Introduction: After going round and round, Tesla returns to its original point.
According to media reports, Tesla intends to reduce the number of experience stores in first-tier cities and instead build more traditional 4S stores in traditional business districts to improve sales and after-sales service capabilities.
Insiders also revealed that Tesla intends to reduce the number of its 19 experience stores in Shanghai to around 10, or about half.
Earlier, Tesla set the precedent of selling cars in supermarkets in first-tier cities such as Beijing and Shanghai, but now it has taken the initiative to withdraw from supermarkets and turned its main battlefield into traditional 4S store formats. Why such a transformation?
Faster
In 2013, Tesla opened its first experience store in a Beijing mall, and then large supermarkets in cities with high pedestrian traffic became Tesla’s main battlefield for “expansion.”
One reason for this choice is the limitation of its own ability. As an early electric vehicle brand, Tesla’s brand awareness and influence were still not deep, so it had to choose a favorable environment to achieve “finding customers for stores.” Another reason is the unique advantage of the supermarket environment. There are enough customers in supermarkets, which is a good opportunity for new car brands with little exposure and reputation.
It can increase brand awareness, let more and more people know and understand this brand, and also bring this new energy vehicle brand closer to the masses. With one stroke, why not?
The excellent hardware and software facilities of supermarkets also provide Tesla with more places to display its abilities. The basic infrastructure, charging facilities, and decoration conditions of supermarkets not only save expenses, but also provide a platform for Tesla’s unique charging performance as a new energy vehicle. The mature service system and reputation of supermarkets attract traffic, lay a solid foundation for Tesla’s marketing and display, and create favorable conditions for the brand to settle in.
More Cost-effective
As the first new energy brand to lead the trend, Tesla quickly occupied the main battlefield of major supermarkets and achieved good economic benefits and brand effects, naturally attracting a large number of followers and imitators, and attracting more and more new energy vehicle brands to settle in shopping malls.
From 2013 to the present, Tesla has created high brand awareness in just a few years, becoming the first choice for many consumers and achieving rapid sales growth and a major leap.
However, the high efficiency brought about by this completely does not mean high profits. With the rebirth of the consumer market, on the one hand, the commercial economy has brought about a new round of recovery, and rents in shopping malls have also rapidly increased. On the other hand, as Tesla’s car brand’s sales continue to rise, after-sales service cannot keep up, and more after-sales centers need to be built.## “More”
Outside of the first-tier cities, Tesla’s experiential stores are experiencing a promotion trend. In Changsha, for example, Tesla not only has multiple experience stores but is also building more delivery centers.
This clear distribution sales process is unique. Consumers test drive vehicles in the experiential centers inside supermarkets, which belongs to the pre-sale stage, and delivery and after-sales stages are completed by the payment center. However, the limitations of this process are severe, with high requirements for both test driving environment and operator skills. This process applies only to traffic-jam-free and convenient road sections and demands higher ability from test drivers than would be expected. This does not conform to the reality.
Currently, Tesla’s spatial distribution is uneven, splitting consumers’ car-selling processes. Last month, Mr. Li, who ordered a Tesla Model Y in Changsha, said that he experienced test driving in the IFS and Guojin Centers. “The sales consultant drove me from the Guojin Center to the Du Fu River Pavilion, where I test drove the car. The route mainly consisted of crowded roads in the city center,” said Li. “The sales consultant said that my delivery time would be around September, but I needed to go to the Tianxin delivery center on Queyuan Road.”
Consumers see the test-driving method, which crosses half of the city, combined with their own time, ability, and the interference of special reasons, as more of a hindrance than an advantage. Therefore, Tesla’s plan to open new stores has been pushed up the Changsha agenda.
Tesla staff told the media that Tesla still has plans to open stores in the Changsha urban area and is “searching for available locations. If there are suitable locations, we do not rule out opening the 7th or 8th store.” “We are currently searching for locations in the Xingsha area, hoping to cover the Changsha market more completely.” Not just in Changsha, in more areas, providing more convenient, fast, and intimate services to consumers is at the core.
“More Reasonable”
Therefore, opening stores in supermarkets has become a phased requirement. For Tesla, which already has a certain degree of popularity, completing the transition from “finding people for stores” to “people finding stores” is almost a given, and the shift is being made from supermarkets to traditional 4S shops.
A marketing executive from a new energy automaker in China said that Tesla would adopt different strategies in markets at different levels nationwide. In third- and fourth-tier cities where it continues to sink, shopping malls are still Tesla’s first choices, but this is a dynamic and changing process.
Although Tesla plans to reduce the number of frontline retail experience stores, it still adopts a direct sales model. According to an insider, “Tesla is now focusing on finding locations near traditional car dealerships, negotiating with many investors who are traditional car dealers, trying to lease their sites, and building ‘front-store and back-factory’ network points. The front exhibition hall can be used for experience and sales, while the back site is used for maintenance.” This transformation is not only for Tesla to expand its own market and meet its own needs, but also to provide consumers with more comprehensive after-sales services.
It is not difficult to see that while Tesla pursues “faster”, “more affordable”, and “more”, it is also developing towards “more reasonable”.
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.