Why do we have to discuss Azalea?

Welcome, undoubtedly, is a very discussable business case. If the most discussable case in China's auto industry in the previous decade was Geely's acquisition of Volvo, perhaps the second classic case contributed by China's auto industry five or ten years further down the road will be the emergence of Azalea.

I went through the articles I've written about Azera before, and it's actually quite informative. In 2016, the degree of Azalea is far less optimistic than the LeTV car, on the talent, funds, heat, that time Bin is still just easy car network out of Bin, Jia boss is already talking about "ecological reverse" of the Internet leader. Unexpectedly, six years later, Azure is now the undisputed leader of China's new energy forces, and Jia boss has not returned to China ......

Basically, around 2017, the entire industry began to focus on Azure, and I was also in 2017 after the Shanghai Auto Show sent the first on the Azure ES8 Zhihu answer, at that time the definition and positioning of this product is not very optimistic. But at that time, according to the people Azure got to prejudge the Azure has begun to promote the production car, just to say that the first car does not give people a good feeling.

Almost to the end of 2017, because of the proliferation of new forces, including FMC, Weimar, Xiaopeng began to appear, and Azure has also begun to seek strategic cooperation with Guangzhou Automobile Works, Changan, these traditional car companies, the whole situation is confusing.

Entering 2018, Azalea basically began to be more high-profile, ES8 opened delivery, its high-end brand ambitions are considered to surface. At that time, Tiger Sniff also came out with a very hot article, "Azalea is seriously overestimated", posted before the Azalea IPO, which sparked a big debate. Soon after, Yara replied with an article titled "Azalea may be overvalued, but Tiger Sense is wrong", basically disliking Tiger Sense, and I don't know if it was the right timing for this article to be published, but Yara was soon no longer an outsider. It's really interesting to revisit these two articles now; Tiger Sniff got it right about Azalea in 2018-2019, and Yara bet on Azalea's future.

After arriving in 2019, Azera was always on the cusp of the storm, though it was mostly negative. During this period, Azera was almost isolated in the media, with all kinds of rumors about Azera's financial constraints and bankruptcy and liquidation coming one after another, and the fierce battles between Azera enthusiasts and microblogging KOLs were endless, which even triggered the faltering of Azera's PR system at that time. The only good thing is that the Azera enthusiasts were still able to stick around in the Azera App circle, which was the last thing the Azera executives had confidence in.

What I didn't realize is that an epidemic in 2020 almost knocked Azera to the ground, but changed the future of Azera. It started with Azera barely being able to pay its salaries, Li Bin struggling to find $200 million in convertible bonds to keep it afloat, and at one point it was rumored that Guangzhou Automobile and Geely had made takeover bids, before Li Bin finally chose to go with Hefei.

This is between life and death, due to the ferocity of the epidemic, the U.S. Treasury Department chose to "big water", the Tesla has been pushed to $ 500, $ 800, $ 1,000, $ 2,000 record highs. Tesla's surge has also brought about the revaluation of the entire new energy vehicle enterprises, Azalea's share price from less than two dollars gradually upward, to get rid of the risk of the share price to zero.

And as hot money keeps pouring in, the stocks of the new car-making forces are also pulling up quickly. Together with the government investment, the whole sales cycle began to accelerate, originally hovering in a few dollars for half a year in the Azalea share price, like a rocket, to double the speed of every month soared, by October its 60 billion market value has exceeded many traditional car group.

That's a look back at the past six years for Azalea, and now the story continues.

In the not-so-short span of six years, "Azalea" has experienced the kind of high moments that no Chinese auto brand has ever seen before, including the swarms of ridicule and siege, a glamorous IPO, life and death, and a wildly soaring stock price....... After all this, however, "Azalea" has only just begun its journey. After all this, Azalea is just getting started, from a car company with annual sales of a few thousand units, it has passed the 50,000-unit capacity expansion threshold, and is ready to enter the market size that a luxury brand deserves. We can imagine that there will be more room for discussion and observation in the future, and whether it's more successful or comes to a screeching halt, this new powerhouse will be worth discussing for a long time to come.

So, if we're talking about Azera at this point in time, what's at the center of the discussion? I personally think it includes the following points:

1, how the new power to spend money;

2, the new power of forward-looking to focus on;

3, innovative model is burned out;

4, the traditional model may be outdated, but the Internet thinking can not dominate everything;

5, the values of the marketing is the core of eternity.

The success of Azalea is mostly due to Li Bin's superb financing ability, if he did not use 200 million yuan of convertible bonds to renew his life, and then wait for the capital of Hefei to arrive, now Azalea still don't know where it is. However, if you look at the review, the last chance for Azure to survive is because of its strong financing ability, but Azure went off the rails in the beginning because of its strong financing ability, and then it became unconcerned ......

The story of how Azure spent its money doesn't need to be repeated, what with the several times the salary of the poachers, the large sums of money for the NIO?Day, the founding of the commemorative edition, and the extravagant test drives of the owners. The owner of the luxury test drive, R & D on the big money and so on. This is the concept that before Li Bin's financing ability is just too strong, there is no concept of scruples at all, thinking that a positive cycle can be formed when the car is released, how do you know that the automotive industry is not so smooth sailing, just any pit to make up for it with the same amount of spending.

Additionally, choosing the most expensive store in the best location, choosing the best designer, building the best experience store, and serving the best coffee ...... These segments from "The Greatest Showman" are all present in Azalea's marketing system, and the "user-first Thinking is also a huge waste of time, so that the vast majority of traditional car giants that can only develop with annual profits of 5-8% jaw-dropping, but also those who come later can not learn.

And the over-exaggerated speed of spending in the early stages made Azalea suffer a big loss in 2019, and had to cut costs in all kinds of ways, and then the "story" that was cut became negative public opinion, pulling Azalea down into the abyss. Of course, it must also be said that the set of spending money is not the only one, there is also LeTV in front of it.

The new forces that have learned from Azera's "ability to spend money", such as Byton, have gone up in smoke; a few new forces that have learned from the past, such as Ideal and Xiaopeng, have gone public in the U.S.; and there are also some companies that don't have any money but spend money, such as Sailing, which has been even more disoriented.

So what's the spending lesson to be learned from Azalea? Probably in the innovation model efforts to spend money, do not save, but in the retreat level do not spend a lot of money, and more critical is the human expenditure to spend worth.

At this stage, I think one of the biggest success factors for Azera is the product foundation of "power switching mode", which allows Azera to have a completely different development space.

It's said that the engineering consulting firm that gave us the power-switching proposal also sold its own proposal to different car companies, and the traditional car companies didn't take it, because the model didn't work, after all. Azalea accepted, so the entire product model is based on the power exchange model. This begs the question, was Azalea the wrongdoer, or was Azalea convinced that the power-switching model was the technological path for EV development?

No one knows the answer to that question anymore, but this forward-thinking technology concept did succeed. This success is not only at the product level, but also means that Azalea has converted this power-switching model into a state-supported policy, which to a certain extent establishes a competitive barrier and avoids Tesla's impact on itself. In other words, Azure's forward-looking not only lies in a certain product at a certain point in time how to lead, but to always lead - probably can be understood as the hardware is also able to OTA, just Azure this bet is too big, however, the harvest is greater.

Another forward-looking aspect that can be discussed is how to build the "quality" of a high-end luxury brand. For example, many car companies like to send posters to their friends, and each time the design style of the posters and the words are completely different, so it seems to be a temporary idea. But when you look at each of Azera's posters, they are all very textured, and all the design elements are quite uniform, so there's no abruptness or cheapness to them.

This point, Azalea is almost learning from the CI visual management system of luxury brands, behind the user development department there is a professional design team to lead all the image output, from the store style and large-scale activities design, as small as a marketing posters and circle of friends to spread the material, are all have a fine-tuned management. This management of the brand texture is a slow accumulation, but also need to respond at any time, this is not possible without a strategic level of requirements.

Another forward-looking discussion is actually a mistake at the beginning of the Azalea, that is, whether to accept the support of state-owned capital, to complete the self-built plant to build cars.

From the beginning, Azalea's idea may be very simple, that is, not to take the government's money, so that there is more initiative: if you take the government's money, then the local factory, production is a series of follow-up - at that time, Azalea is still relatively simple to think about the Internet thinking, Xiaomi OEM model of this kind of thing, people have a factory, someone, there are The company has a lot of money to spend on the project, so the local factory will be a series of follow-up.

But six years have passed, and probably Azalea no longer has such an idea. Now that we have taken the money from Hefei, the headquarters of Azure China has also been placed in Hefei, and JAC's factories are constantly being invested in, and even the national industrial policy has been adjusted, so basically, Azure is still going back to its original location after a lot of trouble. But in fact, the original Azalea had the opportunity to build a factory in Shanghai, which is not comparable to Azalea's entire supply chain management, personnel management.

In fact, many people would imagine that the state-owned capital's "desire to control" is too strong -- in fact, companies that really want to do real work are not worried about the injection of state-owned capital, only those who want to "run away" will be able to do so. Only those who want to "run away" will worry about the money being chased back - but consider the impact of the automotive industry on local GDP, in itself, it is impossible to detach from the support of the local government. Therefore, in addition to the Azalea, most of the new forces are still choosing to build their own factories, from the cost point of view, billions of dollars of investment and access to policy support, is not a loss of business. At the same time, the problem of OEM also have to consider the requirements of capital turnover, other OEM is also to be the current car, and new energy subsidies down, but also first to the pockets of others.

Discussing Azalea, another topic that can't be avoided is the innovative models that Azalea has brought to the table, such as NIO?HOUSE, NIO?SPACE, NIO?POWER, as well as battery leasing, flexible battery upgrades, and worry-free service.

These innovations, at first glance, do seem to be very novel, disrupting the traditional automotive industry's transaction model and revenue approach, and many car companies would like to copy them. However, we must see, these innovative models are burned out, not today's head shot, tomorrow's implementation, the day after tomorrow can make money, but need a "burn process", this process will even be very long.

In fact, even if Azera is now very hot NIO?POWER, battery upgrades these services, its gross margin is far less than the car sales business, and can even be said to stick money to do. Especially NIO?POWER in a long time have been criticized, "completely like a public welfare project", has waited until the Azalea power exchange, charging together packaged only to be considered to maintain the revenue of energy services. And similar to the power exchange model, the establishment of power exchange station can only be limited to the Azalea's own system, under the premise of the scale of tens of thousands of vehicles, even in cities like Chengdu operation is not considered sufficient, not to mention spread all over China's highway.

The other thing is that the NIO?HOUSE, which looks like a high-profile cow house, is also a high-cost project, and you can only see its value if you can even put marketing costs into it and measure them together. And whether it is NIO?HOUSE or NIO?SPACE, the core of its ability to operate is the Azalea has always insisted on a uniform selling price and order model, which can promote the two sales business is able to complete the transaction behavior, but this is basically impossible for traditional car companies.

Back to the first discussion, "what is Azalea to insist on when spending money", probably this identification of innovative models is the part that needs to spend money in the long term. Once you choose to give up on any of the innovation points in the middle, basically the model can't be continued, which is also a great impact on Azalea's operation model. In fact, it's not like Azalea hasn't interrupted its model innovations, such as the "free lifetime battery replacement" innovation, which was adjusted because it couldn't burn any more, and then the "Worry-Free Service 2.0", which also readjusted the price.

All in all, we can see from the Azalea, innovation is not simply pat on the head, but the top to make up their minds to adhere to and invest in, if you do not have the effect of three months to withdraw the cost, even if it is really a good idea is useless.

About Azalea's car-making model, the market commented at the beginning as "Internet car-making", that is, using the Internet to innovate. There are both product-level iterative updating thinking, as well as learning from Tesla's intelligent innovation, of course, more importantly, is centered around the user and the development of the "user first" thinking.

This kind of "user thinking" is what Azera has been emphasizing in the early days of its business, basically "whatever the user says is right", and even some of the engineering should be user demand oriented. And in the sales and service process, not to mention, about NIO?POWER replenishment of electricity has been a lot of paragraphs, almost replenishment of electricity brother has become an all-round servant. And in the sales business, the beginning of the azalea is even the exclusion of traditional automotive industry practitioners, at every turn to require the Internet, digital crossover, a city store general manager is likely to be from a large IT company's head of the western region of the transformation of the bottom line is probably the sales of Tesla.

This kind of wholesale Internet thinking has caused a lot of problems for Azera's sales business in the early stages.

For example, at the actual business level, Azalea is completely unable to successfully complete outbound sales, and basically maintains the kind of KOL call in the digital realm, where users do their own research, and then Fellows from the cow house help answer questions and place orders. In the end, it's just that Azalea hasn't been able to break the circle for a long time, and has been in the process of self-digestion in the circle, so that even non-automotive sales at auto shows won't take the initiative to reach out and make a sale.

The reason why Internet thinking dominates is largely a kind of thinking that innovates for the sake of innovation, ignoring the experience and principles accumulated by the auto industry over the past hundred years. In hindsight, Azalea has stepped on many potholes because of this Internet-led thinking. Later, many of Azalea's business-level supervisors and lower-level employees were replaced by people from the automotive industry, and the marketing work was restarted, with many of the implementation details learning from the BBA's strategy, so as to push forward the sales business in a more efficient way.

In other words, for a new force like Azera, its emergence does transform the shortcomings of the traditional automotive model, such as the unified pricing and sales model, replacing inventory depth with order depth, tracking the way sales are made, digital management, and so on. However, the wholesale rejection of the traditional model has also been proved wrong, because from the consumer path of such products as cars, the essence is still a high consumer goods, coupled with the fact that Azalea is a brand new brand, will not be like the natural formation of IT digital products sales.

The success of Azalea in its first six years also proves one more thing: values marketing never goes out of style, and it's the most powerful underpinning of an innovative company.

What is values marketing? We can simply understand it as a premium for a non-product element, essentially a factor that triggers emotional **** from consumers, and as such builds a differentiated positioning.

Before Azera, Tesla was the most successful company in the electric car field, and traditional car companies like GM and Renault-Nissan tried to catch up, yet it was pointless. Because Tesla to the Silicon Valley nouveau riche perception is not just a car, but a digital ICON with a symbol, representing the world trend-setting experience.

And Azalea almost took over those symbols from Tesla, and then localized them for China -- more luxury products, more exclusive service, Internet-style pricing principles, and so on. But what ultimately awakens young Chinese luxury car buyers is the sense of "gratuitous service" in the app. For example, you can see Azera owners giving detailed explanations to potential customers, or participating in various volunteer services during NIO?DAY, as well as providing various kinds of inexplicable startup assistance.

It's a very strange point that, in an age when everything costs something, the Azera owner group seems to possess the most precious "selfless spirit" of the human heart.

This brings a new value to young Chinese luxury car buyers, as the Azera brand has a very bright light, without all the glitz and glamor of the traditional luxury brands, without appearing to be overly flamboyant, and with a mindset that it has something to offer to society as a whole, and so on and so forth.

In fact, many brands have so-called car clubs, official groups, why did Azera form such a value output? My personal opinion is that it is still the subjective guidance of Azera's intention, or from the very beginning of Azera's establishment, it has intentionally constructed such values at the user level, rather than just delivering the value of the product itself. This strategic level of crush, is the absolute advantage of the Azera compared to most of the traditional car companies car club, even if the BBA has such a software, the probability is not able to form such a *** Ming, after all, it is difficult to put the maintenance of millions of users *** the same values of this matter into a top priority.

The above is what I want to discuss when people are talking about Azera. In fact, every point from it can be expanded a few thousand words more, because the entire Azalea model is constructed as a chain of rings, without saying that a certain link is the core support, it is more like each link is driving another link, forming a continuous iteration and update.

If we come back to the discussion of Azera in a few more years, I will personally choose to observe whether the values of Azera will still exist when the user base exceeds 200,000 or 300,000 units, whether the marketing model of Azera will also be involutional, and whether Azera will also take a shutdown because of the profitability of its business. And then there's the question of what Azalea's stock price will be at that point.

Writing｜Liu Xuexiao

Picture｜Network

This article comes from the author of Automotive Home Car Family, and does not represent the viewpoint position of Automotive Home.