Karakush

You think he is just bragging, but he unexpectedly smashed the society with a blockbuster move.

This is the shock that the Ideal L9 brought to the industry within 48 hours of its launch.

Although Ideal has been hyping up the L9 since March, except for the price of 459,800 yuan, there were no other highlights that we knew about in advance:

• It is a larger six-seater;
• It has two 8155 chips and five screens, including a large HUD and a multi-touch Mini-LED replacement instrument panel;
• It supports 3D interaction that can be easily handled by both the young and old;
• It is equipped with a 7.3.4 panoramic sound system and Dolby panoramic sound technology;
• All three rows have electric adjustment and seat heating, and the front two rows have seat ventilation and ten-point massage;
• It can be connected to a Switch in the car;
• It has Ideal AD Max, a fully self-developed intelligent driving system;
• It adopts front double wishbone and rear five-link suspension, and “even compared with the German cars, it is not afraid”;
• It also comes with 100 flagship configurations that are standard, such as intelligent air suspension, in-car fridge, panoramic sky roof, and electric sunshades.

Even though it is just a reheated dish, there are no shortcomings. This is not only because Ideal has a strong fan base, but also because of the enthusiastic response from multiple perspectives.

On the night of the launch event, the number of online viewers on Weibo exceeded 5 million, causing the pricing information to be blocked. At the end of the event, no one knew how many were sold; but it did not hinder the topic from trending on social media with over 1.2 billion total views.

Within half an hour after the launch event, the app, official website, and mini-programs were crashed by pre-order users, and Ideal’s IT department urgently patched the system.

Within an hour after the launch event, Garage 42 announced that the number of orders exceeded 10,000; Sun Shaojun reported back line data, showing that each store received 6-8 orders on average, and 30% of the customers thought it was too expensive, but still placed orders.

Early the next day, competitors began to panic.

Within one day after the launch event, large-scale gatherings of male enthusiasts appeared at various fan meetings.

During a recent interview, Li Xiang gave an official statement that the order situation for the Ideal ONE is “very good” and that “L9 sales will definitely exceed the Ideal ONE, even though the price is more than 100,000 yuan higher”.

He didn’t disclose specific numbers not because he was afraid, but because he thought that fictitious orders could have ruined everything, saying “We will see the sales number, and it’s not useful to just look at the orders.”

Li Xiang had predicted the sales early on. Deliveries officially began in August, with more than 10,000 deliveries in September.

The self-confidence tastes familiar. The 2021 new ONE, which had sales of more than 10,000 units in September, had a maximum of only 6,000 units per month for the previous generation. Even within the company, many colleagues only saw it as the boss’s whim.

This time, they are more confident. In the past month, Ideal has done a lot of verification with target customers, and after the second birth family potential customers experienced the vehicle, the intention to place an order was 100%.

Looking from the outside, it’s somewhat puzzling, but the more we can’t understand, perhaps the more it illustrates that the Ideal L9 doesn’t conform to the general consumer logic. It is a signal that reflects the changes happening in the market, or it is the change itself.

What kind of magic defeated the Kullinan?

There are three puzzling issues about the Ideal L9.

First, is it expensive?

On the one hand, it is very expensive, making people wonder where China’s rich will stop, especially compared to the just-concluded 618 GMV, where the high-volume consumer enthusiasm is quite unreasonable.

On the other hand, it’s too cheap, considering that it’s the best among the “within 5 million” specs, just like the human interpretation of “Meeting with Ramah.”

Some friends say that it’s like having a Patek Philippe or Vacheron Constantin in front of you. Would you still want an Apple Watch? If it’s free, then thank you very much, but paying for it is another matter altogether.

Of course, L9 isn’t omnipotent. As a full-size SUV with a length of 5218 millimeters, it doesn’t have rear-wheel steering-like the Kullinan. The Kullinan has an all-aluminum body and the goddess of victory as well.

Li Xiang admitted that rear-wheel steering couldn’t be done because he couldn’t find any suppliers to develop and fit it. As things stand, only a few companies around the world are capable of doing so, and they are not willing to develop for Ideal alone. Therefore, the L9 is optimized within the existing structure and, under the premise of the vehicle’s size increase, can maintain a turning radius that is similar to the Ideal ONE.

For the group of “those with an annual income of less than 3 million yuan without income,” this solution is already satisfactory.

The magic of L9 is to look at the cost-effectiveness when the cost can be borne. Today, the magic of all emerging independent high-end products is cost-effectiveness, where “reach a little further, and you can buy an exclusive luxury product experience and details that you can only have by spending several times the price in the past, what you dare not aspire to.”

This is the inspiration Li Xiang got from studying Apple.The iPhone 4 was released in 2010 at a price of 4,999 yuan, while the Nokia N97, which was not as refined as the iPhone 4, cost around 5,000 to 7,000 yuan. The product equivalent in terms of quality to the iPhone 4 was the Vertu, which cost approximately 30,000 to 100,000 yuan. The average person typically spends only two to three thousand yuan on a mobile phone.

You may not have realized it, but Apple was actually the price-performance champion. Different from the past years, the Apple style of price-performance puts different demands on corporate capability.

Current capabilities mainly lie in the business model of “one-car flow”: providing only one version with all standard features to achieve efficient cost control.

For example, the Ideal L9 comes equipped with a 7.3.4 audio system, 7 surround speakers, 3 subwoofers, 4 overhead surround speakers, and 21 speakers with a maximum output of 2160W, claiming to be the “ceiling” of car audio standard equipment.

Compared with the traditional luxury brand optional 5.1 system, which costs about 60,000 to 70,000 yuan (such as Maserati, which is considered affordable), the difference lies in the fact that only a few hundred sets of optional systems are sold in the Chinese market each year, appearing on different models with different development costs, resulting in a high cost per set.

If Ideal made it standard for each car, and sold 150,000 L9s in a year, the cost per car would be as low as 100-200 yuan. Similarly, on the L9, in addition to color, the only optional configuration is the foot pedal, with other common options such as screens, HUDs, air suspensions, and ventilated massage seats all being standard.

This “one-car flow” model started with the Ideal ONE and has become even more thorough in the past two years, with only one model and one configuration. It not only improves Ideal’s capital efficiency but also brings tangible benefits to consumers.

Besides not having to worry about making a choice, all the money you spend turns into assets. Because the unwritten standard in the used car market is zero optional equipment, the optional equipment is considered a cost rather than an asset over the entire certification cycle. Li Xiang pointed out that the Ideal ONE with all standard features has a very high resale value, with a discount of only ten percent for the 2021 model, and even higher prices if sold this year for the 2020 model than in the previous two years.

This design concept for products and configurations is very different from the widely used strategy in the automotive market of multiple births, covers, and strategies. Li Xiang believes that it is a “truly sincere tribute to Apple’s choice.”

“Everyone who makes products will study Apple, hoping to make their products as good as Apple’s,” he says, “but I rarely see a company study what Apple is really doing.”He seemed like a person at the crossroads of technology and humanities, only seeing the lonely tomb of Steve Jobs standing there.

The last person to be so alone was Luo Yonghao. This fat guy was the first to propose the ideal of “no rival under five million”. This was the mutual sympathy between disciples of Jobs, which Jobs himself may not have understood.

The Fear of Being Dominated by Straight Men

The One-Strike Technique is not a new model.

Ford used the One-Strike Technique a hundred years ago, and its success lay in grasping the greatest common divisor, while its failure was due to personality differentiation leading to a lack of a greatest common divisor.

So, for “family SUVs” with prices above 450,000 yuan, can they still find the group of people who become hot-selling hunters like “family SUVs” with prices of 300,000 yuan?

According to the limited portrait statistics of Sun Shaojun’s first-line team, the first batch of pre-order users are all males, mainly enterprise owners, individual businesses, large enterprise customers and other clients with sufficient budgets. They have N+1 cars at home, but the prices are much higher than the ideal L9, such as BMW 7, Porsche, and Ferrari.

From the queue chart, we can also see additional information.

These men are not young, but they are not old either. They still have the strength to grasp the throat of life. But unfortunately, they are caught by life and have conditions to keep their hair cut short. They match with T-shirts or Polo shirts, and on workdays, they go to the mall to queue up and sit in a car that costs more than 450,000 yuan, but their work is not saturated.

In other words, they are the Chinese men of the same model as Li Xiang.

Li Xiang is Ideals’ biggest product manager. He has three criteria for product managers: the first is to have a solid methodology about products and have theoretical models in mind when discussing any problems; the second is to be very sensitive and have rich life experiences; the third is to have his own logic and stick to his judgments and choices.

In the past, he has always been showcasing his merciless abilities in one and three, in methods, logic, and his experience at Autohome. Because of this experience, Li Xiang does not believe that anyone can do market research better than himself.

For example, Ideals has always been criticized for having too narrow a “family” user group, but Li Xiang believes that this is lacking in basic theoretical and logical judgment. 89% of the purchase group above 200,000 yuan are family users, so focusing on family users actually covers 89% of the group. This is a very clear greatest common divisor. When Ideals goes from 300,000 yuan to 450,000 yuan, they’re just eating up one range after another.

“If you talk about high-end every day, no one will listen to you, and the team won’t know how to make products; but when you talk about family, every penny and technology will be developed around the family.”

At the same time, L9 has greater freedom to reflect his other advantage, which is that he himself is a very ordinary straight man.There are many things on the L9 that make the old man in you exclaim, “Wow, that’s fancy.”

Take playing games, for example. Li Xiang believes that playing games with his family is the ultimate dream for every dad. “I want to play the real 3A masterpieces and be able to play the same game with my wife and kids. That’s what I, as a dad, dream about, even if it means moving all of these expensive gadgets to the car.”

It may not make much sense, and it may not be the core selling point, but “being able to play Switch” is a direct reflection of a straight male demographic. It is broad and accommodates individual preferences.

Li Xiang is very good at understanding the male psyche, even better than Steve Jobs. He tells stories like why they should open-source AEB.

Because of several major car accidents last year, drivers who wanted to get revenge attacked pedestrians, causing significant casualties. Li Xiang believes that even if AEB cannot completely stop the car, it can alleviate the harm, especially to innocent pedestrians.

“I told the team that we have the opportunity to open-source AEB and let more cars install it to avoid such malicious harm to those who abide by the traffic rules. This was an important idea and intention we had at the time,” Li Xiang said. “We also didn’t want to talk about it publicly because everyone would say we were just riding the wave of publicity. We decided to focus on open-source instead.”

This is not something special in the industry. However, never underestimate a man’s empathy for small heroism.

As Li Xiang said, “This is the flagship product that I truly want. No matter how much money I spent in the past, I couldn’t buy a smart flagship product that meets the needs of my family.”

It embodies a straight man’s desire for a simple life, eating hot pot and singing, and it also explains the enthusiasm of buyers. They are not only impressed by the product but also by a way of life.

Long-term growth requires a return to traditional positioning strategy. Which market, at what time, and with which competitors do you want to compete?

Over 400,000 yuan is a healthy market, which is why many people flock to it this year. Although the capacity is not large, L9 provides new inspiration. Even though the price is 450,000 yuan, many insiders believe that the price range from 350,000 to 500,000 yuan, which includes midsize SUVs from BBA to entry-level midsize cars, is competitive.

Even more optimistically, if you are a value-driven consumer, there is still room for compatibility in both the higher and lower ranges.

For the ideal consumer, the L9 is an upgrade from the ONE. As shown in the teaser, the kids invited to experience the L9 are a bit older, possibly already in middle or high school, but this does not prevent dads’ one-sided imagination.This does not squeeze ONE. Li Xiang believes that people with a budget of 300,000 to 350,000 should still buy within that price range. As for those who originally budgeted for 300,000 to 350,000 but suddenly want to buy a car worth 500,000, there are certainly some, but they make up less than 10% and are not significant. Users are very practical.

Where is the boundary of a product manager?

Finally, this is the question He XPeng asked: In a fiercely competitive, global market, non-fast-moving consumer goods industry, non-protected areas of 2C, which good products rely on precise positioning to gain advantages or barriers in the midterm or long term?

Inscrutable yet crucial question.

Li Xiang has been criticized for not prioritizing research and development (R&D) for a long time. Because there really was no money before. Since the 2020 IPO, Li Xiang has invested more money in R&D, resulting in some achievements, such as establishing autonomous driving capability. Li Xiang aims to surpass XPeng in autonomous driving by the end of 2023. Currently, it is said that Idea’s autonomous driving data capability is the best in the industry in terms of sample size and sample type. This is also due to the fact that assisted driving is standard, accumulating more than 3 billion kilometers of driving mileage, extracting 190 million effective learning scenarios and effective scenes.

On the other hand, it is reflected in the supply chain.

First, it solves the problem of technological controllability and greatly improves R&D efficiency. XCU, various motherboards, etc. are now all designed by Idean itself. When encountering chip problems, it can use B-grade chips, because the entire hardware design drive layer, software layer, algorithm layer are all in its own hands.

Second, it ensures supply. For example, when making the Idea ONE, Idean told suppliers early on that they could sell 10,000 cars a month, but some suppliers actually only produced 3,000 or even 1,000. It wasn’t until they started production that they gradually added factories.

In the next two years, Idea believes that it will exceed the sales volume space that everyone could imagine before. However, when negotiating with very good suppliers, they still don’t believe it and will offer many discounts. Therefore, joint ventures are actually the best way, although there will be some early investment, but the cost of each component will be lower.

“I think traditional manufacturers are also doing this,” Li Xiang said, “We don’t need to invent anything new. We just need to learn the best experience of traditional automakers and the industry.”

So, the new question is, what can Idea bring besides precise positioning?

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.