Zeekr's Rapid Growth: 100K Deliveries in 548 Days, 70 Cars per Store and Retail Digitalization Drives Efficiency

During the 2023 Zeekr Summer Media Communication Conference, 42HOW had a conversation with Zeekr executives, including An Conghui, to discuss Zeekr’s layout in operation, product, brand, and intelligence.

Here are the key points mentioned by Zeekr:

Q: Zeekr achieved 100,000 deliveries in 548 days, what’s the current status in terms of per-store efficiency or sales efficiency per person? Is there anything outstanding or unique about Zeekr in process management, IT tools, etc.?

A1: In 2022, the direct-store efficiency of brands insisting on a direct sales model can be divided into three levels. In terms of comprehensive store efficiency, Tesla is at approximately 120-130 vehicles annually, “Nio, XPeng, and LI” are almost 30 vehicles, and Zeekr’s annual comprehensive store efficiency last year was 70 vehicles.

A2: Zeekr’s basic human efficiency in recent months is about 8.6 vehicles per month. In management, Zeekr’s management culture is that decisions are made by whomever is on the front line.

For example, I am now in charge of the marketing department, and I make decisions for 98% of the work. The top leader focuses on the overall direction, but most of the business decisions are made by the front-line team. Thus, Zeekr’s organizational structure is flat, very different from the traditional top-down management. Fewer management levels and wider radius can simultaneously push many things.

Additionally, Zeekr’s team has relatively strong self-motivation, belonging to a small entrepreneurial team within a large entrepreneurial company. So, I believe that a flat management structure is a significant characteristic of Zeekr.

A3: There are many tools for efficacy evaluation, such as store efficiency, human efficiency, and vehicle efficiency. Within Zeekr, there is also efficiency per square meter, and there is a system for evaluating it. If the sole pursuit is efficiency, fewer stores should be opened. However, considering Zeekr’s sustainable development in the years to come, it needs to be synchronized with the overall product.

Regarding the sales side, Zeekr’s management system faces massive challenges while considering input-output ratios, as the current sales system (back-end support + front-end) is approaching 4,000 employees. In the early stages of layout, Zeekr primarily focused on first-tier markets; with the launch of new models, it will gradually expand to second- and third-tier markets. At the same time, Zeekr must consider the long-term while managing daily operations carefully and be more lean in the short term.

Concerning management, traditionally, one person at Zeekr can manage a team of seven. However, the digital capabilities and advanced technology to support this practice did not exist then. Now, things have changed. Moreover, management is also related to the overall organization, culture, and system of the company. ** If the whole system force, corporate culture, and digital capabilities are strong, then the coverage as a manager will be broader **.

Q: What does Zeekr’s retail sector’s digital situation look like?

A: Zeekr has been reducing the workload in recent months. Digitization essentially aims to improve efficiency, which requires reduction. The retail team has three main tasks: if related, retain; if unrelated, cut off.First, it’s related to transaction volume. Zeekr’s key objectives are all related to transaction volume. Second, it’s related to customer satisfaction. Priorities should be given to those related to customer satisfaction. Third, it’s related to operational efficiency.

Building a digital infrastructure takes a long time, so it’s important to have the right direction. In the past, there were digital tools at the headquarter level and at the retail level, but the digital integration between different departments wasn’t that strong. For example, from lead collection to entering the system and then allocating it to different stores and individuals, it was all part of a digital system.

Now, Zeekr can efficiently allocate leads to high-efficiency individuals. The system calculates the single-person transaction efficiency over the past 7 days, and Zeekr partners with high scores will be allocated more high-quality leads. In recent months, as everyone can see, Zeekr’s transaction volume has been increasing.

The construction of the entire digital system is a very long process, taking into account both architectural and channel issues. Zeekr is still continuously optimizing, and currently, it’s better than before.

Q: In terms of sales policy, will Zeekr consider separating customer benefits to make contemporaneous car owners feel less disadvantaged? Zeekr’s after-sales and car-machine services are still insufficient. Can the current market environment become more focused and efficient?

A: In terms of after-sales, Zeekr initially shared the after-sales service system with Lynk&Co. Since last year, Zeekr has accelerated the construction of exclusive after-sales services, such as Zeekr Home. There are now more than 30 stores, and this year, Zeekr will also have its own service centers. Zeekr is transitioning from the original authorization to Lynk&Co after-sales mode to an exclusive Zeekr model. As the ownership expands, Zeekr’s service satisfaction will further improve, and there will be significant changes by the end of the year.

Regarding car-machine services, first of all, the scale and budget of Zeekr’s entire smart cockpit team are very high, and the company attaches great importance to this aspect. Zeekr’s response speed and iteration speed are very fast, and everyone can see Zeekr’s performance in this area in the future.

Secondly, Zeekr has strong determination in the overall planning of car-machine technology. If we don’t establish a benchmark in the early stage, it’s not enough for a follower to be just like others. Only by surpassing others can people think you have some competitiveness. Therefore, for the latecomers, Zeekr needs to provide a better experience.

Q: What is the driving force behind Zeekr’s product planning? Why hasn’t Zeekr launched a mainstream SUV product in the market yet?A: As for product planning, Zeekr was forced out of the mold. In order to stand out, following the trends of other new-energy brands will not be sufficient. Besides, Zeekr already has a solid foundation, so why should it follow what others are doing?

When it comes to addressing customer pain points, many people may buy luxury compact cars to impress others, yet few people dare to admit this. Similarly, the safety issues of MPVs are also overlooked, despite being the biggest pain point for many customers.

How do we solve this problem? Zeekr integrates flagship features and technologies into every car, ensuring a great experience, functionality, and technology. This naturally establishes a market share. For instance, considering car models such as Zeekr X, the conventional way of thinking would certainly not dare to adopt this, and it would hesitate to take the plunge. However, by following the trend, we would always be a step behind.

Q: There’s a considerable price gap between Zeekr X and 001. Will Zeekr release cars with a mid-range price or perhaps slightly bigger SUVs than Zeekr X in the future? What are your considerations and changes regarding product strategy? Moreover, will Zeekr have any conflicts with competitors like the BBA group in terms of luxury appeal?

A1: There’s no doubt that Zeekr will break through the 10,000 mark in June.

Zeekr will have products in every sub-market; it is just a matter of time. Once a product is decided, the first step is to strive for excellence, which is crucial. It’s easy to build a car, but difficult to create a blockbuster. If several consecutive models are blockbusters, then it is truly impressive. Zeekr’s product planning and crafting process offers a competitive edge for our team.

Every time Zeekr releases a car model, it should set the benchmark. When the second model comes out, the previous one must grow in comparison. If a company cannot achieve this, producing more products will only hasten its demise. At the same time, a company’s product gross margin must improve. If these aspects are well-handled, your competitiveness may set you apart from other auto manufacturers.

A2: In fact, Zeekr’s product layout has already reflected certain advantages. Many competitors, when releasing a new car, will see the sales of another car being affected. However, only a few manufacturers avoid this situation, and LI is one of them. We are learning from these outstanding examples.

In reality, Zeekr caters to a specific demographic – the new middle class and wealthy families. The 189,800 RMB Zeekr X has a 9% sales ratio, with the remaining 91% being 210,000 and 230,000. These three car models target affluent households with more children, since they also need style for transportation.

Regarding product characteristics, firstly, product planning is paramount; each of the three models experiences incremental growth. Secondly, the potential impact of the Zeekr X has yet to be unleashed. Owing to the large wheelbase and ample space of the smaller car models in the Chinese market, these vehicles will enter the most significant European markets, as Europeans generally prefer cars no longer than 4.5 meters.

Therefore, the evolutionary development of product layout should not be seen through a short-term perspective. The transition from internal combustion engines to an all-electric future will have a certain interim period, and this transition lies within a considerable crossover between petrol and electric vehicles. Some manufacturers have managed to catch this windfall opportunity.For Zeekr, it has enough heritage and strength to fight a long-term battle. Perhaps with a more distant perspective on today’s competition, Zeekr’s mentality will be more peaceful while maintaining a certain level of growth. Although Zeekr’s scale is still small and not large enough, it will definitely grow.

Q: Regarding Zeekr’s autonomous driving, what is the current progress?

A: In terms of autonomous driving, Zeekr definitely has detailed plans. The self-developed system will be installed in future models.

As for other competitors’ products, if you are satisfied with their performance, it can be responsibly said that Zeekr is even more confident. Zeekr objectively analyzes its own advantages and their advantages very clearly. In August at the Evolution Day, Zeekr will show and experience the next-step autonomous driving, cockpit, distributed drive and electric drive systems, as well as many actual objects of new technologies, including mechanical architecture and electronic architecture.

Q: How will Zeekr respond to the increasingly fierce market competition in the future? In the short term, how will Zeekr respond to current issues?

A: Zeekr released the Zeekr 001 on April 15, 2021, and began delivery on October 23, 2021. It delivered more than 6,000 units in the first year and about two months. In 2022, Zeekr delivered 71,941 units, with an average of about 6,000 per month. However, at the beginning of this year, Zeekr’s rhythm was slightly disrupted, starting with more than 3,000 units and climbing back to more than 6,000 units of Zeekr 001 in the latest month. This month’s delivery will be higher than last month, definitely exceeding 10,000 units. The Zeekr 001 has always been pursued and compared.

First, being compared is a good thing, as peers will use the Zeekr 001 for comparison, and others will help us advertise, which is not too bad.

Second, excellent product strength will continuously be put into the market, and Zeekr 001 has been on the market for quite some time. It proves that the product strength of Zeekr 001 is excellent. At the same time, Zeekr still has room for improvement, as I am confident in further enhancing efficiency, retail, and customer service capabilities.

Third, every company has its own highlights and dark moments. In just over two years, Zeekr has experienced many highlights and dark moments. In a highly competitive market, Zeekr can win. Firstly, Zeekr has a very strong product foundation. Secondly, Zeekr has strong company strength, without resorting to short-term actions. Because Zeekr adheres to long-termism, its comprehensive competitiveness is excellent. Although competitors are constantly launching new products, Zeekr still has a strong market performance to date. In the future, Zeekr will announce new technologies and products, so stay tuned.

Given these circumstances, on the communication and PR level, Zeekr needs to let more people know who we are. The Zeekr team will use our monthly results to demonstrate that we will become No. 1 in every niche market. EveryoneVery competitive, yet we are still confident in outperforming others.

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.