Wen; Wall Street Tech Eye Leon
Editor: CC Sun Congying
There is nothing new under the sun, and Dong Mingzhu, chairman of Gree Electric Appliances, has fired at Xiaomi again.
At the 2023 Annual General Meeting of Shareholders of Gree Electric Appliances held recently, Dong Mingzhu once again challenged Xiaomi: "Xiaomi said that it (air conditioner) ranked first, and it all depends on other manufacturers to make products, what is your technology?" Who is the first, consumers have rod scales in their hearts. ”
Subsequently, some media contacted Xiaomi, but Xiaomi did not comment. Until the evening of July 19th, when Lei Jun explained Xiaomi's new air conditioner at Xiaomi's press conference, he responded in the air: "During this time, Sister Dong has been criticizing us, saying that we are 'impersonating' the first (air conditioner)." I checked carefully, we have no one, and we have not said on any occasion that our Mijia air conditioner is the first. ”
"I checked carefully, in the first half of this year, we ranked fourth, and the gap between us and Gree is still very far, so it means that we still have a lot of room for improvement, and we must continue to learn from Gree." Lei Jun added.
The whole incident is actually an oolong. On June 25, Gree Wen posted on Weibo that he had paid attention to an article titled "China's air conditioning market "shuffle", Gree fell out of the top three, and the new dark horse was actually a "layman"? and report to the relevant departments. In fact, this is an article concocted by a certain self-media out of context, not from Xiaomi's official propaganda channels.
From the perspective of sales volume, the industry online monitoring shows that Gree will sell nearly 30 million air conditioners in China in 2023; Xiaomi's 2023 annual report gives the data of air conditioner shipments of 4.4 million units, which is not an order of magnitude at all.
Gree Electric Appliances and Xiaomi, which are two companies with different tracks, one is a veteran air conditioner manufacturer, and the other is a technology company that started with mobile phones and focuses on 3C/IoT and even car manufacturing, why are they always "bundled business"? It all started back in 2013.
From the "1 billion gambling contract" to the narrow road meeting
In 2013, Dong Mingzhu and Lei Jun attended the "China Economic Person of the Year" award ceremony, Lei Jun joked that if Xiaomi's revenue exceeds Gree within 5 years, Dong Mingzhu will lose 1 yuan to himself. Dong Mingzhu responded strongly: "If you want to bet, bet one billion!" Soon, the "1 billion bet" between Xiaomi and Gree became the hottest topic in the technology circle.
Lei Jun once talked to the media about this incident: "At that time, the choreographer and director said to the two of them backstage, can it be more lively? I said yes, make a bet with Dong Mingzhu, and bet one yuan. But as soon as Dong Mingzhu came on stage, he said that he would bet 1 billion yuan, and I was blinded at the time, why didn't Mr. Dong follow the script! ”
Since then, Dong Mingzhu and Lei Jun, Gree and Xiaomi have been "tied" to a certain extent. "As long as Dong Mingzhu and I appear, the media will all stare at us and take pictures." Lei Jun said.
Although the "1 billion gambling contract" is more like the on-the-spot play of the two marketing masters, netizens took it seriously and kept calculating the gambling contract period for the two companies. In 2018, Gree Electric's revenue was 200.024 billion yuan, while Xiaomi Group's was 174.9 billion yuan, and Lei Jun admitted defeat.
The matter is not over yet, Dong Mingzhu said that he does not want 1 billion yuan, and he wants to bet with Xiaomi for another five years. However, Dong Mingzhu may not have expected that the situation would soon usher in a "reversal". In 2018, Xiaomi officially entered the air conditioning market, and at the end of the year, it launched its first washing machine, officially entering the white goods market. In the following year, Xiaomi Group surpassed Gree Group (198.153 billion yuan) with a total revenue of 205.8 billion yuan.
At this point, Dong Mingzhu's attitude towards Xiaomi has also changed from the previous "welcome competition" with a sense of superiority to a public Diss, and has repeatedly complained that Xiaomi air conditioners rely on OEM and have no core technology. Even in a media interview, Dong Mingzhu bombarded Midea and Xiaomi as "thieves".
This year, Gree Electric also sent Mijia ecological products to court. On July 9, Gree Wen released a message on Weibo, claiming that the Mijia Xiaomi electric fan sold in Xiaomi's official flagship store infringed the patent of Gree Electric Appliances in BPTS01DM, and the Guangzhou Intellectual Property Court sentenced the other party to compensate Gree Electric Appliances 1.85 million yuan.
Subsequently, a spokesperson for Xiaomi responded on the official WeChat: After investigation, our company has not received any lawsuits related to environmental appliances. It is reported that the object of Gree's lawsuit is the fan manufacturer "Zhejiang Xingyue Electric Co., Ltd." [which has been renamed Dream Maker (Zhejiang) Technology Co., Ltd.], while "Tianjin Jinxing Venture Capital Co., Ltd.", which is 100% controlled by "Xiaomi Technology Co., Ltd.", holds 8.0439% of the equity of "Dream Maker (Zhejiang) Technology Co., Ltd."
In fact, Dong Mingzhu's change in attitude towards Xiaomi is easy to understand - Xiaomi moved Gree's cake. In 2023, the revenue gap between Gree Electric Appliances and Xiaomi Group will be more than 66 billion yuan, and at the same time, Xiaomi's air conditioner market share will be the fourth in China, and the online share will be close to Gree.
On the other hand, Gree Electric not only failed to achieve the goal of "2023 revenue of 600 billion yuan" set by Dong Mingzhu, but the core business of air conditioning has also been continuously impacted. (For details, see: Gree Electric's revenue broke 200 billion again, returning to the level of 2018).
Anxiety of not being able to place: air conditioners are no longer sold in China
Behind Dong Mingzhu's strong targeting of Xiaomi, there is actually anxiety that cannot be placed.
According to the data of Aowei cloud network, the retail sales of the domestic white electricity market in the first half of the year were 231.9 billion yuan, a year-on-year decrease of 7.0%; The retail sales volume was 77.74 million units, a year-on-year decrease of 3.6%. The reasons include the downgrade of consumption and the sharp decline in the price of air conditioners, which has caused the overall market to show the characteristics of both downward structure and price.
Among them, from January to May, domestic air conditioning shipments were 4,566 units, a year-on-year increase of 10.8%; However, production has declined since June, and since July, production has only been 9.03 million units, a year-on-year decrease of 12.5%.
In addition, weather conditions are also one of the reasons why air conditioning sales are less than expected. Aowei cloud network believes that this year's mainland climate presents a drought situation in the south and north, and the main sales area of air conditioning represented by Guangdong, Guangxi, Jiangxi, etc. has continued to rain and even frequent floods since April, so the sales volume in the first half of East China, Central South and Southwest China have declined year-on-year. As for North China and Northeast China, although there were occasional hot weather, sales expectations were not released, and only Northwest China achieved year-on-year growth. (For details, see: The high temperature is unbearable, and the money bags of air conditioning companies are bulging first)
Contrary to the domestic market, under the condition of global warming, the demand for overseas air conditioning market has surged, and the export of air conditioning has shown a clear growth trend. According to the data, from January to May, the export output of air conditioners increased by 33% year-on-year, and in June, it reached an astonishing year-on-year increase of 50.5%.
In fact, going overseas with home appliances has become an important strategy for major enterprises, and representative companies include Haier, Midea, Hisense, etc., of which half of Haier Smart Home's revenue in 2023 comes from overseas markets. However, Gree Electric's overseas revenue in 2023 will only be 24.904 billion yuan, accounting for about 12% of the total revenue. (For details, see: Taking the lead in the African market, Haier Smart Home invested 1 billion yuan.)
In terms of brand market share, based on the market data of Aowei Data Compass from June 3 to June 16, the market share of Gree air conditioner in the domestic online market is about 23%, Midea is about 21%, and Xiaomi is about 15%; In terms of offline, Gree's market share is about 30%, Midea's is about 30%, and Haier's is about 12.5%.
To sum up, the domestic air conditioning market in 2024 will be full of challenges, and it will face greater growth pressure in the second half of the year. In this case, the overseas market has become the main battlefield for growth, but Gree's international influence is obviously inferior to that of brands such as Haier and Midea.
Therefore, Dong Mingzhu in the face of the main domestic competitors Midea, Xiaomi, naturally to continue to output in public opinion to occupy the commanding heights, highlighting the marketing focus of "Gree air conditioning to master the core technology".
Let go of the knot and solve the crux of the problem
Can exogenous pressure be transformed into endogenous motivation? In fact, Gree wants to make breakthroughs in two aspects. The first is to find a stable second growth curve as soon as possible.
In 2023, 151.217 billion yuan of Gree Electric's 205 billion yuan revenue will come from the air conditioning business, accounting for more than 73%. In the case of market saturation and limited growth, Dong Mingzhu is expected to put the growth point in the field of ice washing. She said at the shareholders' meeting: "Air conditioning is a housekeeper, and it must be done at its best. The growth point is in the refrigerator and washing machine. ”
In May this year, Gree Electric announced that Living Home was independent from the air conditioning business, and held a dealer conference in Luoyang, Henan Province, to vigorously enter the ice washing market. In mid-June, it cooperated with Jingdong to hold a live broadcast event, and Dong Mingzhu personally led the audience to visit Gree Chengdu washing machine production base to build marketing momentum
However, the domestic ice washing market has long been a red ocean, and there are few incremental markets, and the ice washing products previously launched by Gree Electric Appliances have no sense of existence. In 2018, Gree Electric won all the shares of Jinghong Electric and entered the refrigerator market. At present, Gree Dong Mingzhu store is selling Jinghong double-door, three-door, multi-door and other models, with prices ranging from 1999 yuan to 9099 yuan.
According to the retail data of home appliances of Aowei cloud network, Haier occupies 30.59% and 23.17% of the market share in the online and offline markets of domestic refrigerators respectively; Midea and Rongsheng are ranked second and third respectively. Among them, Xiaomi ranked sixth in the online market, and Gree refrigerator did not make the list.
In terms of washing machines, according to the data of the market research agency in 2023, Haier, Midea, and BSH have won the top three washing machine market shares in China, and there is still no Gree. Similar to refrigerators, there are also multiple washing machine models on the official website of Gree Electric Appliances, with as many as 10 series.
Referring to Gree Electric's 2023 financial report, the revenue of household appliances was nearly 4.002 billion yuan, a year-on-year decrease of 12.13%, accounting for 1.96% of the total revenue, and the volume was extremely small.
Industry experts believe that the strategy of Gree Electric's transformation from air conditioning to all categories of household appliances is a long-term layout. First of all, although the threshold of this market is not high, but there are many giants and fierce competition, due to the small volume itself, Gree may be able to usher in more obvious growth in the early stage, but it is still unknown how much market share it can win.
Strictly speaking, the ice washing business, which also belongs to white electricity, is not Gree's second growth curve, but the new energy, industrial products, and intelligent equipment businesses led by Gree Titanium are.
At this year's general meeting of shareholders, investment institutions asked whether Gree's losses would increase in the future, and Gree responded that it had little impact on Gree's main business, accounting for only about 2% of its revenue. In terms of industrial products, the revenue in 2023 will be 10.003 billion yuan, a year-on-year increase of 31.63%, and the operating income will account for 4.90%.
The second is that the channel reform is blocked. When the reform of the air-conditioning channel has not yet been fully completed, Gree Electric announced that it will set up an independent household appliance sales company in each province in China, independent of the air-conditioning channel, which is almost the first reform of Gree's offline channels that year. (For details, see: Can Gree regain the top spot in the air conditioning industry?) ）
When announcing this decision, Dong Mingzhu said that Gree Electric will uphold the principle of "not letting dealers do loss-making business" and establish closer cooperative relations with dealers. However, only half a year ago, Dong Mingzhu also instructed Wang Ziru to drastically reform the air-conditioning channel, including the cancellation of provincial agents, the implementation of the Gree cloud network batch purchase model, etc., resulting in some general agents and medium-sized agents switching to the United States. (For details, see: Wang Ziru, Gree gave you his life!) ）
Now, Gree needs to vigorously develop household appliances such as ice washing, and needs offline channels to help Gree gain market share in the early stage. For online dealers, there will be concerns: once the success of the air conditioner is replicated, will Dong Mingzhu "cross the river and tear down the bridge"? With the lessons of the past, will dealers buy it?
The above two major problems reflect the vacillation of Dong Mingzhu and the senior management of Gree Electric Appliances in determining the future development direction of the company. Other white power giants have found their own advantageous areas, such as Midea's ToB business, Haier Smart Home's overseas market, etc., while Gree is completely refined. Instead of frequently attacking Xiaomi, Dong Mingzhu should let go of his knot and plan for the future of Gree Electric Appliances in his short tenure.