Introduction: In the context of backwardness, 360 company has finally made a change and announced its investment in NETA Automobiles to enter the new energy automobile industry. However, shortly after 360 company joined hands with NETA Automobiles, a “public” crisis occurred. Many people compared to Zhou Hongyi’s “miracle operation” many years ago, and believed that this was intentional behavior. As a person in the Internet industry who dares to speak “truthfully”, what kind of waves will Zhou Hongyi create after entering the automobile industry?
On the evening of August 3rd, a screenshot of WeChat group chat once again sent the “Wu Yifan incident” to the hot search of Weibo. According to the information displayed in the screenshot, in a WeChat group named “[NETA] brand center management group”, a member named “Peng Gang” made some extremely “radical” remarks. As follows:
“Do we need to give Wu Yifan an opportunity, officially announce him as the spokesperson, and tell everyone that bad people also need opportunities, what do you think?”
“The spirit of NETA is to give everyone a chance to start over.”
“This matter can go viral in five minutes. We can try it. Even if we need to apologize and dismiss relevant personnel later, it’s no big deal.”
After seeing these remarks, many netizens expressed that their values had been subverted. Just when everyone was constantly debating about this controversy, NETA Automobiles began to launch the “trilogy” of apology statements. Subsequently, NETA Automobiles CEO Zhang Yong and NETA Automobiles’ investor, 360 company, successively spoke out to ensure that NETA Automobiles can uphold its values. However, what information is hidden behind the seemingly “justice”? Moreover, how could the always “honest and upright” NETA Automobiles make such a low-level mistake?
360 Ambassador to NETA
As the protagonist of this incident, Peng Gang is not an insider of NETA Automobiles, but a senior executive dispatched by 360, an investor in NETA Automobiles. On April 26 this year, NETA Automobiles announced the launch of D-round financing, with a financing amount of approximately 3 billion yuan. 360 strategically led this round of financing and after completing all investments, 360 will become the second largest shareholder of NETA Automobiles. In addition to investing, 360 also dispatched many executives to NETA Automobiles, and Peng Gang is one of them.
From Peng Gang’s resume, he has 16 years of advertising experience and has served as the Director of Integrated Strategy at Dapisi Advertising China, the Advertising Operations Partner at Ogilvy SohoSq, the CMO of Le Holdings, and the CEO of Yidao. In his professional career, Peng Gang is most famous for the numerous marketing “accidents” that occurred during his tenure at GAC NIO, including claiming that GAC NIO’s hardware profit does not exceed 1%, disclosing the supply chain pricing system, calling for full compensation for all vehicles using CATL 811 batteries that caught fire, and stating that GAC NIO intends to become the first Chinese automobile enterprise to accept Bitcoin as payment.
As the head of marketing, Peng Gang’s actions did not bring positive momentum to GAC NIO. Instead, his actions had a significant negative impact on the brand’s reputation and development. Subsequently, Peng Gang also left the company. An internal GAC NIO staff member posted on WeChat, “Fortunately, Peng Gang has left our company.”
Peng Gang’s aggressive marketing tactics for NETA Auto are undoubtedly a timed bomb buried within the company. Although this incident was quickly quashed by NETA Auto’s official response and did not spark much public opinion, the brand’s image of being temperate, pragmatic, and upward-looking has been impacted among the numerous speculations.
As the person who brought Peng Gang into NETA Auto, Zhou Hongyi did not make any public statements regarding the incident. However, 360 issued a public statement “accusing” this behavior. Although the “silence is golden” approach is consistent with Zhou Hongyi’s low-key image in recent years, friends familiar with Zhou Hongyi know that his style of action is astonishingly similar to Peng Gang’s marketing methods – a tendency to make a fuss. Therefore, whether Zhou Hongyi tacitly approves of all of this is only clear between them.
However, this incident reminds us of August 25, 2015, when Zhou Hongyi simultaneously live-streamed the video of his BMW catching fire on his 360 live platform Huajiao. The little flames jumping on the engine cover of the BMW were burning calmly, while Zhou Hongyi held his phone and recorded the entire process. The following day after live-streaming the video of his BMW catching fire, Qiku, a smartphone brand under 360, held a new product launch. The similarity between the two events, six years apart, is astonishing. The day before the incident, on August 2nd at 6:52 pm, NETA Auto’s official Weibo account posted a message that said, “high-energy warning, something big will happen tomorrow.” It makes us wonder if Zhou Hongyi has begun to become one of NETA Auto’s decision-makers, with a status not inferior to Zhang Yong.
## Another obstacle for the automotive industry?
Perhaps in the perception of many people, the introduction of 360 security guard, 360 software management expert, and other software by 360 company has made everyone’s internet experience more comfortable. Coupled with Zhou Hongyi’s image of being “able to speak the truth”, everyone is very optimistic about the cooperation between 360 and NETA Motors. However, in fact, most of the friends who have experienced the 3721 era, the 360 PK Baidu, and the 360 war Tencent know that Zhou Hongyi is not a low-key person at heart, but a arrogant and strong-minded person. As for why Zhou Hongyi is said to be arrogant, it is mainly based on Zhou Hongyi often claiming to be a “professional” in the past, such as at the 360 company’s strategic investment conference in May.
At the strategic investment conference in early May, Zhou Hongyi announced himself as the product manager of NETA Motors. At the conference, as an investor, Zhou Hongyi did not show the slightest humility, and gave a 100-minute speech on smart cars. In the end, Zhou Hongyi positioned NETA Motors as a “national smart car priced below 150,000 yuan”, and gave NETA Motors a new height of “making cars for the people”.
Perhaps it was a temporary decision, Zhou Hongyi came up with three suggestions for NETA Motors on the spot:
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The current image of NETA is too fierce, it should be changed to a picture of holding a mobile phone and a car key in each hand;
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The price of NETA is too high, it should be reduced to around 100,000 yuan, and so the car with a selling price of 120,000 yuan was lowered to 99,000 yuan;
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The phrase “my fate is not determined by heaven, but by myself” should be printed on the car.
It must be acknowledged that after the “miscarriage” of 360 mobile phones was announced, Zhou Hongyi made great changes to NETA Motors’ product strategy, but this change has gone from one extreme to another. It is worth mentioning that Zhou Hongyi’s arrogance has not changed at all.# Review of 360’s History of Mobile Phone Manufacturing
Let’s review the history of 360’s foray into mobile phone manufacturing. In 2014, 360 teamed up with Coolpad to launch the Qiku brand of smartphones. The cooperation was eventually terminated for reasons related to LeTV. Subsequently, 360 began independent manufacturing of smartphones in 2016. However, the user experience of the smartphones that 360 produced did not receive much attention as the mandatory bundling of 360 software caused users a lot of frustration. Due to the intense competition and pressure on the market, 360 announced the discontinuation of its mobile phone business, with Zhou Hongyi publicly apologizing at the time, saying “sorry for adding trouble to the mobile phone industry”. If Zhou Hongyi’s biggest mistake in making mobile phones was his excessive individualism, then in NETA Automobile, we see altruism. Nevertheless, from a fundamental perspective, Zhou Hongyi’s disdain for traditional manufacturing has not changed an iota.
360’s mobile phone business can be seen as the first collision between Zhou Hongyi’s Internet thinking and traditional manufacturing. Due to not following the development trends of the mobile phone industry and the forced transmission of 360’s software via smartphones to users, while disregarding the development of the hardware, the sustainable development of 360’s mobile phone business was not achieved. Similarly, Zhou Hongyi, when faced with the automotive industry, which has research and development and manufacturing difficulties even greater than mobile phones, did not show the slightest humility, but instead was boastful, saying that “in fact, now smart electric cars are nothing more than 4 wheels and a big phone or computer”. Zhou Hongyi believes that “different technological routes cannot be distinguished in the short term.” The so-called new car manufacturing movement requires a longer-term perspective. The first echelon consisting of NIO, XPeng, Li Auto, and NETA is also temporary.
Although compared to traditional car companies such as BYD and Geely, the development history of new carmakers such as NIO, XPeng, and Li is very short, the experience accumulated by the founders behind them and their insights into the automotive industry are not something Zhou Hongyi, a newcomer to the automotive industry, can evaluate. At the same time, Zhou Hongyi’s disdain for smart electric cars seems to allow us to foresee the future of NETA Automobile. If Zhou Hongyi continues to maintain this “hard-charging” attitude, one can imagine that in a few years, we may see headlines like “Sorry, I have caused trouble for the automotive industry” in major media outlets.As a successful leader in the internet industry, Zhou Hongyi and his team at 360 can be considered very successful, but as a product manager in the automotive industry, can Zhou Hongyi really handle it? The answer is uncertain. As a person deeply immersed in the internet industry, Zhou Hongyi’s internet thinking has limited his development in traditional industries, especially in smart manufacturing industries like new energy vehicles.
In the internet industry, product profitability is mainly based on three models: the first relies on selling real products, which is the well-known e-commerce model; the second relies on advertising to earn money; and the third provides value-added services to earn money, such as online games, etc. Of the three profitability models, 360 company can only participate in the latter two, but looking at the fields involved, 360 company had no previous experience in the automotive industry. In other words, Zhou Hongyi’s thinking lacks concepts related to the automotive industry.
On the other hand, although Li Bin, Li Xiang also comes from the internet industry, thanks to the automotive vertical platform, they have had a more comprehensive understanding of the automotive industry before crossing into the automotive industry. As for He XPeng, when he first led the XPeng Motors company, he also faced difficulties and made some industry jokes; however, He XPeng was intelligent enough to choose to actively change and no longer be self-absorbed. In comparison, Zhou Hongyi not only did not do early preparation work, but also posed as a “master” after entering the auto manufacturing industry, making people worry about the future development of himself and NETA Auto.
When Zhou Hongyi crossed over into the auto manufacturing industry, the thing that concerned people the most was his lack of vision in the mobile internet area, and this issue may also have an impact on the automotive industry. Remember when Li Kaifu proposed the concept of mobile internet at the Innovation Works, Zhou Hongyi directly accused Li Kaifu in the show, thinking that Li Kaifu was using his influence to throw a nonexistent concept to the public, and emphasized that mobile internet does not exist as traditional internet is the real internet. From this, it can be seen that Zhou Hongyi is a person who is relatively insensitive to the mobile internet, and his internet thinking is still in the era of traditional internet.From another perspective, if Zhou Hongyi had enough understanding of mobile internet, he must have realized that with the advent of mobile internet, users’ demand for traditional internet security has dropped significantly, and “security guards” will no longer be necessary in the era of smartphones. To some extent, the biggest problem Zhou Hongyi needs to solve after entering the car industry is not on the technical level, but his personal tendency to “make arbitrary decisions.”
Internet + Automakers ≠ Success
The greatest benefit of internet professionals entering traditional industries is bringing in their innovative thinking and experience to facilitate the digital and intelligent transformation of traditional industries while enjoying the advantages of internet infrastructure. However, conflicts between the internet and traditional industries still exist, and it is necessary to fully respect the experience accumulated over many years by the traditional industries. It is not simply an entry into the market with capital.
However, as a player who entered the internet along with Lei Jun, Zhou Hongyi has achieved relatively significant success in a single field, but his overall picture is far inferior to current internet leaders. Take Lei Jun as an example. Although he is only one year older than Zhou Hongyi, the team he leads has made significant achievements in multiple areas, including Xiaomi’s e-commerce platform, electronic consumer goods, and the soon-to-be-built Xiaomi automotive ecosystem.
Data showed that NETA Auto delivered a total of 6,011 new cars in July, with personal users accounting for nearly 90%. At the same time, the cumulative sales volume of NETA Auto this year has reached 27,115. Although the sales of NETA Auto are constantly increasing, all of these are based on the solid foundation built over the past years. After Zhou Hongyi joined NETA Auto, it is difficult for us to predict whether NETA Auto can maintain its original vision and branding of “steadily making cars.” However, once the brand image of NETA Auto changes for Zhou Hongyi’s sake, it will inevitably trigger the market’s negative reactions.
In recent years, there has been an increasing frequency of “verbal battles” in the automotive field. In 2020 alone, there were verbal conflicts provoked by Akio Toyoda, XPeng He, and William Li. After the “internet warlord” Zhou Hongyi entered this field, it is uncertain whether the automotive industry will experience even more intense verbal battles. The only thing we can be certain about is that once a verbal war erupts in the automotive field, regardless of whether Zhou Hongyi wins or not, it will inevitably impact the brand image of NETA Auto, and the decision-making behind the enterprise will also be criticized. If this continues, NETA Auto will inevitably fall into the development trap of “360-style” repetitive failures.
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.