The 'Tesla of China' IPO'ed last month in the US - take a look inside the swanky clubhouses they are using to try to lure wealthy people to buy their cars

Harrison Jacobs

Oct 10, 2018, 20:05 IST

The 'Tesla of China' IPO'ed last month in the US - take a look inside the swanky clubhouses they are using to try to lure wealthy people to buy their cars

Reuters

Buy a car and get into a swanky club.

Chinese electric-car startup Nio, which has been touted as the Tesla of China, went public in the US last month.
The company is competing with Tesla in China, where the American automaker generated $2 billion in sales last year.
Nio is trying to win over customers with perks like its exclusive clubhouses for customers known as Nio Houses, which are a cross between a co-working space, a cafe, a daycare center, and an event space.
I recently a got a look inside the Nio House in the heart of Beijing. It was a calm, inviting space that would be a great place to stop by for a breather before or after a long day at work.

Chinese electric-car startup Nio, which has been touted as the Tesla of China, went public in the US last month. The company raised $1 billion from the offering, falling short of the $1.8 billion target it had set.

While the company held its initial public offering in the US, NIO's main target market is in China, where it is attempting to beat out Tesla to become the country's top electric vehicle manufacturer. Last year, Tesla generated $2 billion in sales, double what it made in 2016.

But Nio officially launched its $67,000 ES8 electric SUV last December and began shipping it to customers in June. It's officially game on.

Tesla has a nearly five-year headstart in China, but NIO is hoping that it can steal a page out of Apple's playbook to win over wealthy Chinese consumers. Namely, it wants to center its company and its cars around the tech industry idea of "user experience."

"If we believe the car itself is a user touchpoint - one of many touchpoints a company can provide with its users - I think the mobile internet would be the applicable business model in the auto industry," CEO William Li told Business Insider this past spring.

A major part of that strategy is offering its customers numerous perks to get them hooked on the company. The biggest perk they've come up with yet is a network of swanky clubhouses called NIO Houses so that NIO drivers home away from home wherever they take their cars.

I recently got a look inside the company's NIO House in the heart of Beijing. Here's what it was like:

In December, Nio launched its first production car, the ES8, a seven-seat electric SUV with 220 miles of range. The first shipment of cars went out to customers who pre-ordered in June. It sells for around $68,000 before subsidies provided by the Chinese government.

While the company said it plans to launch a car in the US in 2020, its main goal is beating out Tesla in China, where the company generated $2 billion in sales last year. Nio is working on a number of other cars, including the more affordable ES6 and this EVE autonomous concept car.

But a huge part of the company's strategy is focusing on "user experience," Izzy Zhu, vice president of user development at Nio, told Business Insider. Like Tesla, Nio sells directly to customers at its locations, rather than third-party dealerships.

A major difference, Zhu said, is that Nio's locations aren't just for prospective buyers, but current owners too. The locations, known as Nio Houses, are like swanky clubhouses for their car owners or, as the company calls them, its "users."

There are currently ten Nio Houses open in China, with plans to open seven more this year. This is one of two locations in Beijing.

Nio Houses are usually located in wealthy or highly visited shopping districts like Beijing's Oriental Plaza. I visited the Beijing location this past spring.

The bottom floor of the Nio House looks like a pared-down car showroom. While the company's currently-shipping ES8 is available to look at, the show-stopper is Nio's EP9 supercar, which set the record for fastest lap by an electric car at several race tracks.

Nio has its own Formula E — E for electric cars — racing team. One of the company's racing cars is on display in the Nio House.

Zhu believes that by viewing its customers as users, the company is using an approach similar to Apple or Google, where the car is but one of many touch-points. Nio has an internally developed app where users can attend events, gain information, chat with other users, and even interact with people at the company all the way up to CEO William Li.

After surveying the showroom floor, I headed up this elaborate spiral staircase to the second floor. While the showroom is open to anyone, only car owners can access the upstairs.

The upstairs looks like amenity-filled office of a tech startup. There are lots of walls covered with greenery.

There's an open-plan kitchen where Nio's baristas can serve up fresh coffee and snacks.

I had their signature latte drink which alludes to the company's Chinese name, Weilai. It translates as “blue sky coming."

The company views the upstairs area as a mix between a club and a co-working space. They are targeting busy and well-off urban Chinese who may need a quick conference room to present their startup pitch to investors.

Or even just a quiet room to work in between meetings.

Another major area of the club is the Library. It is mostly just a quiet place to read.

But the books are carefully curated by a professional advisor to include a mix of topics that may be appealing to its high-end audience.

I spotted a number of books on business, tech, travel, and even the entire translated collection of Game of Thrones books.

There are sometimes themes to the book selections. When I was there, it was "Nobel Laureates Month." There were books by a number of past Nobel Laureates.

There is the wide-open "Forum" space. Normally, it's just a number of tables for people to talk and relax at. But Nio has a regular event schedule of interesting speakers for users to attend.

The idea, according to Zhu, is that users can feel at home in whatever city they happen to be driving or traveling through.

At its core, the Nio House is a chill place to escape the bustle of the city. I can picture stopping at one before or after work if it was near the office (which is the idea).

Nio is hoping to build a customer base that is as crazy about its products as Apple's fans are about theirs.

To that end, there's a ton of Nio merchandise available for purchase in the Nio House.

Everything from backpacks, water bottles, and phone cases ...

...to miniature cars and hats.

The biggest perk is the the "Joy Camp."

The Joy Camp is a children's play area where parents can drop off their kids to a supervised space so that parents can work in the Nio House undisturbed or even go shopping in the nearby area.

Users can also book the space for birthday parties, a pretty big benefit when you consider how small apartments in urban China can be.

Getting customers hooked on the Nio House is part of a broad bet that, by keeping users engaged, they can keep them coming back for model after model. Just like how Apple has done with each generation of the iPhone.

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