Tesla JD sells cars: Is it a gimmick, or is it a gimmick?
Musk, whose brain is different from that of ordinary people, always seems to bring us some fresh ideas. After asking Twitter engineers to increase the priority of their tweets by 1,000 times, Tesla also recently launched an interesting new initiative: expanding the layout of e-commerce channels.
On February 14, Tesla's JD flagship store officially announced its opening. It claims to have launched 22 categories and more than 200 products. Although cars have not been sold at JD yet, everything is possible in the future with Musk's always aggressive and pioneering style.
Of course, Tesla's entry into JD hasn't created much value or influence. Consumers and peers are watching: the two giants suddenly joined forces. What drugs are actually being sold in the gourd? Does Tesla really want to treat peripheral products as a new financial path? Will JD also take this opportunity to break into the automobile market?
With these questions in mind, the Institute of Value Research (ID: jiazhiyanjiusuo) takes this opportunity to review the miserable industry of automobile e-commerce, as well as the calculations behind Tesla and JD joining hands.
Of course, Tesla's entry into JD hasn't created much value or influence. Consumers and peers are watching: the two giants suddenly joined forces. What drugs are actually being sold in the gourd? Does Tesla really want to treat peripheral products as a new financial path? Will JD also take this opportunity to break into the automobile market?
With these questions in mind, the Institute of Value Research (ID: jiazhiyanjiusuo) takes this opportunity to review the miserable industry of automobile e-commerce, as well as the calculations behind Tesla and JD joining hands.
Tesla's flagship store enters JD and sells everything except cars
After the opening of the Tesla JD flagship store, the Institute of Value Research (ID: jiazhiyanjiusuo) had the first login experience.
Currently, the store has a total of 532,000 fans. Having accumulated such a high number of fans in just two days, it can be seen that Tesla is very popular. Overall, however, there are still quite a few problems with the store.
First, look at the type and quantity of products listed, and the store page settings.
When I opened the homepage of Tesla's JD flagship store, the top four categories were charging products, premium accessories, peripheral products, and boutique apparel. Scrolling in the recommendation column at the top of the page are three products: a home charging service pack, a remote key, and a Tesla Year of the Rabbit hoodie. I believe these are the products currently being promoted by Tesla.
After the opening of the Tesla JD flagship store, the Institute of Value Research (ID: jiazhiyanjiusuo) had the first login experience.
Currently, the store has a total of 532,000 fans. Having accumulated such a high number of fans in just two days, it can be seen that Tesla is very popular. Overall, however, there are still quite a few problems with the store.
First, look at the type and quantity of products listed, and the store page settings.
When I opened the homepage of Tesla's JD flagship store, the top four categories were charging products, premium accessories, peripheral products, and boutique apparel. Scrolling in the recommendation column at the top of the page are three products: a home charging service pack, a remote key, and a Tesla Year of the Rabbit hoodie. I believe these are the products currently being promoted by Tesla.
If you take a closer look, charging products/gift packs have limited SKUs but the highest pricing is the key to increasing the store's gross profit. The Value Research Institute (ID: jiazhiyanjiusuo) observed that the third-generation Tesla charging station, which costs 7,200 yuan, has received 100+ after-sales reviews in just two days after launch, making it the highest-selling charging product.
In contrast, sales of accessories, peripheral products, and apparel, which should have taken the thin and lucrative sales route, were not as high as expected. Among them, most of the products in the boutique apparel and peripheral boutique categories had zero after-sales reviews. In the preferred accessories category, only a few products, such as the Tesla Model Y fender (for special front cars) and the Tesla Model 3/Y smart remote key, had single-digit reviews.
It can be seen from this that Tesla and JD have not given too high profile publicity about this entry; they are still in the stage of testing the waters. Tesla owners also need time to develop online consumption habits.
In contrast, sales of accessories, peripheral products, and apparel, which should have taken the thin and lucrative sales route, were not as high as expected. Among them, most of the products in the boutique apparel and peripheral boutique categories had zero after-sales reviews. In the preferred accessories category, only a few products, such as the Tesla Model Y fender (for special front cars) and the Tesla Model 3/Y smart remote key, had single-digit reviews.
It can be seen from this that Tesla and JD have not given too high profile publicity about this entry; they are still in the stage of testing the waters. Tesla owners also need time to develop online consumption habits.
Second, let's take a look at new promotion activities such as store coupons. As can be seen from the strength of the discount, Tesla and JD do not place much importance on user conversion and retention at this stage, and the activities launched are also quite limited.
After launch, the store only officially launched a 201 yuan third-generation home charging service package discount voucher that can be received for a limited time from February 13-15, limited to 20,000 copies. At the time of publication, the event period has passed, and the relevant information has been removed from the mobile app, but the event poster is still on the website. It is speculated from this that store operations are still not on track, and there are still some flaws in daily management.
After launch, the store only officially launched a 201 yuan third-generation home charging service package discount voucher that can be received for a limited time from February 13-15, limited to 20,000 copies. At the time of publication, the event period has passed, and the relevant information has been removed from the mobile app, but the event poster is still on the website. It is speculated from this that store operations are still not on track, and there are still some flaws in daily management.
Finally, let's take a look at the status of supporting services such as after-sales and on-site installation.
Among the SKUs that have been launched, only charging products require on-site installation. According to observations, products/services such as the Tesla Charging Station Home Charging Installation Kit and the Home Charging Station Transfer Station all provide on-site installation and after-sales service. According to customer service, the order process for this type of product is to schedule a survey - one-on-one communication with manual customer service within 24 hours - on-site installation and debugging according to the appointment time.
Judging from the above process, there is no difference between the charging products/services of the JD flagship store and Tesla's offline stores and own channels. They can meet the basic needs of users, but they are not necessarily more convenient.
In summary, after all, Tesla's JD flagship store has just been launched. It is still in its infancy, and the products and services need to be improved. Plus, there wasn't much publicity or even a bit hasty before the store went live, so there's no need to expect too much volume in the short term. However, the Tesla and JD operation teams have put a lot of thought into activities such as providing 0 yuan to join.
Of course, when Tesla and JD join forces, it's definitely not just as simple as making a few small sums of money or making a gimmick. The small Tesla JD flagship store probably carries the larger ambitions of the two giants.
Tesla, which doesn't worry about selling and JD, which is not out of stock, each has a small calculation
Every cooperation reached in the commercial community must take into account the demands of both partners, and Tesla and JD are no exception. But the problem is, at first glance, Tesla and JD don't need each other that much.
On the one hand, Tesla doesn't worry about selling; offline channels have always been very mixed up. Moreover, like other car brands, Tesla is not very dependent on e-commerce channels, and offline stores continue to expand.
Financial reports show that as of the end of December last year, the number of Tesla offline stores in China increased by 10.6% compared to the beginning of the year. Newly opened stores are mainly located in new first-tier cities. Instead, many stores in central Beijing, Shanghai and other places have been closed one after another throughout the year, and it seems that they are planning to move to a location with lower rents.
On the other hand, Tesla had already set up multiple e-commerce platforms before, and JD had already missed the chance to win the lottery. Moreover, there are many SKUs for automotive peripheral products at JD Station, and demand for Tesla is not that urgent.
As early as 2014, Tesla entered the Tmall Mall, and its investment is greater than it is today — even including the vehicle sales business. However, Musk soon stopped this plan and instead fully expanded offline, with the goal of consolidating the closed loop between R&D, production, sales, and after-sales.
Although Tesla's Tmall flagship store has been retained, and now it has entered Douyin and JD, Musk has never had much interest in online car sales. Furthermore, Tesla has also opened an official account with Kuaishou, but it has not opened a store.
On the JD side, automobiles and related accessories are not its main category. Even on the category page on the JD app homepage, there is no separate entrance for cars. Before Tesla, top brands such as Great Wall, Wuling Baojun, Zero Run, and GM Buick all opened stores in JD, but the best-selling products were almost no exceptions; they were all test drive reservation services that cost less than 10 yuan.
So what is the intention of this cooperation between the two sides, which has almost no warning?
The Value Research Institute (ID: jiazhiyanjiusuo) believes that the starting point and appeal of Tesla and JD may be completely different: the former is probably to test the market, user reactions, and try to boost sales of peripheral products; the latter is defensively needed to keep up with competitors such as Taobao and Douyin.
From Musk's point of view, although I'm not fond of online car sales, selling peripheral products on e-commerce platforms may also bring new surprises.
In the past, Tesla has indeed produced quite a few popular peripheral products. For example, the silk shorts that went on sale in July 2020 were wiped out at a price of $69.42, and even Musk himself tweeted to show them off. In addition, the $50 Cyberwhistle, which went on sale in December 2021, the $150 belt buckle, and the Tesla logo, and Lightning bottled tequila, which sold as high as $270, were also sold out.
It is easy to see from the pricing of these products that Tesla's peripheral products and services are overpriced, and they also correspond to a specific group of users. However, JD's high customer unit price and after-sales service reputation are undoubtedly closer to Tesla's brand tone than platforms such as Douyin.
However, for JD, automobiles are not as simple as trying it out — especially as platforms such as Douyin and Taobao use live e-commerce to enter the automobile market in a big way, the pressure on JD can be described as doubling.
According to official data released by Douyin, the number of automobile-related videos viewed on the platform soared 318% year-on-year in 2021, and the share increased from 14% in 2020 to 25%. Although data for 2022 has not yet been released, considering that Douyin has consumed a lot of manpower and material resources this year, and that holding events such as the “Car Carnival” has boosted popularity, it is likely that the number of views of automotive videos on the site will not be low.
JD, which has missed out on live streaming, is naturally unwilling to miss any more potential growth opportunities. However, you need to know that the automobile e-commerce business is not easy to do, and the previous generation has left behind quite a few painful lessons. Whether it's JD, Taobao, or Douyin, they all have to face severe tests.
The two hurdles of automobile e-commerce: offline barriers and interest games
Looking back at the development history, the domestic auto e-commerce industry started not too late; it also had a glorious period.
According to statistics from Intelligent Research Consulting, 2014-2019 was a period of rapid growth in China's automotive e-commerce market, mainly reflected in the sharp rise in the number of related companies, the continued activity of the financing market, and the increase in penetration rate. Among them, the number of auto e-commerce and related enterprises in China reached a historical peak of 97038 in 2019, a sharp increase of 49% over 65112 in 2018.
The transaction scale of China's automotive e-commerce market also broke through the trillion mark for the first time in 2019, reaching 1.05 trillion yuan. The 22.24% year-on-year growth rate was nearly 16 percentage points higher than in 2018. Thanks to the large-scale launch and distribution of corresponding platforms, the number of automotive e-commerce users is also rising steadily at this stage. According to statistics from Electric Digital Data Bao, the number of auto e-commerce users in China reached 143 million in 2019, an increase of 33.64% over the previous year.
Among the SKUs that have been launched, only charging products require on-site installation. According to observations, products/services such as the Tesla Charging Station Home Charging Installation Kit and the Home Charging Station Transfer Station all provide on-site installation and after-sales service. According to customer service, the order process for this type of product is to schedule a survey - one-on-one communication with manual customer service within 24 hours - on-site installation and debugging according to the appointment time.
Judging from the above process, there is no difference between the charging products/services of the JD flagship store and Tesla's offline stores and own channels. They can meet the basic needs of users, but they are not necessarily more convenient.
In summary, after all, Tesla's JD flagship store has just been launched. It is still in its infancy, and the products and services need to be improved. Plus, there wasn't much publicity or even a bit hasty before the store went live, so there's no need to expect too much volume in the short term. However, the Tesla and JD operation teams have put a lot of thought into activities such as providing 0 yuan to join.
Of course, when Tesla and JD join forces, it's definitely not just as simple as making a few small sums of money or making a gimmick. The small Tesla JD flagship store probably carries the larger ambitions of the two giants.
Tesla, which doesn't worry about selling and JD, which is not out of stock, each has a small calculation
Every cooperation reached in the commercial community must take into account the demands of both partners, and Tesla and JD are no exception. But the problem is, at first glance, Tesla and JD don't need each other that much.
On the one hand, Tesla doesn't worry about selling; offline channels have always been very mixed up. Moreover, like other car brands, Tesla is not very dependent on e-commerce channels, and offline stores continue to expand.
Financial reports show that as of the end of December last year, the number of Tesla offline stores in China increased by 10.6% compared to the beginning of the year. Newly opened stores are mainly located in new first-tier cities. Instead, many stores in central Beijing, Shanghai and other places have been closed one after another throughout the year, and it seems that they are planning to move to a location with lower rents.
On the other hand, Tesla had already set up multiple e-commerce platforms before, and JD had already missed the chance to win the lottery. Moreover, there are many SKUs for automotive peripheral products at JD Station, and demand for Tesla is not that urgent.
As early as 2014, Tesla entered the Tmall Mall, and its investment is greater than it is today — even including the vehicle sales business. However, Musk soon stopped this plan and instead fully expanded offline, with the goal of consolidating the closed loop between R&D, production, sales, and after-sales.
Although Tesla's Tmall flagship store has been retained, and now it has entered Douyin and JD, Musk has never had much interest in online car sales. Furthermore, Tesla has also opened an official account with Kuaishou, but it has not opened a store.
On the JD side, automobiles and related accessories are not its main category. Even on the category page on the JD app homepage, there is no separate entrance for cars. Before Tesla, top brands such as Great Wall, Wuling Baojun, Zero Run, and GM Buick all opened stores in JD, but the best-selling products were almost no exceptions; they were all test drive reservation services that cost less than 10 yuan.
So what is the intention of this cooperation between the two sides, which has almost no warning?
The Value Research Institute (ID: jiazhiyanjiusuo) believes that the starting point and appeal of Tesla and JD may be completely different: the former is probably to test the market, user reactions, and try to boost sales of peripheral products; the latter is defensively needed to keep up with competitors such as Taobao and Douyin.
From Musk's point of view, although I'm not fond of online car sales, selling peripheral products on e-commerce platforms may also bring new surprises.
In the past, Tesla has indeed produced quite a few popular peripheral products. For example, the silk shorts that went on sale in July 2020 were wiped out at a price of $69.42, and even Musk himself tweeted to show them off. In addition, the $50 Cyberwhistle, which went on sale in December 2021, the $150 belt buckle, and the Tesla logo, and Lightning bottled tequila, which sold as high as $270, were also sold out.
It is easy to see from the pricing of these products that Tesla's peripheral products and services are overpriced, and they also correspond to a specific group of users. However, JD's high customer unit price and after-sales service reputation are undoubtedly closer to Tesla's brand tone than platforms such as Douyin.
However, for JD, automobiles are not as simple as trying it out — especially as platforms such as Douyin and Taobao use live e-commerce to enter the automobile market in a big way, the pressure on JD can be described as doubling.
According to official data released by Douyin, the number of automobile-related videos viewed on the platform soared 318% year-on-year in 2021, and the share increased from 14% in 2020 to 25%. Although data for 2022 has not yet been released, considering that Douyin has consumed a lot of manpower and material resources this year, and that holding events such as the “Car Carnival” has boosted popularity, it is likely that the number of views of automotive videos on the site will not be low.
JD, which has missed out on live streaming, is naturally unwilling to miss any more potential growth opportunities. However, you need to know that the automobile e-commerce business is not easy to do, and the previous generation has left behind quite a few painful lessons. Whether it's JD, Taobao, or Douyin, they all have to face severe tests.
The two hurdles of automobile e-commerce: offline barriers and interest games
Looking back at the development history, the domestic auto e-commerce industry started not too late; it also had a glorious period.
According to statistics from Intelligent Research Consulting, 2014-2019 was a period of rapid growth in China's automotive e-commerce market, mainly reflected in the sharp rise in the number of related companies, the continued activity of the financing market, and the increase in penetration rate. Among them, the number of auto e-commerce and related enterprises in China reached a historical peak of 97038 in 2019, a sharp increase of 49% over 65112 in 2018.
The transaction scale of China's automotive e-commerce market also broke through the trillion mark for the first time in 2019, reaching 1.05 trillion yuan. The 22.24% year-on-year growth rate was nearly 16 percentage points higher than in 2018. Thanks to the large-scale launch and distribution of corresponding platforms, the number of automotive e-commerce users is also rising steadily at this stage. According to statistics from Electric Digital Data Bao, the number of auto e-commerce users in China reached 143 million in 2019, an increase of 33.64% over the previous year.
During these turbulent years, not only did professional e-commerce platforms such as Taobao and Jingdong increase their car business, but even car companies have begun to build their own e-commerce channels. By the end of 2019, leading domestic car companies such as Changan, Guangzhou Automobile, Dongfeng, and SAIC Motor had announced their entry into the e-commerce circuit. Among them, SAIC Motor Group, which is moving the fastest, invested 200 million yuan to launch the Car Enjoy Network, and all nine major sub-brands, including Roewe, SAIC Volkswagen, and SAIC-GM Chevrolet, went online.
In those few years, the market can be described as booming, and it seems like it will soar to the sky. However, the automotive e-commerce industry did not take advantage of this momentum; instead, it rapidly declined after 2019.
According to the data, the number of auto e-commerce related companies in China dropped sharply to 77,291 in 2020, showing negative growth for the first time since statistics were available. Although the volume of transactions is still growing, the growth rate has shrunk sharply from 7.2% and declined further to 6.89% in 2021.
In fact, even the amazing live streaming of the past two years has not been able to reignite auto e-commerce. Statistics from Ai Media Consulting show that in the first quarter of 2020, sales of Taobao and Tmall auto supplies/accessories plummeted 57% year on year, and vehicle sales directly dropped to zero throughout the quarter.
The situation on Douyin is slightly better, but it also has its own issues. According to statistics from Mama Cicada, as of the first half of last year, sales of Douyin automobile-related products skyrocketed 1802% year over year. Currently, the number of automobile-related products on the Douyin site exceeds 20,000, but the vast majority of them guide users to place orders through live broadcasts, delivery videos, etc., and then go to the corresponding car store to write off.
According to the Institute of Value Research (ID: jiazhiyanjiusuo), the reason why automobile e-commerce has gone from prosperity to decline in just a few years is directly related to model flaws: the sense of experience brought by test driving is unmatched by online car purchase channels. The failure of platforms and car companies to open up the service chain has also made after-sales maintenance and insurance processes chaotic and lagging behind. The sales model of online orders and offline write-offs, such as Douyin, is essentially still limited to group purchases and in-store consumption channels, and has not really penetrated into the automobile industry.
Furthermore, the game of interests between e-commerce platforms, car companies, and offline stores has also added some uncertainties to the development of the automotive e-commerce industry.
Chang Jingyi, director of Zhongjun Capital Investment, once said that e-commerce platforms can't do a good job in the car business if they have traffic alone, and they are likely to clash with offline stores. For example, if you want to buy a car, try to build your own offline channels, etc., and they have failed. Platforms such as Auto Home and Easy Car, which are highly vertical and have no low user stickiness, have also planned e-commerce businesses, but often only get slow-selling models from some manufacturers.
At the end of the day, if e-commerce platforms want to do a good job in the automobile business, they need to solve two problems: one is to open up online and offline barriers to improve the online shopping experience; the second is to mutually benefit car companies and their offline distribution channels, rather than robbing each other of their businesses.
As for how to solve these two problems, e-commerce platforms don't have a very good solution for the time being. Recently, however, JD has come up with a shortcut: bypass vehicle transactions first, enter the automotive aftermarket, and establish good relationships with car companies, offline dealers, and after-sales teams.
During the 618 period last year, JD provided special traffic support to a large number of car companies and their offline stores. In October of last year, JD Auto also officially opened its first super experience center in the country, entering a new stage of offline transformation. Although there are no substantial benefits from these projects yet, at least JD's layout for the automobile business is being improved.
Write at the end
On February 14, Chen Haifeng, general manager of JD Auto Division, attended the 7th China Auto Service Chain Development Summit by AC Auto Motherboard and explained in a public statement the three main layout directions of JD's automobile business: B2C supply chain commodity trading, car maintenance services, and new energy innovation services.
“JD will rely on the digital intelligence supply chain to create omni-channel and integrated automotive services to create more benefits for the industry and users.”
There is no doubt that JD attaches importance to the automobile business; teaming up with Tesla is only the first step in its comprehensive expansion plan. Next, we may have an opportunity to see more leading car companies join JD's arms, and we may also see Tesla and JD join hands to provide more new services/products.
As to whether the automotive e-commerce industry can take the opportunity to open up new volume, it depends on how long the enthusiasm of these leading e-commerce platforms and car companies can last, and whether the corresponding gameplay can satisfy consumers. $Tesla(TSLA.US$ $JD.com(JD.US$ $Alibaba(BABA.US$
In those few years, the market can be described as booming, and it seems like it will soar to the sky. However, the automotive e-commerce industry did not take advantage of this momentum; instead, it rapidly declined after 2019.
According to the data, the number of auto e-commerce related companies in China dropped sharply to 77,291 in 2020, showing negative growth for the first time since statistics were available. Although the volume of transactions is still growing, the growth rate has shrunk sharply from 7.2% and declined further to 6.89% in 2021.
In fact, even the amazing live streaming of the past two years has not been able to reignite auto e-commerce. Statistics from Ai Media Consulting show that in the first quarter of 2020, sales of Taobao and Tmall auto supplies/accessories plummeted 57% year on year, and vehicle sales directly dropped to zero throughout the quarter.
The situation on Douyin is slightly better, but it also has its own issues. According to statistics from Mama Cicada, as of the first half of last year, sales of Douyin automobile-related products skyrocketed 1802% year over year. Currently, the number of automobile-related products on the Douyin site exceeds 20,000, but the vast majority of them guide users to place orders through live broadcasts, delivery videos, etc., and then go to the corresponding car store to write off.
According to the Institute of Value Research (ID: jiazhiyanjiusuo), the reason why automobile e-commerce has gone from prosperity to decline in just a few years is directly related to model flaws: the sense of experience brought by test driving is unmatched by online car purchase channels. The failure of platforms and car companies to open up the service chain has also made after-sales maintenance and insurance processes chaotic and lagging behind. The sales model of online orders and offline write-offs, such as Douyin, is essentially still limited to group purchases and in-store consumption channels, and has not really penetrated into the automobile industry.
Furthermore, the game of interests between e-commerce platforms, car companies, and offline stores has also added some uncertainties to the development of the automotive e-commerce industry.
Chang Jingyi, director of Zhongjun Capital Investment, once said that e-commerce platforms can't do a good job in the car business if they have traffic alone, and they are likely to clash with offline stores. For example, if you want to buy a car, try to build your own offline channels, etc., and they have failed. Platforms such as Auto Home and Easy Car, which are highly vertical and have no low user stickiness, have also planned e-commerce businesses, but often only get slow-selling models from some manufacturers.
At the end of the day, if e-commerce platforms want to do a good job in the automobile business, they need to solve two problems: one is to open up online and offline barriers to improve the online shopping experience; the second is to mutually benefit car companies and their offline distribution channels, rather than robbing each other of their businesses.
As for how to solve these two problems, e-commerce platforms don't have a very good solution for the time being. Recently, however, JD has come up with a shortcut: bypass vehicle transactions first, enter the automotive aftermarket, and establish good relationships with car companies, offline dealers, and after-sales teams.
During the 618 period last year, JD provided special traffic support to a large number of car companies and their offline stores. In October of last year, JD Auto also officially opened its first super experience center in the country, entering a new stage of offline transformation. Although there are no substantial benefits from these projects yet, at least JD's layout for the automobile business is being improved.
Write at the end
On February 14, Chen Haifeng, general manager of JD Auto Division, attended the 7th China Auto Service Chain Development Summit by AC Auto Motherboard and explained in a public statement the three main layout directions of JD's automobile business: B2C supply chain commodity trading, car maintenance services, and new energy innovation services.
“JD will rely on the digital intelligence supply chain to create omni-channel and integrated automotive services to create more benefits for the industry and users.”
There is no doubt that JD attaches importance to the automobile business; teaming up with Tesla is only the first step in its comprehensive expansion plan. Next, we may have an opportunity to see more leading car companies join JD's arms, and we may also see Tesla and JD join hands to provide more new services/products.
As to whether the automotive e-commerce industry can take the opportunity to open up new volume, it depends on how long the enthusiasm of these leading e-commerce platforms and car companies can last, and whether the corresponding gameplay 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...