Writing by | Zheng Wen
Editor | Zhou Changxian
On the evening of April 15, 2021, at the Hangzhou Bay JiKe Factory, cheers and shouts echoed under the night sky. This is the launch event of the JiKe 001, and JiKe CEO An Conghui is introducing various high-tech configurations as if they were his own.
In the audience, some of his media colleagues exclaimed that without a comparison, this configuration is too impressive, and they need to place an order immediately. From the official launch of the brand to the official delivery of the JiKe 001 on October 23, 2021, JiKe received so many orders that they had to announce the cessation of taking new orders within 192 days.
Yang Xueliang, the CMO of JiKe Intelligent Technology at Geely Holding Group, revealed that the average order amount for large orders was 335,000 yuan, and the YOU version with the highest configuration is a model that everyone recognizes as “delicious”, accounting for more than 40% of the sales. In addition, more than 82% of users have made selections, and the average selection amount is 19,000 yuan.
According to data, the overall assembly rate of Yamaha’s high-end audio equipment reached 80%, and the air suspension reached as high as 61%. Many users also chose intelligent induction automatic door kits and smart massage seats, with proportions of 44% and 57%, respectively.
Everything seemed wonderful, but who would have anticipated that JiKe would quickly turn from red to black and encounter constant troubles? Shortly after the mass deliveries began, the problems reported by the first batch of users rapidly increased. The keywords that JiKe had been promoting, “fashionable technology” and “ultimate performance,” quickly became swords pointed directly at themselves. At the same time, JiKe’s marketing initiatives were also plagued by many missteps.
So, what went wrong? And how can it be remedied?
“Problem Culture”
JiKe’s creation was a typical case of following the trend.
Originally, JiKe was positioned under Lynk & Co, creating a new product line called ZERO. However, things changed, and Geely decided to treat it as a new independent brand, establishing an independent R&D system and sales channels.
If Lynk & Co is the most successful new brand in recent years among traditional Chinese car companies, it is not an exaggeration. In the minds of many young people, Lynk & Co is a fashionable and high-end brand. Under the background of a cold automobile market, Lynk & Co’s sales have been steadily increasing, with sales of 175,000 units in 2020, representing an increase of 37%. Its brand marketing is also unique, attracting the attention of many car companies to imitate.
Perhaps Lynk & Co’s phase of success gave JiKe enormous confidence to kickstart their massive development, but this led to a series of unfavorable outcomes.Perhaps due to too much haste in the development process, Ji Ke has faced negative feedback in both product and marketing from start to finish. Or perhaps, as a traditional brand in the field of gasoline cars, Geely is capable of showing off its muscles and playing with marketing, which is just the right way to convey its brand highlights. However, in the intelligent field that Ji Ke touches upon, Geely is not proficient.
Meanwhile, the Ji Ke 001, which is loaded with luxurious configurations, is facing both cost and technology bottlenecks. Changing suppliers behind the scenes undoubtedly causes huge damage to the brand since these issues cannot be resolved directly.
What Ji Ke needs most at present is a thorough self-examination of the brand and a profound reflection on the negative problems brought by the product and marketing.
In fact, this scenario played out on Geely’s stage before.
In June 2009, General Motors, one of the three largest automakers in the United States, declared bankruptcy, shocking the entire international auto industry and giving Chinese auto companies, including Geely, a severe warning. At that time, senior managers at Geely repeatedly discussed this issue and conducted a profound self-examination of Geely’s current status.
For an enterprise, what matters most is not how well it is doing at the moment, but whether it makes progress annually. This is the most fundamental issue. If an enterprise cannot even identify its own problems, it will not make any progress. Thus, organizations must continuously improve while learning from advanced enterprise experience.
Therefore, Li Shufu created a “problem culture” for Geely. “Discovering problems is a good thing. Solving problems is a major event. Avoiding problems is stupid, and having no problem is bad.”
We believe that Ji Ke needs to pick up the “problem culture” again. As a member of Geely, the holding company provides Ji Ke with not only funds and technology, but also talents and culture. Therefore, Ji Ke not only has genes to discover problems but also has the ability to solve them.
Currently, Ji Ke’s entire product framework has been established, and its team fighting capacity is strong. As long as it continues to cooperate and communicate, it will have great potential.
As for where the boundary of co-creating with users lies, it also needs to be explored continuously in the process of running the business to find a suitable path.
“A user-centric organization does not blindly follow users. The real starting point is to develop technology, create products, and provide experiences for users. This is the starting point for user co-creation enterprises or user co-creation brands.” Yang Xueliang’s words are both introspective and responsive.
In fact, although users have given Ji Ke great pressure, they have also given a lot of encouragement.
In January of this year, when Yang Xueliang accepted a media interview in Xiamen, he said, “Our orders are still increasing, which has really encouraged us.”He believes that users are willing to order a high-end intelligent pure-electric brand from China at this price and overcome many uncertain factors to wait for delivery, which is an incentive for Jidu Auto.
“Next, we must focus on ensuring supply, production and delivery, while also developing future technologies and products, and clearly conveying the unique value of our brand.”
It is rumored that Geely’s car manufacturing base is hanging a slogan, “User complaints are the best gift.” Hopefully, this is not just a slogan, but also the first warning to Jidu Auto.
Non-Linear Development
Li Shufu made it clear in his 2019 New Year’s speech that we must find greater development space in a changing world. He believes that the fundamental solution lies in technology, the “primary productive force.”
This New Year’s speech was like a rallying cry for the entire Geely Holding Group: Geely must seek greater development space.
And Jidu Auto is undoubtedly a pioneer in “technology transformation.”
Nowadays, Li Shufu, the chairman of Geely Holding Group, has slowly retreated behind the scenes, and the annual “Insight” is almost the only way to feel his thinking. However, this does not affect us from going back to the philosophy of running Geely, which he instilled.
Geely’s car-making process is a process of innovation from learning, and a process of leapfrogging from innovation. It is a process from concept to culture, from process establishment to process transformation, from individual behavior norms to organizational mechanisms, from closed to open, from learning in second innovation to “forgetting learning,” from the dual-drive of technological innovation and business model innovation to the paradigm shift of embracing a new round of technological revolution…
All of these, when our cognition can see through the surface to the essence, we will find that Geely’s growth is “non-linear growth.”
It should be noted that the early development of a non-linear system often has the characteristics of chaos, that is, the uncertainty, irreproducibility and unpredictability of the overall behavior of a deterministic system.
From the trajectory of Geely’s non-linear growth, Li Shufu unified what seemed to be conflicting adventure and rationality, and broke away from the opposing perspective of linear thinking.
Facing the old pattern of the automotive industry, he had both the “ambition” to seize the market and debate with rivals, as well as the continuous internal driving force in strategic landing, overtaking in curves, and thinking about business models, which were eventually integrated into Geely’s cultural system of “striving culture,” “benchmarking culture,” “compliance culture,” and “problem culture.”
Today, Geely has formed a very comprehensive systemic and cultural structure, as well as a core corporate culture. Jidu Auto, which is still in its infancy, may also be inspired by the systemic and cultural structure that Li Shufu has built and can become a catalyst for Jidu Auto’s future non-linear development.
In 2022, the entire JiKe team has been established. As the system gradually takes shape and resources are slowly put into place, JiKe’s planning will soon be implemented and promoted.
If the team’s state remains the same as it is now, more problems will arise. Pressing the reset button will certainly cause great trouble for the team. In a sense, the difficulties faced by this young team are the most concrete manifestation of Geely’s periodic dilemmas.
In the past, “change” was always treated as an exception in management activities and was ignored and excluded; today, “change” has become a norm and requires a management system to face it positively.
When building a mathematical model to optimize the management system, change was once regarded as a disruptive factor that people always tried to eliminate its impact. With the shortening of technology life cycle, change has accelerated, and “interference factors” such as iteration, trial and error, flow, uncertainty, and grayness have become a nonlinear factor worthy of attention.
For example, the market environment in 2021 was complex and changeable. The shortage of chips and fluctuations in the epidemic have posed great challenges to car companies.
The operation of an enterprise is influenced by the changing internal and external environments, like a sailboat in the sea. The wind direction, wind speed, and ocean currents are constantly changing, and the control of the ship must change with the changes. There are many reasons why changes are not in place or the speed cannot keep up, and the results are self-evident.
The operation of an enterprise is like sailing, and dynamic adjustment is absolutely true.
As we all know, the traditional manufacturing industry used to be a relatively controlled organization from top to bottom, and the process played a very important role. But with the deepening of intelligence, the combination of talents and the mode of work have also changed.
Yang Xueliang admitted that “in the construction of the organization, we have been thinking about how to establish an efficient collaborative, open innovation, and flat organization.”
At a media communication meeting, a media person spoke frankly: “I always feel that JiKe lacks a top-level core value.” This sentence is sharp and strikes at the key point.
At this point, the second revelation is revealed.
In the current situation where “change” has become a norm, incorporating “interference factors” into daily management activities, unifying “adventure and rationality,” breaking away from the opposing perspectives in linear thinking, and forming JiKe’s unique brand values.
“Persist and Do”
JiKe is not a new car-making force that started from scratch, it is supported by a huge Geely system. Therefore, from the day it was born, its marketing strategy will not be as planned as new forces, but rather a part of Geely’s overall strategy.This led to the annual sales target of 70,000 units as mentioned by Yang Xueliang: “We plan to achieve an annual sales target of 650,000 units by 2025. Before 2025, it is expected to launch six products. Therefore, the compound growth rate will be very fast in the next few years, which requires us to have a very fast network coverage capability.”
Since April last year, Xpeng has successively opened 67 Xpeng stores nationwide: 1 Xpeng Center in Hangzhou and Shanghai respectively; 49 Xpeng Spaces; and 16 delivery centers.
“We believe that direct management can bring more direct connections to users,” said Yang Xueliang.
As we all know, many of the performance of electric vehicles are actually achieved through later software OTA updates, which requires the sales and after-sales service teams of the automakers to provide users with good experience and service throughout the life cycle of the product.
In addition to Xpeng Center and Xpeng Space stores, Xpeng will also go to traditional car sales cities or 4S stores to find partners. This is “Xpeng Home.” Sales personnel are stationed by Xpeng, and the process and system are developed by Xpeng, but the hardware such as location selection, store construction, and decoration are responsible by local partners.
In addition, Xpeng has established its own charging and energy supplement company, Haohan Energy, and launched the Xpeng energy sub-brand, ZEEKR Power.
“I think Xpeng is going in the right direction. This is a correct development path and cannot hesitate or turn back,” said Yang Xueliang.
In the summer of 2014, management guru Kazuo Inamori personally came to Geely for in-depth exchanges with Li Shufu and An Conghui.
Li Shufu’s first learning experience is to have a firm will. “We must have a very firm idea of what we want to do, and we cannot be shaken. We must recognize a direction and a belief, and we must resolutely do what we want to do.”
Yang Xueliang’s learning experience is that “the growth of any enterprise or brand should be spiral-like. It will not be smooth sailing and will not be able to get everyone’s recognition from the beginning. We must go through continuous exploration and turn forward in the process.”
“We still need to continue to explore. We cannot give up the pursuit of a user-centered company because of small problems, nor can we say that a flaw in a policy will prevent us from boldly carrying out our work. Xpeng’s attitude is still to serve users wholeheartedly, treat users equally and openly, and regard users as the cornerstone of our brand development. This is beyond doubt.”### Conclusion
As we move towards the era of intelligent electrification, Zeekr is an excellent sample for observation.
It not only demonstrates the pain of transformation for traditional car companies but also showcases the traditional automotive industry’s multidimensional learning, innovation, and adaptability in product, technology, marketing, and user operations.
As mentioned in the article, the third restart plan is a bold and resolute approach, like three gates that lie ahead in Zeekr’s journey, each opening would lead to a different landscape.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.