system is not going well. Official data shows that in 2021 Volkswagen will sell a total of 70,600 ID vehicles in China. Series of pure electric vehicles, did not meet the annual target of 80,000-100,000 units. In this regard, Stephan Wollenstein, CEO of Volkswagen China, also admitted that 2021 will be difficult for his team.
"As a traditional manufacturer, Volkswagen can achieve sales of 60,000 or 70,000 yuan, which is already good, and it has paid a considerable cost of trial and error." Anyang said that the mass agency system is not going well at present.
Why? Because the authorization 4S store model and the agency model are two completely different business logics. Simply put, from the perspective of manufacturers, the traditional authorized 4S stores take the wholesale model, is the ToB business, usually based on production and sales, dealers become the "reservoir" of the sales volume of the main engine factory; but the agent is essentially a direct sales model, which is a To C retail play for consumers, and the current host manufacturers do not have similar capabilities.
Will direct marketing become mainstream?
The direct sales model represented by new cars has gradually been accepted by the entire industry and consumers, but the overall volume is still relatively small. According to the data of the circulation association, the independent channel network of new energy has increased year by year, and by the end of 2020, it has reached 2600, accounting for 9.3% of the national authorized network. In 2021, although many manufacturers have sunk in the channel, the proportion is still limited.
In contrast, the current channel mainstream is still the distribution model and 4S store format. According to the data of the China Circulation Association, there are currently nearly 30,000 authorized 4S stores nationwide. However, the recent frequent incidents of car owners' rights protection also show its drawbacks, such as consumers buying a car when negotiating is very painful, making the consumer experience very poor, and there are also minor illnesses and overhauls and excessive maintenance problems during maintenance.
Buick 4S store
At present, the new energy manufacturers represented by Tewei Xiaoli have indeed stirred up the current channel network. So is this the mainstream model of the future channel?
Cui Dongshu, secretary general of the Association, told Geek Park that it was too early to make this judgment. At present, each OEM is constantly trying to find the optimal solution that suits them. For the issue of channels, if you expand in detail, there are actually two levels of problems. First of all, will the current widely respected supermarket model continue or be a phased format?
To answer this question, we must first understand the challenges facing car companies today. For new energy manufacturers, the most important thing in their KPIs or OKRs is how to quickly increase sales and penetration. Li Xiang said in the ideal car 6th anniversary open letter that they expect China's new energy market sales to be 8 million in 2025, ideal car to achieve a market share of 20%, 1.6 million sales, in order to seize the initiative in the future.
Therefore, all products and channel construction must be carried out around this goal. At present, there is still an irreplaceable role for the sales of new energy vehicles in supermarket experience stores. According to Odex's statistics on 15 new energy brands, as of August 2021, more than 1,200 new energy supermarkets have been opened nationwide, distributed in 733 shopping centers in 156 cities.
With more and more auto supermarkets in the core shopping malls of each city, there are 19 auto supermarkets on the first floor of Guangzhou Yuehui City, and 10 new energy brands on the 5th floor of Beijing Hopson Hui.
In contrast, traditional manufacturers face different problems, they have their own sales system. The question they face is, how to adapt the original system to meet the needs of today's customers? For supermarkets, traditional brands have not yet reached a unified opinion, and there are many different voices inside, such as supermarkets invested and built by manufacturers or dealers? Does return value spread or sales? How is the relationship with the traditional licensing channel network handled?
In addition, another level of the question is, direct operation, agency, licensing model, which will become the mainstream model of automobile sales in the future?
For the direct operation model, Tesla is currently at the forefront, new cars are following up, and new brands of traditional car companies are also trying. However, the direct operation model is not a "golden oil", the advantage is in the user experience, the disadvantage is large investment, high management complexity.
According to the financial report data, as of the end of 2021, Tesla's annual sales were 936,000 vehicles, but the global workforce also reached 99,300, an increase of 40% year-on-year. In contrast, Geely Automobile, which uses the licensing model, sold 1.33 million vehicles last year, but only employed about 35,000 people. The difference in the number of employees between the two is mainly manifested in channel personnel.
Anyang said that the same sales of 1 million vehicles, if according to toyota's configuration, the sales company personnel in about five or six hundred people; according to Tesla's annual sales of 1400 vehicles per store, about 714 stores, based on each store configuration of 10 people, a total of 7140 people.
Musk aims to sell 20 million cars by 2030. If all of them adopt the direct operation model, Tesla will only sell the number of people, it will be close to 150,000 people, and the difficulty and complexity of management can be imagined.
Overall, for the main engine factory, there is no "cheats" to defeat the enemy once and for all. Cui Dongshu said that the channel layout of future car companies needs to be combined with their own stage, product positioning, target population, and funding level, which may be a mixed model. Of course, this process is not achieved overnight, it needs to be done step by step, constantly adjusting, trial and error. No matter how it changes, there is a main line behind it, which is the balance between customer experience and channel efficiency.