Tesla JD car sales: Gimmick or gimmick?
Elon Musk, whose brain is different from others, always seems to bring us some fresh ideas. After demanding that Twitter engineers increase the priority of his tweets by 1000 times, Tesla has recently launched an interesting new initiative: expanding its e-commerce channel layout.
On February 14th, Tesla's JD flagship store announced its opening, claiming to have launched 22 categories and more than 200 products. Although Tesla is not currently selling cars on JD, with Musk's consistent aggressive and innovative style, anything is possible in the future.
Of course, Tesla's presence on JD has not yet created much value and influence. Consumers and peers are all watching: what are the two giants really up to? Is Tesla really turning peripheral products into a new source of revenue? Is JD also seizing this opportunity to enter the auto market?
With these questions in mind, the Value Research Institute (ID: jiazhiyanjiusuo) takes this opportunity to review the tumultuous automotive e-commerce industry, as well as the calculations behind the partnership between Tesla and JD.
Of course, Tesla's presence on JD has not yet created much value and influence. Consumers and peers are all watching: what are the two giants really up to? Is Tesla really turning peripheral products into a new source of revenue? Is JD also seizing this opportunity to enter the auto market?
With these questions in mind, the Value Research Institute (ID: jiazhiyanjiusuo) takes this opportunity to review the tumultuous automotive e-commerce industry, as well as the calculations behind the partnership between Tesla and JD.
Tesla flagship store on JD, sells everything except cars
After the opening of the Tesla JD flagship store, the Value Research Institute (ID: jiazhiyanjiusuo) conducted the login experience for the first time.
Currently, the total number of fans in the store is 0.532 million people, and such a high number of fans has been accumulated in just two days, which shows the high popularity of Tesla. However, overall, there are still many issues with the store.
First, let's look at the types, quantity, and store page settings of the products on the shelves.
Opening the homepage of the Tesla JD flagship store, the first things at the top are charging products, preferred accessories, boutique peripherals, and boutique clothing. The scrolling recommendation bar at the top of the page features three products: home charging service packages, remote control keys, and Tesla rabbit year hoodies. These are believed to be the current flagship products promoted by Tesla.
After the opening of the Tesla JD flagship store, the Value Research Institute (ID: jiazhiyanjiusuo) conducted the login experience for the first time.
Currently, the total number of fans in the store is 0.532 million people, and such a high number of fans has been accumulated in just two days, which shows the high popularity of Tesla. However, overall, there are still many issues with the store.
First, let's look at the types, quantity, and store page settings of the products on the shelves.
Opening the homepage of the Tesla JD flagship store, the first things at the top are charging products, preferred accessories, boutique peripherals, and boutique clothing. The scrolling recommendation bar at the top of the page features three products: home charging service packages, remote control keys, and Tesla rabbit year hoodies. These are believed to be the current flagship products promoted by Tesla.
Looking closely, although the number of charging products/large gift pack SKUs is limited, their prices are the highest, which is crucial for increasing the store's gross profit. The Value Research Institute (ID: jiazhiyanjiusuo) observed that the 3rd generation Tesla home charger, priced at 7200 yuan, has already received over 100 after-sales reviews within just two days of being online, making it the best-selling charging product.
In comparison, the sales of accessories, boutique peripherals, and clothing, which should have taken the low-profit, high-sales route, are not as high as expected. Among them, most of the after-sales reviews for boutique clothing and boutique peripherals are zero, and only a few products in the preferred accessories category, such as the Tesla Model Y front side fender (exclusive for cars) and the Tesla Model 3/Y smart remote control key, have received a single-digit number of reviews.
It can be seen that Tesla and JD did not have too much publicity for this entry and are still in the exploratory stage. Tesla owners also need time to develop online consumption habits.
In comparison, the sales of accessories, boutique peripherals, and clothing, which should have taken the low-profit, high-sales route, are not as high as expected. Among them, most of the after-sales reviews for boutique clothing and boutique peripherals are zero, and only a few products in the preferred accessories category, such as the Tesla Model Y front side fender (exclusive for cars) and the Tesla Model 3/Y smart remote control key, have received a single-digit number of reviews.
It can be seen that Tesla and JD did not have too much publicity for this entry and are still in the exploratory stage. Tesla owners also need time to develop online consumption habits.
Next, let's look at the store's promotions and new user acquisition activities. From the intensity of the promotions, it can be seen that Tesla and JD are not focusing too much on user conversion and retention at the current stage, and the activities they have launched are quite limited.
After going online, the official store only launched a 201 yuan third-generation home charging service package discount voucher that can be claimed from February 13th to 15th, limited to 20,000 copies. As of the time of writing, the activity period has ended, and the mobile terminal has also removed relevant information, but the web page still retains the activity poster. From this, it can be inferred that the store's operation has not yet been on track, and there are still some deficiencies in daily management.
After going online, the official store only launched a 201 yuan third-generation home charging service package discount voucher that can be claimed from February 13th to 15th, limited to 20,000 copies. As of the time of writing, the activity period has ended, and the mobile terminal has also removed relevant information, but the web page still retains the activity poster. From this, it can be inferred that the store's operation has not yet been on track, and there are still some deficiencies in daily management.
Finally, let's take a look at the situation of after-sales service and on-site installation.
Among the SKUs that have been launched, only charging products require on-site installation. According to observations, Tesla charging station home installation package, home charging station relocation, and other products/services provide on-site installation and after-sales service. According to customer service, the ordering process for these products is: appointment survey - one-on-one communication with a human customer service within 24 hours - on-site installation and commissioning according to the appointment time.
From the above process, the charging products/services of the Tesla flagship store on JD.com are no different from Tesla offline stores and self-operated channels, and can meet the basic needs of users, but they may not necessarily be more convenient.
In summary, the Tesla JD.com flagship store has just been launched and is still in its early stages, with both its products and services needing improvement. In addition, there was not much promotion or even a sense of urgency before the store went online, so there is no need to expect a large volume of transactions in the short term. However, the operation teams of Tesla and JD.com have put a lot of effort into it, such as providing activities like zero-membership fee.
Of course, the collaboration between Tesla and JD.com is certainly more than just making a little money or creating a gimmick. The small Tesla JD.com flagship store may carry the ambitions of these two giants.
Tesla, which has no trouble selling, and JD.com, which has no shortage of goods, each have their own calculations.
Every cooperation reached in the business society must consider the demands of both parties, and Tesla and JD.com are no exception. However, the problem lies in the fact that at first glance, Tesla and JD.com don't seem to need each other so much.
On the one hand, Tesla has no worries about selling, and its offline channels have been thriving. Moreover, like other car brands, Tesla's reliance on e-commerce channels is not high, and its offline stores are still expanding.
According to the financial report, as of the end of last December, the number of Tesla's offline stores in China increased by 10.6% compared to the beginning of the year, with new stores mainly located in new first-tier cities. On the contrary, many stores in Beijing and Shanghai city centers have been closing down during the year, seemingly intending to relocate to lower-rent locations.
On the other hand, Tesla has already established a presence on multiple e-commerce platforms, and JD.com has already missed the opportunity to compete for the first place. Moreover, JD.com has a rich selection of car-related products, so the demand for Tesla is not so urgent.
As early as 2014, Tesla entered Tmall, and the investment was even greater than it is today - even including vehicle sales. However, Musk quickly put an end to this plan and instead focused on expanding offline stores, with the goal of consolidating the research and development, production, sales, and after-sales loop.
Although Tesla's Tmall flagship store has been retained, it has also entered Douyin and JD.com one after another, but Musk has never been very interested in online car sales. In addition, Tesla has opened an official account on Kuaishou, but has not opened a store.
On the JD.com side, automobiles and related accessories are not its main category. Even on the classification page of the JD.com app homepage, there is no separate entry for automobiles. Before Tesla, leading brands such as Great Wall, Wuling Baojun, Lingzhi, and Buick have opened stores on JD.com, but almost all the best-selling products are test drive reservation services priced below 10 yuan.
So what is the purpose of this cooperation between the two sides, which came almost without any warning?
The Institute of Value Research (ID: jiazhiyanjiusuo) believes that the starting points and demands of Tesla and JD.com may be completely different: the former may be to test the market and user response, and try to increase the sales of surrounding products to provide an additional source of revenue; the latter is for defensive purposes, keeping up with the pace of competitors such as Taobao and Douyin.
From Musk's perspective, although not keen on online car sales, selling peripheral products on e-commerce platforms may also bring new surprises.
In the past, Tesla has indeed produced many popular peripheral products. For example, the satin shorts launched in July 2020, priced at $69.42, sold out quickly, even Musk himself boasted about it on Twitter. In addition, products like the $50 Cyberwhistle launched in December 2021, belt buckles with the Tesla logo priced at $150, and the lightning-bottle packaged tequila priced as high as $270 have also sold out.
Looking at the pricing of these products, it is not difficult to see that Tesla's peripheral products and services are priced on the higher side, catering to a specific group of users. JD.com's higher average order value and reputation for after-sales service undoubtedly align more closely with Tesla's brand temperament compared to platforms like Douyin.
However, for JD.com, selling cars is not as simple as dipping into a new business—especially with platforms like Douyin and Taobao using live streaming e-commerce to aggressively enter the car market, JD.com is undoubtedly facing increased pressure.
Official data released by Douyin indicates that in 2021, the platform's automotive-related video views surged by 318% year-on-year, with the proportion increasing from 14% in 2020 to 25%. Although the 2022 data has not been announced yet, considering Douyin's significant efforts in that year, with events like the 'Car Carnival' to boost interest, it is likely that the viewership of car-related videos on the platform remains high.
For JD.com, missing out on the live streaming trend, they naturally do not want to miss any potential growth opportunities. But it's important to note that automotive e-commerce is not an easy business, with predecessors having faced many painful lessons. JD.com, as well as Taobao and Douyin, all need to face serious challenges.
The two hurdles of automotive e-commerce: offline barriers and profit games
Looking back at the development history, the domestic automotive e-commerce industry did not start late and has had a period of glory.
According to the statistics from Asia Vets Consulting, the period from 2014 to 2019 was a phase of rapid growth in the Chinese auto e-commerce market, primarily manifested in the sharp increase in the number of relevant enterprises, the sustained activity in the financing market, and the improvement in penetration rate. In 2019, the number of Chinese auto e-commerce and related enterprises reached a historical peak of 97,038, a significant increase of 49% from 65,112 in 2018.
The transaction volume of the Chinese auto e-commerce market also surpassed the trillion mark for the first time in 2019, reaching 1.05 trillion, with a year-on-year growth rate of 22.24%, nearly 16 percentage points higher than 2018. Thanks to the massive investment and traction on corresponding platforms, the user base of auto e-commerce also soared during this period. Statistics from Autohome show that in 2019, the user base of Chinese auto e-commerce reached 143 million people, a 33.64% year-on-year growth.
Among the SKUs that have been launched, only charging products require on-site installation. According to observations, Tesla charging station home installation package, home charging station relocation, and other products/services provide on-site installation and after-sales service. According to customer service, the ordering process for these products is: appointment survey - one-on-one communication with a human customer service within 24 hours - on-site installation and commissioning according to the appointment time.
From the above process, the charging products/services of the Tesla flagship store on JD.com are no different from Tesla offline stores and self-operated channels, and can meet the basic needs of users, but they may not necessarily be more convenient.
In summary, the Tesla JD.com flagship store has just been launched and is still in its early stages, with both its products and services needing improvement. In addition, there was not much promotion or even a sense of urgency before the store went online, so there is no need to expect a large volume of transactions in the short term. However, the operation teams of Tesla and JD.com have put a lot of effort into it, such as providing activities like zero-membership fee.
Of course, the collaboration between Tesla and JD.com is certainly more than just making a little money or creating a gimmick. The small Tesla JD.com flagship store may carry the ambitions of these two giants.
Tesla, which has no trouble selling, and JD.com, which has no shortage of goods, each have their own calculations.
Every cooperation reached in the business society must consider the demands of both parties, and Tesla and JD.com are no exception. However, the problem lies in the fact that at first glance, Tesla and JD.com don't seem to need each other so much.
On the one hand, Tesla has no worries about selling, and its offline channels have been thriving. Moreover, like other car brands, Tesla's reliance on e-commerce channels is not high, and its offline stores are still expanding.
According to the financial report, as of the end of last December, the number of Tesla's offline stores in China increased by 10.6% compared to the beginning of the year, with new stores mainly located in new first-tier cities. On the contrary, many stores in Beijing and Shanghai city centers have been closing down during the year, seemingly intending to relocate to lower-rent locations.
On the other hand, Tesla has already established a presence on multiple e-commerce platforms, and JD.com has already missed the opportunity to compete for the first place. Moreover, JD.com has a rich selection of car-related products, so the demand for Tesla is not so urgent.
As early as 2014, Tesla entered Tmall, and the investment was even greater than it is today - even including vehicle sales. However, Musk quickly put an end to this plan and instead focused on expanding offline stores, with the goal of consolidating the research and development, production, sales, and after-sales loop.
Although Tesla's Tmall flagship store has been retained, it has also entered Douyin and JD.com one after another, but Musk has never been very interested in online car sales. In addition, Tesla has opened an official account on Kuaishou, but has not opened a store.
On the JD.com side, automobiles and related accessories are not its main category. Even on the classification page of the JD.com app homepage, there is no separate entry for automobiles. Before Tesla, leading brands such as Great Wall, Wuling Baojun, Lingzhi, and Buick have opened stores on JD.com, but almost all the best-selling products are test drive reservation services priced below 10 yuan.
So what is the purpose of this cooperation between the two sides, which came almost without any warning?
The Institute of Value Research (ID: jiazhiyanjiusuo) believes that the starting points and demands of Tesla and JD.com may be completely different: the former may be to test the market and user response, and try to increase the sales of surrounding products to provide an additional source of revenue; the latter is for defensive purposes, keeping up with the pace of competitors such as Taobao and Douyin.
From Musk's perspective, although not keen on online car sales, selling peripheral products on e-commerce platforms may also bring new surprises.
In the past, Tesla has indeed produced many popular peripheral products. For example, the satin shorts launched in July 2020, priced at $69.42, sold out quickly, even Musk himself boasted about it on Twitter. In addition, products like the $50 Cyberwhistle launched in December 2021, belt buckles with the Tesla logo priced at $150, and the lightning-bottle packaged tequila priced as high as $270 have also sold out.
Looking at the pricing of these products, it is not difficult to see that Tesla's peripheral products and services are priced on the higher side, catering to a specific group of users. JD.com's higher average order value and reputation for after-sales service undoubtedly align more closely with Tesla's brand temperament compared to platforms like Douyin.
However, for JD.com, selling cars is not as simple as dipping into a new business—especially with platforms like Douyin and Taobao using live streaming e-commerce to aggressively enter the car market, JD.com is undoubtedly facing increased pressure.
Official data released by Douyin indicates that in 2021, the platform's automotive-related video views surged by 318% year-on-year, with the proportion increasing from 14% in 2020 to 25%. Although the 2022 data has not been announced yet, considering Douyin's significant efforts in that year, with events like the 'Car Carnival' to boost interest, it is likely that the viewership of car-related videos on the platform remains high.
For JD.com, missing out on the live streaming trend, they naturally do not want to miss any potential growth opportunities. But it's important to note that automotive e-commerce is not an easy business, with predecessors having faced many painful lessons. JD.com, as well as Taobao and Douyin, all need to face serious challenges.
The two hurdles of automotive e-commerce: offline barriers and profit games
Looking back at the development history, the domestic automotive e-commerce industry did not start late and has had a period of glory.
According to the statistics from Asia Vets Consulting, the period from 2014 to 2019 was a phase of rapid growth in the Chinese auto e-commerce market, primarily manifested in the sharp increase in the number of relevant enterprises, the sustained activity in the financing market, and the improvement in penetration rate. In 2019, the number of Chinese auto e-commerce and related enterprises reached a historical peak of 97,038, a significant increase of 49% from 65,112 in 2018.
The transaction volume of the Chinese auto e-commerce market also surpassed the trillion mark for the first time in 2019, reaching 1.05 trillion, with a year-on-year growth rate of 22.24%, nearly 16 percentage points higher than 2018. Thanks to the massive investment and traction on corresponding platforms, the user base of auto e-commerce also soared during this period. Statistics from Autohome show that in 2019, the user base of Chinese auto e-commerce reached 143 million people, a 33.64% year-on-year growth.
During this period of explosive growth, not only specialized e-commerce platforms like Taobao and jd.com escalated their auto business, even traditional car manufacturers started venturing into building their own e-commerce channels. By the end of 2019, major car manufacturers like Changan, GAC, Dongfeng, and SAIC Motor Corporation had announced their entry into the e-commerce race. SAIC Motor Corporation, with the most rapid action, invested 2 billion yuan to launch Che Xiang Wang, with models from nine major subsidiary brands including Roewe, SAIC Volkswagen, and SAIC GM Chevrolet all fully available online.
In those years, the market was indeed flourishing and seemed poised for great heights. However, the auto e-commerce industry did not ride this momentum to greater success but rather rapidly declined after 2019.
Data shows that in 2020, the number of related auto e-commerce enterprises in China sharply decreased to 77,291, experiencing negative growth for the first time since records began. Although the transaction volume is still growing, the growth rate drastically reduced to 7.2%, and further declined to 6.89% in 2021.
In fact, even the previously popular trend of live-streaming sales failed to reignite the auto e-commerce sector in the past two years. Data from iMedia Research shows that in the first quarter of 2020, sales of auto accessories/parts on Taobao and Tmall plummeted by 57% year-on-year, with total vehicle sales for the entire quarter hitting rock bottom.
The situation is slightly better on Douyin (TikTok), but it also faces its own challenges. Statistics from ChnMom reveal that by the first half of last year, sales of auto-related products on Douyin surged by 1802% year-on-year. Currently, there are over 0.02 million auto-related products on Douyin, but the majority of these are directed towards placing orders through live streaming or product recommendation videos and then proceeding to the corresponding auto stores for verification.
According to Value Research Institute (ID: jiazhiyanjiusuo), the reason for the rapid decline of auto e-commerce within just a few years is directly related to inherent flaws in its business model: the experiential aspect brought by test drives is incomparable to online vehicle purchasing channels, the platforms and car manufacturers have failed to integrate the service chain, making post-sales maintenance, insurance, and other aspects chaotic and lagging behind. Sales models like Douyin's online ordering, offline verification essentially still remain limited to group purchases, visiting stores, without truly delving into the automotive industry internals.
In addition, the interests of e-commerce platforms, car companies, and offline stores have added some uncertainties to the development of the automotive e-commerce industry.
Chang Jingxiang, the investment director of Zhongjun Capital, once said that e-commerce platforms cannot do well in the automotive business with just traffic, and they are very likely to conflict with offline stores. For example, the self-built offline channel method attempted by platforms like Yiche and Yimao has failed. Autohome and Yiche, which have high verticality and user stickiness, have also considered e-commerce business, but often can only obtain unsold models from some manufacturers.
In the end, if e-commerce platforms want to do well in the automotive business, they need to solve two difficult problems: first, breaking through the barriers between online and offline, and improving the online shopping experience; second, mutually beneficial cooperation with car manufacturers and their offline distribution channels instead of competing for business.
For how to solve these two problems, many e-commerce platforms currently do not have a good solution. However, JD.com has recently come up with a shortcut: bypassing the whole vehicle transaction and entering the automotive aftermarket, and building good relationships with car manufacturers, offline dealers, and after-sales teams.
During last year's 618 shopping festival, JD.com provided special traffic support to a large number of car companies and their offline stores. In October last year, JD.com's first national super experience center for automobiles officially opened, marking a new phase of offline development. Although these projects do not currently generate substantial revenue, JD.com's layout in the automotive business is being improved.
In conclusion,
On February 14th, Chen Haifeng, the General Manager of JD.com's Automotive Business Division, participated in the 7th China Automotive Service Chain Development Summit hosted by the AC Automotive Main Board, and explained JD.com's three main layout directions for the automotive business in a public speech: B2C supply chain commodity transactions, car maintenance services, and new energy innovative services.
"JD.com will rely on digitalized supply chain to create an omni-channel, integrated automotive service, and create more benefits for the industry and users."
JD.com's emphasis on the automotive business is beyond doubt, and teaming up with Tesla is just the first step in its comprehensive expansion plan. In the future, we may have the opportunity to see more top car companies join JD.com, and we may also see Tesla and JD.com collaborate to provide more new services/products.
As for whether the automotive e-commerce industry can seize the opportunity to open up new volume, it depends on how long the top e-commerce platforms and car companies can maintain their enthusiasm for investment, as well as whether the corresponding strategies can satisfy consumers. $Tesla (TSLA.US)$ $JD.com (JD.US)$ $Alibaba (BABA.US)$
In those years, the market was indeed flourishing and seemed poised for great heights. However, the auto e-commerce industry did not ride this momentum to greater success but rather rapidly declined after 2019.
Data shows that in 2020, the number of related auto e-commerce enterprises in China sharply decreased to 77,291, experiencing negative growth for the first time since records began. Although the transaction volume is still growing, the growth rate drastically reduced to 7.2%, and further declined to 6.89% in 2021.
In fact, even the previously popular trend of live-streaming sales failed to reignite the auto e-commerce sector in the past two years. Data from iMedia Research shows that in the first quarter of 2020, sales of auto accessories/parts on Taobao and Tmall plummeted by 57% year-on-year, with total vehicle sales for the entire quarter hitting rock bottom.
The situation is slightly better on Douyin (TikTok), but it also faces its own challenges. Statistics from ChnMom reveal that by the first half of last year, sales of auto-related products on Douyin surged by 1802% year-on-year. Currently, there are over 0.02 million auto-related products on Douyin, but the majority of these are directed towards placing orders through live streaming or product recommendation videos and then proceeding to the corresponding auto stores for verification.
According to Value Research Institute (ID: jiazhiyanjiusuo), the reason for the rapid decline of auto e-commerce within just a few years is directly related to inherent flaws in its business model: the experiential aspect brought by test drives is incomparable to online vehicle purchasing channels, the platforms and car manufacturers have failed to integrate the service chain, making post-sales maintenance, insurance, and other aspects chaotic and lagging behind. Sales models like Douyin's online ordering, offline verification essentially still remain limited to group purchases, visiting stores, without truly delving into the automotive industry internals.
In addition, the interests of e-commerce platforms, car companies, and offline stores have added some uncertainties to the development of the automotive e-commerce industry.
Chang Jingxiang, the investment director of Zhongjun Capital, once said that e-commerce platforms cannot do well in the automotive business with just traffic, and they are very likely to conflict with offline stores. For example, the self-built offline channel method attempted by platforms like Yiche and Yimao has failed. Autohome and Yiche, which have high verticality and user stickiness, have also considered e-commerce business, but often can only obtain unsold models from some manufacturers.
In the end, if e-commerce platforms want to do well in the automotive business, they need to solve two difficult problems: first, breaking through the barriers between online and offline, and improving the online shopping experience; second, mutually beneficial cooperation with car manufacturers and their offline distribution channels instead of competing for business.
For how to solve these two problems, many e-commerce platforms currently do not have a good solution. However, JD.com has recently come up with a shortcut: bypassing the whole vehicle transaction and entering the automotive aftermarket, and building good relationships with car manufacturers, offline dealers, and after-sales teams.
During last year's 618 shopping festival, JD.com provided special traffic support to a large number of car companies and their offline stores. In October last year, JD.com's first national super experience center for automobiles officially opened, marking a new phase of offline development. Although these projects do not currently generate substantial revenue, JD.com's layout in the automotive business is being improved.
In conclusion,
On February 14th, Chen Haifeng, the General Manager of JD.com's Automotive Business Division, participated in the 7th China Automotive Service Chain Development Summit hosted by the AC Automotive Main Board, and explained JD.com's three main layout directions for the automotive business in a public speech: B2C supply chain commodity transactions, car maintenance services, and new energy innovative services.
"JD.com will rely on digitalized supply chain to create an omni-channel, integrated automotive service, and create more benefits for the industry and users."
JD.com's emphasis on the automotive business is beyond doubt, and teaming up with Tesla is just the first step in its comprehensive expansion plan. In the future, we may have the opportunity to see more top car companies join JD.com, and we may also see Tesla and JD.com collaborate to provide more new services/products.
As for whether the automotive e-commerce industry can seize the opportunity to open up new volume, it depends on how long the top e-commerce platforms and car companies can maintain their enthusiasm for investment, as well as whether the corresponding strategies can satisfy consumers. $Tesla (TSLA.US)$ $JD.com (JD.US)$ $Alibaba (BABA.US)$
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sTone83 : The same goes for JD... his lower body is already buried in the sand... can't make any big moves...