The initial meeting was when Li Bin came to our house and had dinner with me and Qiangdong. He spent 15 minutes talking about his thoughts on NIO, my husband took 10 seconds to say yes. Zhang Zetian vividly recounted the entire process of JD’s investment in NIO in a conversation with Wang Yizhi. This also let the public know that, in the early days, Liu Qiangdong had already entered the automotive industry as an investor.
Zhang Zetian talks about the entire process of JD’s investment in NIO. This year, JD’s presence in the automotive industry has been increasing. From New Year’s Eve to the Spring Festival, Liu Qiangdong has given cars more than once. From Tesla to his favorite Dongfeng Warrior, to 100 Land Tourers, JD Cars have successfully climbed to the top of the hot search rankings by continuously giving away cars. On March 16, at the China Electric Vehicle 100 People Conference 2024 Senior Forum, BYD Chairman Wang Chuanfu, Huawei Consumer BG CEO Yu Chengdong, NIO CEO Li Bin, Xpeng Motors CEO He Xiaopeng and others made appearances and speeches. Surprisingly, JD, seemingly unrelated to car manufacturing, also appeared at the event. At the event, the head of JD Cars shared JD’s layout in the automotive field systematically. JD also announced a joint brand investment of 500 million yuan to support the “trade-in” of cars. Starting from this year’s Tire Festival, JD will also launch the “tire trade-in” plan in collaboration with various associations and brands. At the same time, on that day, JD also reached a comprehensive strategic cooperation with BYD, sparking attention and discussion in the entire automotive industry. Furthermore, according to media reports, on March 25, Xiaomi CEO Lei Jun posted on his friend circle about “Xiaomi SU7 entering JD”. This update has sparked speculation in the industry about whether Xiaomi cars are collaborating with JD and attempting a similar online sales model as smartphones.
Xiaomi SU7 As Xiaomi’s car delivery date approaches, people have discovered that Xiaomi SU7 accessories are now available on JD.com with delivery within 30 minutes through the JD app. JD, not a car manufacturer, is now attracting more new energy players to cooperate. This move by non-car manufacturers is another track in the automotive industry. How will this business fare?
JD wants to become the “super appliance” of cars. Not linking with cars seems outdated. ByteDance and Tencent are internet companies that want to enter the car industry by integrating resources in smart travel, autonomous driving, and car networking. Others provide car parts, like home appliance giant Midea. Some are selling cars, like Pinduoduo and SF. By 2024, JD’s pace in the car market has accelerated, focusing on both car manufacturing and comprehensive efforts. It can be divided into two aspects. One is sales, including online and offline car sales, as well as car parts. The other is car maintenance, the automotive aftermarket business. According to JD’s statement at the China Electric Vehicle Forum on March 15-17, they will focus on the entire lifecycle of car owners.
JD Auto builds owner lifecycle business system / Source: JD Blackboard JD Group Vice President Miao Qin said: “For the past five or six years, countless people have asked Lao Liu if he wants to make cars. I have also been asking him for the past few years, but we have a deep consensus. JD has always positioned itself as a technology and service company based on the supply chain, so it is very clear that we need to do well in supporting and servicing cars.” As early as 2018, Liu Qiangdong put forward his own views. He believes that in the future, electric cars do not need traditional car dealerships. Entering the era of electric vehicles is like buying a computer – if the motherboard is broken, just replace the motherboard, if the graphics card is broken, just replace the graphics card, if the hard drive is broken, just replace the hard drive. Everything is modular, standardized, and component-based. It sounds like cars on an e-commerce platform are just like large appliances. And for JD, selling appliances is their advantage, right? Lei Jun’s marketing skills once made Liu Qiangdong admire, but in fact, JD is also a talented marketer. Continuous “car delivery” events have quickly opened up traffic for JD Auto’s sales live broadcast room this year. In addition, JD Auto has also launched a “trade-in” service, including aspects such as trading in whole vehicles and tires, trying to attract the lower-tier market. In addition to attracting buyers, JD also wants to quickly expand its “car circle”. Recently, JD announced a strategic cooperation with BYD, focusing on building a comprehensive and all-encompassing marketing and after-sales service system for cars.
京东与比亚迪签署战略合作协议。50%以上车主选择在线购买新能源汽车。小米汽车的在线发行推动了在线订车的新高潮。消费者希望有一站式服务，更方便购车。新能源车企能通过平台了解消费者行为和偏好。京东决心推广这一“超大电器”。
The form of selling cars is cyclical, but also a new era. Has anyone sold cars like this before? Actually, yes. Over 20 years ago, Beijing Yafei Automobile Chain sold small cars in major shopping malls. The head of Beijing Yafei, Guo Jiyuan, used to work in the national reform department and later started this company. He opened Yafei’s direct stores in well-known shopping malls such as Beijing Urban and Rural Trade Center, Beijing Bai Sheng Shopping Center, where Santana, Longfukang, and FAW Jetta were all included. However, at that time, 4S stores were rapidly rising, making Guo Jiyuan’s situation extremely difficult. Guo Jiyuan couldn’t hold on, and a year later, selling small cars in major shopping malls came to an end.
More than 20 years ago, Beijing Yafei Auto Chain sold cars in major shopping malls. Later, President Guo Jiyuan, with the support of Hong Kong capital tycoon Liang Botao, founded the “Xinyuan Auto Life Plaza” outside the Fifth Ring Road in Beijing, providing diverse services with installment payments as the core, but it also ended in failure. Gome and Suning also sold cars this way. In 2017, Gome included cars in its retail product catalog, seen as a major challenge to the traditional 4S dealership system at the time. The future of car e-commerce must be integrated with offline stores to be successful. Former Huachen Auto e-commerce project leader Chen Ran said in 2016. At that time, Chen Ran had joined Gome as the general manager of the automotive business unit, but a year later, Gome’s online car stores began to close down. The form of car sales is actually a cycle. The model that was considered a failure in history is now making a comeback, with the difference being the changed industry environment. The current wave of sales trends, different from traditional 4S dealerships, is brought by Tesla. The prime locations in shopping malls have become sought after by many car brands, including NIO, Xiaopeng, Li Xiang, and WM Motor, all having their own stores in malls.
Beijing Blue Harbor Shopping Center, NIO Space’s NIO Car Experience Store / Image Source: Visual China On one hand, the large flow of people in the mall is suitable for brand exposure. On the other hand, new energy vehicles do not have the traditional sales channels of traditional vehicles. Their products require less maintenance and repair services compared to fuel vehicles. At the same time, they have also integrated their online and offline channels. According to data from the China Association of Automobile Manufacturers, in 2023, the production and sales of new energy vehicles will reach 9.587 million and 9.495 million respectively, with year-on-year growth of 35.8% and 37.9%, and a market share of 31.6%. Looking back, in 2014, Musk visited China for the first time, and the first batch of Chinese users officially received the keys to the Model S from him. It was also in the same year, 2014, that Li Bin founded NIO, Xiaopeng Motors was born, and a new force in Chinese car manufacturing emerged rapidly, witnessing astonishing growth. In the span of ten years, the automotive market has reached a critical point. Tesla and BYD are wielding the “price scythe” to compete for the top spot in global electric vehicle sales. Traditional car companies are accelerating their transition to new energy, engaging in a pure electric competition amid risks and pains. Lei Jun declared that he is willing to stake all his life’s achievements and reputation on this last venture. Faced with such a hot and innovative market, JD naturally wants to “recreate another JD”, with more favorable conditions than the predecessors who failed in car sales.
Scale exceeds trillions According to JD, JD Auto not only brings peace of mind to consumers, but also saves money. JD Auto connects various links in the industrial chain, giving JD the opportunity to gain bargaining power in price wars and obtain more benefits from brands. Michel Foucault, a French philosopher, once said, “Discourse means that a social group spreads its meaning in society based on certain norms, establishes its social status, and is recognized by other groups.” From an industrial perspective, discourse means mastering the “rules of the game” in the industry. Data shows that JD has nearly 600 million massive user resources, including over 200 million potential car owners and over 7 million new energy users. JD Car Care has opened over 1500 high-standard stores in 29 provinces and over 160 cities nationwide, with over 40,000 cooperative stores and over 45,000 certified technicians. At the same time, JD is also vigorously expanding offline, accelerating its expansion. JD Auto New Energy Experience Centers have been opened in Shenyang, Shijiazhuang, Dongguan, Wuhan, Ningbo, and other places, offering comprehensive services including car displays, test drives, services, and retail.
Wuhan, JD Automobile New Energy Experience Center/Photo Source: Visual China The competition pressure faced by this track is not small. Besides new car sales, the automotive aftermarket has always been attractive. The automotive aftermarket is a market worth over trillions. Not only JD, other internet giants have also entered the automotive e-commerce industry, such as Alibaba and ByteDance. In early March 2024, Tmall Car Care launched a new “Big Cycle” strategy, ByteDance’s “Car King” also increased its investment in the automotive aftermarket this year, launching “Car Care”. Meituan has also established an independent automotive industry operations team. Under the siege of giants, Tuhu Car Care, the market leader, has already felt the crisis looming.
Tuhu sued JD in January for launching a product that affected its reputation, seeking 5 million yuan in compensation. Meanwhile, Cluster Car Treasure filed for bankruptcy and left in tears. Traditional auto parts supply chain companies are facing challenges from the transition to new energy. Internet giants with strong financial power are intensifying competition in the industry. It’s a battle to see who can withstand the competition and successfully monetize traffic. In the intense “car maintenance war,” small business owners must find new ways to survive.