撰写
China News Service client side Beijing, November 20 (Zuo Yukun) Speaking of the three giants of domestic home appliances, Midea, Haier, and Gree are the first reactions of many people. Especially Gree Electric Appliances, under the leadership of the fiery "Miss Dong" Dong Mingzhu, Gree Electric Appliances has taken a path full of attention.
Data map: Dong Mingzhu. China News Agency reporter Luo Yunfei, photo
However, during this year’s "Double 11" shopping festival, Gree, who has never been willing to keep a low profile, was upstaged by another company. This company is at the helm of no one else but Lei Jun, the founder of Xiaomi who has "deep grievances" with Dong Mingzhu.
"Old hatred" adds "new hatred", "Miss Dong", how to calculate this account?
Mixed "Air Conditioning Top"
On November 12, Gree released the "11.11" battle report, playing the label of the first sales of air conditioners on the whole network: During the "11.11" period, JD.com air conditioner self-operated stores & POP stores and Tmall air conditioner stores ranked first in sales, and its own e-commerce platform "Gree Dong Mingzhu Store" also achieved sales of 410 million yuan during the "11.11" period.
Gree 11.11 part of the battle report. Picture source: Gree Electric official Weibo
For Dong Mingzhu, the chairperson and president of Gree Electric Appliances, who once said domineering in 2018, "I am the boss of the world in air conditioning, and how old is beauty?", air conditioning has always been the trump card of Gree Electric Appliances.
Dong Mingzhu’s confidence does not come out of thin air. According to the 2019 annual report of Gree Electric Appliances, according to the data released by "HVAC Information", Gree Central Air Conditioning has firmly established itself as the leading position in the industry with a market share of 14.7%, achieving the "eight consecutive championships" in the domestic market; according to the data released by the Japan Economic News Agency in 2019, Gree Electric Appliances ranked first in the field of household air conditioners with a global market share of 20.6%.
It is a happy event for Gree to maintain the position of the air conditioner leader in the largest consumption season of the year. You know, under the influence of the epidemic, the air conditioner industry has just experienced a "coldest year". According to data from Orville Cloud Network, from January to July 2020, the retail volume of China’s air conditioner market was 99.10 billion yuan, a year-on-year decrease of 27.7%.
But the joy didn’t last long, and a bigger problem was in front of Gree Electric Appliances. And this time, it was Lei Jun, who had a "billion bet" with Dong Mingzhu before.
"Billion" feud, seven years is not too late
"This is Xiaomi’s best result since participating in Double 11!" In the "Double 11" letter issued by Xiaomi CEO Lei Jun, the beaming atmosphere was palpable.
From November 1st to 11th, Xiaomi mobile phones won the first place in the cumulative sales of Tmall, JD.com, and Suning.com Android mobile phones, and returned to the third place in the world in mobile phone shipments after a lapse of six years. While the mobile phone business is impressive, during the "Double 11" period, the cumulative total sales of Xiaomi’s new retail all channels in China exceeded 14.30 billion yuan.
Good results bring good rankings. According to the Wukong List data of Suning.com, as of 21:00 on November 11, the cumulative list of overall brand sales of home appliances (October 21-November 11), the top three brands are Midea, Haier and Xiaomi, and Gree Electric Appliances is ranked fourth after Xiaomi.
In JD.com’s "11.11" global home appliance rankings, although Gree Electric Appliances overtook Xiaomi at the last minute to retain the top three seat, compared with Midea and Haier’s far ahead, the "Flower Exploration" competition has been quite intense, and even during the day on the 11th, Xiaomi was still ranked ahead of Gree Electric Appliances.
Image source: JD.com.
When it comes to the "fight" between Gree Electric Appliances and Xiaomi, one has to mention the "billion bet" between Dong Mingzhu and Lei Jun.
It was at an awards ceremony at the end of 2013. Dong Mingzhu and Lei Jun, who were both selected as economic figures of the year, engaged in a war of words over the different development models of the Internet and new retail. Lei Jun proposed that if Xiaomi’s turnover exceeds Gree within five years, Dong Mingzhu will lose to Lei Jun by 1 yuan; Dong Mingzhu responded on the spot "impossible" and said "if you want to bet, you can bet 1 billion".
In five years, Gree Electric’s revenue rose from 120 billion yuan to 198 billion yuan, an increase of 60%; Xiaomi rose from more than 20 billion yuan to 174.90 billion yuan, an increase of nearly 8 times. Although the "bet" ended in Xiaomi’s narrow defeat, it is quite dramatic that in the second year after the dust settled, Xiaomi’s revenue exceeded Gree Electric.
In this way, the flip of the "billion bet" seems like a metaphor for Gree’s abdication of the "Double 11".
Adversary’s Warning
"It is a diversified and technology-based global industrial group with three brands: Gree, TOSOT and Jinghong. Its industry covers four major fields: HVAC, household appliances, high-end equipment, and communication equipment." Gree Electric once introduced itself in its annual report.
But in fact, Gree’s goal of "diversification" does not seem to be progressing smoothly.
According to the "China Home Appliance Market Report for the Third Quarter of 2020" released by the China Electronics Information Industry Development Research Institute, in 2017-2019, the revenue of Gree Electric’s air-conditioning products accounted for 83.22%, 78.58% and 69.99% respectively.
From the data point of view, the air-conditioning business occupies the absolute dominance of Gree Electric’s revenue. While maintaining the air-conditioning trump card, Gree seems to be trapped in this trump card.
Gree Electric’s 2020 third quarter report shows that Gree Electric’s third quarter revenue 56.387 billion yuan, down 2.35% year-on-year; net profit attributable to shareholders of listed companies 7.337 billion yuan, down 12.32% year-on-year.
While Gree Electric still maintained the decline in the first half of the year, Midea and Haier have gotten rid of the impact of the epidemic, not only the single-quarter revenue and net profit in the third quarter turned positive, but also achieved significant growth.
One decrease and one increase reflect the different development paths of the three leading white goods companies. Some industry analysts believe that the main reason for Gree’s lack of recovery momentum is its over-reliance on a single air conditioner product.
"Gree Electric Appliances has long been focused on the air-conditioning market, and the rest of the products have dabbled in it, but the market share is average; Haier is making efforts in major appliances, and at the same time has made a high-end line represented by Casarte; Midea is all products related to home appliances, basically participating. In this regard, it is very similar to the big dark horse of the’Double 11 ‘- Xiaomi Group."
Data map: Lei Jun. Photo by Hou Yu, a reporter from China News Agency
If the label of Gree Electric Appliances is "selling air conditioners", then Xiaomi has always been considered a "mobile phone seller" before. However, compared with Gree Electric’s difficulty in maintaining its position as the industry leader, Xiaomi is gradually realizing its main business and other consumer products.
According to Xiaomi’s first quarter earnings report this year, Xiaomi’s IoT (Internet of Things) and consumer products revenue is 13 billion yuan, which has accounted for nearly 30% of Xiaomi’s revenue and has become an important support for Xiaomi to get rid of "mobile phone dependence".
This also led Lei Jun to announce in an internal Xiaomi letter in August that in the next decade, Xiaomi’s core strategy will be upgraded to "mobile phone × AIoT". Under this "multiplication effect", the AIoT business should become the catalyst and accelerant of the mobile phone business, penetrate more scenarios, win more users, obtain traffic and data, and become the moat of Xiaomi’s business model.
"Miss Dong" who let go
The old rival Midea and the new enemy Xiaomi have achieved gratifying results on the road of all-round development, and the "Iron Lady" is also inevitably moved.
On November 17, at a press conference attended by Dong Mingzhu, the "billion bet" was mentioned again. Miss Dong, who refused to admit defeat, stressed that "our bet period is 5 years, and with 5 years as the limit, or Gree won". At the same time, she also relaxed that Gree Electric Appliances will actively embrace the Internet and use the technology of the Internet to make manufacturing enterprises even more powerful.
The air conditioner installation engineer is installing the air conditioner. Photo by Zhang Yun, a reporter from China News Agency
Some industry experts have pointed out that although offline channels have been one of the strongest driving forces for the development of Gree Electric Appliances in the past ten years, most of its business relies on offline channels, and walking on one leg is obviously not conducive to coping with the impact of uncertainty, especially in recent years. Online shopping habits have become more and more deeply penetrated, and not paying attention to online channels has obviously had a greater impact on its performance.
The third quarterly report of Gree Electric Appliances shows that since the epidemic, Gree Electric Appliances has been actively carrying out live broadcast with goods. According to public data, as of October 18 this year, Dong Mingzhu has accumulated 11 live broadcast with goods, and Gree Electric Appliances’ live broadcast sales are about 42.589 billion yuan. About 33.4% of Gree Electric Appliances’ revenue of 127.468 billion yuan in the first three quarters of 2020.
Dong Mingzhu’s small step into the live stream has become a big step for Gree Electric to step out of its comfort zone. But to ease the dilemma of a single category, Gree Electric still has a long way to go.