Car companies are developing side businesses and competing for customers across industries?

This article discusses the phenomenon of sideline business in the automotive industry, where major auto brands are involved in other areas of business to increase revenue and promote their brand image. Taking NIO as an example, the article details its launch of coffee service on a food delivery service platform and cross-border cooperation with other brands. At the same time, the article explores the significance of this cross-border operation and how it can help auto brands attract more customers and strengthen their market position.

Recently, NIO launched the NIO CAFE takeaway service in 10 stores in Shanghai, including coffee, specialty drinks, children's drinks, etc., covering popular locations such as Shanghai Xingye Taikoo Hui, Shanghai MixC, and Shanghai Tower.

In fact, more and more car brands are trying cross-border marketing, whether launching their own products or cross-border joint ventures, car companies' marketing strategies are becoming more diverse. What is the significance of the launch of NIO CAFE? What can cross-border marketing bring to car brands?

1. What is NIO’s purpose in crossing over to the coffee industry?

Nowadays, more and more automobile brands are emphasizing experience, technology and service, which is particularly evident in new energy vehicles. Experience stores have a natural advantage in reaching users and conveying brand values ​​to consumers. This is also the scenario where many automobile brands focus their operations.

Li Bin, CEO of NIO, is well aware of this truth. He once said: "NIO's business model is based on user experience. The biggest difference between NIO and other car manufacturers is that some companies only think about cars, but NIO puts people first."

Based on this, NIO has developed two major features, battery swap technology and service, based on user needs. Battery swap technology has largely alleviated the mileage anxiety of car owners, while service creates a pleasant lifestyle for users through the ultimate user experience, thus creating differentiated brand competitiveness.

The most famous service center in NIO is NIO House. According to the official definition, NIO House is a lifestyle community where NIO users can share happiness and grow together. It is often located in the core business districts of first- and second-tier cities. In NIO House, consumers can not only view cars and test drive them, but also enjoy services such as meetings, reading, and coffee specialties.

Among them, coffee is an important way for NIO to maintain its customers and a service that NIO has invested a lot in. NIO chose to sell coffee, to a large extent, to cater to the current consumption trend of young people. On the one hand, young users are the target audience of new energy vehicles, and coffee can play a certain role in connecting users. On the other hand, cross-border activities can easily arouse users' curiosity and break the previous situation of brands transmitting information to consumers in a one-way manner, turning passive acceptance of information into active understanding.

Recently, NIO has also launched the "2024 NIO Coffee Masters Competition", which has attracted many contestants to participate. Many users have shared their entries and the process of the competition on social platforms, which has invisibly created momentum for the brand's communication, helped the brand expand its social voice, and brought more attention and traffic to NIO Coffee.

It is understood that the price of NIO coffee ranges from 28 yuan to 36 yuan, and the price of special drinks is 48 yuan, which is comparable to Starbucks. Although the price is quite high, many car owners still pay for it. The launch of NIO CAFE takeaway service not only expands the market influence of NIO coffee, but also broadens the channels for NIO cars to acquire customers.

In addition, NIO has also launched the "battery coffee business" at its brand battery swap stations, and put forward the slogan "three minutes to swap batteries, one minute to buy coffee", explaining that battery swapping is convenient and fast, and it only takes the time of a cup of coffee. The organic combination of battery swapping technology and coffee business further highlights NIO's humane service.

Overall, NIO's coffee sales are more like using coffee elements to build a new, immersive experience scene for brand marketing. While reaching the target customer base with high-quality coffee, it also solves the problem of attracting users and retaining customer experience, allowing more consumers to become interested in NIO and promote subsequent purchase conversions.

2. Car companies cross borders and play in a variety of ways

In fact, cross-border cooperation among car companies is nothing new. Whether it is building its own brand like NIO, launching brand peripheral products, or cross-border collaboration, such cases can be found everywhere.

Porsche is at the forefront of many brands in building its own brand. As early as 1972, Porsche established the Porsche Design brand, which is famous for selling high-end accessories such as sunglasses, pens and watches.

In July 2005, Porsche and Adidas signed a long-term partnership agreement and began to launch top-level professional sports equipment. In 2012, the brand-new adidas Originals by Porsche Design series was created, targeting young consumers who advocate street culture. The cooperation between the two parties ended in 2019. Currently, Porsche Design's products cover many fields such as fashion, sports, jewelry, home furnishings, and electrical appliances.

For car brands, building their own brands requires a large investment of resources and multiple factors such as brand market positioning and influence, which is not suitable for all car companies. However, launching peripheral products is relatively low-cost and has become a standard feature of many car companies.

For example, the mall of Xiaopeng Motors APP is divided into six major categories: driving products, car services, smart life, sports and outdoor, brand cultural and creative products, and life services. Among them, the brand cultural and creative product category includes cultural and creative trendy toys, clothing and luggage, etc., and you can see car models, space bear dolls, hoodies, sun protection clothing and other products.

Ideal Auto's online store focuses on car accessories and has created popular products. Previously, Ideal Auto's official online store launched 500 car wireless microphones priced at 365 yuan, which sold out in 25 minutes. A few days later, 1,800 units were replenished and still sold out within an hour.

Traditional automobile brands such as BYD, Geely, Haval, and GM also followed the trend and added in-car digital, home furnishing, clothing, outdoor and other lifestyle products to the mall. Among them, BYD manufactured masks and hand sanitizers, SAIC-GM-Wuling entered the food industry and launched Wuling snail rice noodle, while Nissan still stuck to its old business and launched Sylphy car seats.

As for luxury brands, they cover a wider range, and cross-border clothing is more common. For example, Ferrari once collaborated with Bape, a Japanese fashion brand, and in 2021, it launched the Puma XFerrarilONF co-branded running shoes with Puma, each pair of which costs $450, or about RMB 3,060. BMW co-founded the fashion brand BMW Studio with Ports, and opened many offline stores. In addition, Bentley, Lincoln, Audi, Mercedes-Benz, and Maserati also have peripheral product layouts.

Whether it is launching its own brand or creating peripheral products, this has a certain promotional effect on the car brand. However , the more common marketing method for car companies at present is cross-border collaboration. From classic anime IP, games to humanities and arts, the collaboration methods are rich and diverse, constantly attracting users' attention.

In order to better attract young consumers, especially female users, Wuling Hongguang chose to collaborate with Disney and launched the Wuling Bingo Mickey Limited Edition, hoping to leverage Disney's international brand to enhance the image and positioning of the model. SAIC Volkswagen's new all-electric SUV ID.4 X also collaborated with anime IPs, launching a Pokémon special edition that has attracted many anime fans.

There are also wonderful examples of cross-border games. As early as 2019, Razer and NIO jointly launched a customized new model NIO X RazerES6 Dark Explorer, which was limited to 88 units worldwide and priced at 467,800 yuan. This cooperation made many users call it cool.

In addition, cultural IP is also a hot topic in the automotive industry. As a representative of the national style model in the automotive industry, the Haval H6 National Tide Edition has collaborated with the Dunhuang Museum, which has caused a carnival among national style enthusiasts. At the beginning of this year, Arcfox Auto joined hands with "Walking with Brilliance" to start a new journey, bringing users a cultural feast in the exploration of the heart of the Central Plains.

The collaboration with celebrities has given us more possibilities for crossover in the automotive industry. As a popular model in China, the Audi A3 has always been very popular, and the Audi A3 Sportback x Wang Yibo collaboration model has made netizens exclaim "so handsome that there are no friends!" This car is limited to 23 units worldwide and became a hit as soon as it was launched.

3. What can cross-border business bring to the brand?

Cross-border cooperation among automobile companies is not only an expansion at the product level, but also a part of user experience and ecological construction.

For example, NIO has crossed over to sell coffee and launched the "charging coffee business" at its branded battery swap stations. In essence, it is improving the "car life" service system. Li Bin once said, "We are not just a car company, our mission is to create a pleasant lifestyle for our users." Building the brand into a lifestyle is the ultimate goal of NIO's automotive brand strategy.

Through the "Car Life" service system, NIO has always maintained a close connection with users. From the online NIO car APP to the offline NIO House, in addition to basic charging, battery replacement, vehicle repair/maintenance and other projects, it also provides car owners with a social entertainment space. Whether car owners, fans or manufacturer personnel, they are all included in this social circle.

High-intensity user operations have brought significant benefits to the brand. Previously, Weilai co-founder Qin Lihong mentioned that nearly 70% of sales during the epidemic came from referrals from old car owners. Even though the data during the epidemic is unique, looking at the post-epidemic results alone, the proportion of referrals from old car owners in the overall Weilai new car sales can still be maintained at around 40%.

It can be said that NIO’s cross-border coffee sales are a supplement to its “car life” service system, with the main purpose being the long-term benefits of the brand, while cross-border collaborations are more like a short-term “amplifier” of the brand’s voice.

Generally speaking, the value of brand co-branding is to integrate the resources of both parties, such as channels, users, popularity, image, values, etc., to achieve the superposition of brand effects. The most direct purpose of automobile brands launching co-branded products through cross-border cooperation is to increase attention and attract some consumers who do not have a deep understanding of automobiles.

When a car brand collaborates with something that young people are passionate about, it is easy to break down barriers and achieve two-way communication. In addition, co-branded products are generally not permanent products, but are sold in limited quantities within a certain period of time. The limited edition label makes consumers feel fresh while also bringing higher popularity to the brand.

Nowadays, the marketing methods of automobile companies are becoming more diversified and younger. Whether it is building their own brands or cross-border collaborations, they are ways for automobile brands to find and communicate with users. In this process, the ultimate goal of brand marketing is to subtly influence users' consumption decisions through creative content and interaction.

References:

1. Weilai launches beverage delivery business, what is the car company trying to do by crossing borders? ｜China Times

2. What is NIO's intention in selling coffee? | Marketing Strategy

3. Weilai started to think about content when it started selling coffee｜Daofa Research Institute

4. New car-making forces’ “new marketing strategy”: bosses become top-tier, cross-border collaborations a “panacea”? | m360

Source: TopKlout (ID: 1093227)