Kuaishou Auto War

Original link: https://www.latepost.com/news/dj_detail?id=1850

In the first half of this year, domestic car sales have recovered amid the sharp price cuts by car companies, and the wholesale sales of passenger cars increased to 11.066 million units year-on-year. One of the costs of growth is the profitability of automakers.

New brands in the process of expansion and traditional car companies in the transition period have invested resources in marketing, channel construction and continuous R&D investment, so that the net profit attributable to the parent of the entire industry after excluding BYD fell by 18.5%.

Car companies that are catching up will continue to invest, including Nezha and GAC Aian, which are making further efforts to high-end brands, as well as Geely and Changan, which continue to release fuel models with more competitive prices and products. And those who lead will not slack off. Wang Chuanfu, chairman of BYD, warned the market in June that the industry will enter the knockout round, and the window of opportunity is only 3 to 5 years.

Under the influence of factors such as population structure and residents’ income, it is difficult for China’s auto market to have the opportunity of previous exponential growth. However, limited by the industry’s asset-heavy and cyclical characteristics, the technology route changes rapidly, capital expenditures are huge, and price wars often break out. In the century-long history of the auto industry, the auto companies that have survived to this day are the lucky few.

In addition to paying attention to technological innovation, supply chain management and capital operation as always, successful car companies also need to constantly understand the market and customer needs, so as to satisfy consumers’ car needs to the greatest extent.

Last month, Kuaishou held the annual auto summit in Chengdu, where it released for the first time an integrated product-efficiency-transportation solution for the auto industry. It also launched a vertical model for the auto industry and a position management product “Tan Che Tong”, focusing on solving the problem of placement accuracy and matrix account management for auto companies. , Lead flow, data precipitation and other issues. Help car companies approach and understand users, and help users find suitable products.

According to Kuaishou, its auto industry vertical model has identified 170 million users with real car purchase intentions, which is equivalent to nearly half of Kuaishou’s average daily active users. The car companies that were the first to cooperate with Kuaishou have already reaped dividends. For example, Chery has achieved a premium of more than ten times when operating in Kuaishou.

Kuaishou Auto War

In the first half of 2023, sales of automakers are generally under pressure. More than 40 brands have participated in this war through price cuts, subsidies, and terminal profit sharing, covering hundreds of models such as pure electric, hybrid, and fuel.

The price war has blurred the price bands generalized by independent, joint venture, imported or A-class, B-class, C-class labels in the past: 160,000 yuan for Infiniti, 230,000 yuan for BMW pure electric cars, 120,000 yuan for C-class cars .

Consumers have more choices and price ranges in choosing cars, and it is more confusing; car companies are also eager to know the customer groups that best match the selling points of their products. It is precisely based on these changes in the industry that Kuaishou has upgraded its automotive business line, from undertaking vertical advertising and consuming traffic in the past, to becoming one of the platforms that help auto companies realize “cars find people”.

Kuaishou has subdivided and vertical databases for almost every car company in its car vertical model, and some car companies have further model databases, covering not only consumer gender, age, region, city level, education, income, occupation In addition to basic tags such as brand content and user data generated by advertising, the accuracy of the performance model will be further improved, thereby helping to reduce customer placement costs.

Liu Xiao, vice president of Kuaishou Magnetic Engine and head of the automotive business, told LatePost that the current cost of the entire lead is about 25%-30% lower than before. In response to the brand narrative that car companies urgently need to build, Kuaishou has established a “position management” service team to help car companies manage their own accounts and talents.

Today, all car companies are fighting with their backs. They are not only facing changes in technology and product logic, but also changes in the consumption characteristics of the new generation of users. It will be difficult to deal with this change. The position management proposed by Kuaishou is precisely to hope that car companies will operate on Kuaishou to “face to users directly and establish user relationships”.

However, car companies often face a problem when making accounts. They are not professional enough and do not know what content users like. Especially in new tier cities, they rely more on the dealer network and it is difficult to truly understand user preferences. The position management service team can provide Guidance accordingly.

The Kuaishou position management service team stated that it will guide customers on the creation of works and work management based on the logic of Kuaishou’s content push algorithm; at the same time, Kuaishou’s own AIGC, as a creative assistant, can effectively reduce time and cost for car companies; in addition There will be more service assistance to help accounts quickly achieve cold activation and revitalization of content.

In addition, for the clues that the brand failed to convert successfully, Kuaishou’s position management product “Tanchetong” can also send the information of the clues that are marked as invalid to Kuaishou again, start monitoring the user again, and follow up their feedback. Car purchase intention, so as to analyze whether the customer has temporarily shelved the car purchase plan, or has a higher intention for competing products.

Users learn about today’s auto market through anchors and short videos, and Kuaishou filters, analyzes and transmits the data to car companies, and car companies then provide targeted services to the most suitable consumers, so as to be one step faster than others in the melee.

According to the data provided by Kuaishou, in the past 6 months, Kuaishou has operated the top five car companies, with leads increasing by more than 240% and brand exposure increasing by 47%.

In addition to digging deep into the traditional advantageous market, car companies also hope to obtain more incremental markets through innovative marketing. The third- and fourth-tier cities that used to rely mainly on second-tier dealers have become targets.

Through the analysis of the data, Kuaishou also found that fuel vehicles can compete with new energy vehicles in the third-tier cities and below. In third-tier cities, gasoline vehicles account for about 55% of sales. However, the share advantage of fuel vehicles is increasing. Was quickly approached by electric vehicles.

Li Xiang, chairman and CEO of Ideal Auto, said that the third- and fourth-tier cities are the focus of future expansion, and the sales and service network will cover almost all fourth-tier cities in the next 2-3 years. He Xiaopeng, chairman of Xiaopeng Motors, said that more dealers will be introduced in the third and fourth tiers. And Weilai has also accelerated the pace of opening stores in third- and fourth-tier cities, and made test drive calls to BBA car owners.

These areas are also advantageous areas for traditional self-owned brands such as Dongfeng, Changan, Geely, and Chery, with a complete distribution network and strong brand influence. Moreover, local car owners mainly drive fuel vehicles. According to data from Changjiang Securities, among the main sales models in third- and fourth-tier cities, 17 of the top 20 models are pure fuel vehicles. The consumption habit of electric vehicles needs to be cultivated from scratch.

The war has begun.

“New Line” Opportunities

In the fixed Internet context, when it comes to third-tier, fourth-tier and fifth-tier cities, young people in small towns, and outside the Fifth Ring Road, the most bundled tags are Pinduoduo, OPPO, vivo, Xiaomi, and cost-effectiveness. Putting aside these inherent impressions, the new line economy is actually far more complicated than the imagination of the Internet.

Consumers in China’s third-tier cities and below account for more than 70% of the country’s total, and 59% of the country’s GDP. At the same time, third-tier cities and below cities also contribute two-thirds of China’s economic growth. Even Starbucks is expanding at an average rate of 9 hours to open a store in the county.

From the big cities in the public’s inherent perception to the cities at all levels of the new line, the consumption boundaries between cities of different levels are gradually blurring. In new-tier cities, the demand for consumption is rapidly increasing.

Young people here share consumption labels with their peers in first-tier cities, and their demand for quality consumption and brands is growing rapidly. In the face of highly diverse and complex ecology of new-tier cities, car companies often need to adapt their strategies to local conditions, and truly sink in terms of product positioning, cost, marketing model, and selling price.

According to the data of Kaiyuan Securities, at present, the penetration rate of new energy vehicles in first-tier cities in China has exceeded 50%, but the penetration rate in some third- and fourth-tier cities is less than 10%. It is an opportunity in the eyes of new energy car companies.

In an interview with China Energy News in June this year, Cui Dongshu, secretary-general of the Passenger Federation, said that further popularization of new energy vehicles in the private sector will inevitably develop in third- and fourth-tier cities. At present, the nationwide subsidy for the purchase of electric vehicles will continue until 2027, and phased subsidy policies such as sending electric vehicles to the countryside have already started.

Fuel vehicles still have opportunities locally. Today, with the great progress of electric vehicle products, there are more or less considerations other than market factors when buying electric vehicles in first- and second-tier cities, such as hidden bonuses such as license quotas, traffic restrictions, and parking. Moreover, the fast pace of life in big cities, congestion, traffic restrictions, and high oil prices make it easier to highlight the advantages of electric vehicles that are quiet, fast to start, and cheap to charge.

But in the new tier cities, there are almost no influencing factors outside the market. There is not much difference between the use of fuel vehicles and electric vehicles. A bigger, longer-lasting car is the best value for money in these areas.

One side is here for subversion, and the other side is a traditional tycoon, and no one will give up the cake. How to use what kind of “weapon” in this limited war is likely to affect the battle situation.

In the logic of selling cars in traditional 4S stores, from buying exposure, harvesting clicks, retaining information, answering follow-up visits, making an appointment to the store, seeing the car for a test drive, and making a transaction, if there is a problem in any link in the process, the cost invested in the customer will be reduced. loss. The lower the tier cities, the fewer 4S stores, and the Auto Trade City is more common in this place. Most of the business depends on the sky, waiting for customers to take the initiative to come to the door.

However, in the era of short videos, the access to consumer-centric professional content has changed the logic of selling cars in Auto Trade City. At the same time, it is also constantly affecting traditional 4S stores, which have evolved from traffic-driven to content-driven.

If car companies want to achieve deterministic growth in the new line market, Kuaishou may be an unavoidable business position. On the one hand, the geographical distribution of Kuaishou’s users is highly coupled with China’s population distribution. Nearly 60% of users in new-tier cities represent an incremental space that car companies can see. On the other hand, there are tens of thousands of 4S store salesmen and car brokers active on Kuaishou. They can help car companies quickly understand and integrate into the local market. At key marketing nodes, they can also achieve deterministic sales conversion.

Kuaishou began to explore the automobile business in 2019. Two years later, it has accumulated 5,646 auto experts who have achieved live streaming sales in Kuaishou. The total number of orders paid for the year reached 4.59 million, and the total order value exceeded 385 million yuan.

In 2021, the auto sales broker “Dawei, a non-mainstream automan” signed by Kuaishou, posted a video on the Kuaishou account about “Battle Passat”, which mentioned that after selling cars for more than ten years, the company decided to transform to the Internet. Selling the car and giving most of the profits to Laotie, it is not a problem for everyone to save a few thousand dollars for a 100,000 Passat.

Afterwards, this video received nearly 20,000 likes and 10,000 followers. This means that instead of relying on the sky for food, short videos help Auto Trade City to convert traffic.

But the difficulties came faster. For people from traditional industries, it is just luck that a video goes viral, and you can’t always count on luck for subsequent works. Kuaishou noticed this change and extended an olive branch to these grassroots creators. In addition to providing video shooting and editing guidance, it also provided traffic support and operation guidance. And in a live broadcast, 50 new cars were actually sold.

In Dawei’s words, “After Kuaishou started creating, we completely overturned the previous business model. Originally, it was just a simple business relationship with customers, but now there is more trust.”

Chinese car companies have gone from catching up with the market to changing technology, to challenging foreign capital and joint ventures today. They are not only surpassing in technology and chasing after products, but also telling Chinese consumers different things in terms of brand stories.

“Competition among new energy brands is intensifying, and car companies need to maintain or enhance their market position through closer user relationships.” Consulting firm Deloitte concluded in a white paper on marketing for the auto industry this year. Many car companies have internally explored how to face users more directly, because channels that are closer to users’ psychological distance are more likely to deepen their impact on users’ decision-making.

The auto industry is undergoing a wave of technology and consumption transformation. Emerging auto companies are challenging established giants, electric vehicles are impacting fuel vehicles, and the promotion of auto sales is moving from offline to online. Attracting potential users has become a high priority for various auto companies . When people’s attention shifts from portal graphics to live short video applications, the focus of brand communication also changes. Kuaishou, with its wide coverage of new-line users, rich ecological resources and lead conversion tools, can help car companies better establish contact with corresponding consumer groups, and become an effective tool for developing new-line markets and spreading brand stories.

Title picture source: The movie “Speed ​​​​Car King”

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