Gree was abandoned by dealers, all caused by live broadcast？ How does Gree survive the ＂middle-aged crisis＂ under difficult circumstances？

On August 23rd, many media reported that Xu Zifa, the chairman of Hebei Xinxing Gree Electric Sales Co., Ltd., the general distributor of Gree in Hebei Province, said in a recent event that he would no longer sell Gree products and turn to Philips. Gree Electric has recently stopped supplying Hebei dealers, and this news has been confirmed by many Gree dealers.

The above news was once on Sina Weibo Hot Search List.

Where is Xu Zifa, a rising star in Hebei?

Gree official website shows that the marketing company in Hebei is Hebei Shengshi Xinxing Gree Trading Co., Ltd. (hereinafter referred to as Hebei Shengshi Xinxing). It is understood that Xu Zifa, the party who defected, has been a core distributor of Gree for many years, and has also been on the board of directors of Gree Electric, and even been called an important "clique" of Dong Mingzhu by some insiders.

Hebei Xinxing, established in 2002, is a member of Hebei Guoao Investment Group, located in Shijiazhuang City, Hebei Province. It is a wholesale-oriented enterprise with a registered capital of 10 million yuan and its legal representative is Xu Zifa.

According to Zhongxin Jingwei, on June 24th this year, Gree Electric announced that Jinghai Internet Technology Development Co., Ltd. (hereinafter referred to as Jinghai Internet) reduced its shareholding by 110 million shares on the same day through block trading, accounting for 1.86% of Gree Electric’s total share capital, with a cash-out scale of nearly 3.5 billion yuan. After this reduction, Jinghai Interconnect holds 6.47% of Gree Electric shares, with a cumulative change ratio of 2.43%.

According to Gree Electric’s financial report, Jinghai Internet is its third largest shareholder, and its full name is Jinghai Internet Technology Development Co., Ltd., which was established on August 18, 2006. The shareholders of Jinghai Internet are 10 regional distributors in Gree Electric, including Hebei Gree Electric Marketing Co., Ltd. (hereinafter referred to as Hebei Gree), the protagonist of this incident, which holds the highest proportion of Jinghai Internet, accounting for 28%.

Tianyancha APP shows that Hebei Gree and Hebei emerging controlling shareholders are both Hebei Guoao Investment Group Co., Ltd.

Although Xu Zifa has a deep relationship with Gree Electric, the relationship between them is also drifting away. Some media reporters found out that Xu Zifa attended many Philips air-conditioning activities as a shareholder representative.

It’s all the live broadcast?

Gree, which has entered its 30 th year, coincides with the "eventful autumn" This is the 30th year of Gree’s establishment, and it is also the 10th year that Dong Mingzhu took charge of Gree as the chairman and president.

In the last two years, Gree has been making efforts to reform online channels, and Dong Mingzhu has personally left the market to bring goods to Gree air conditioners.

Dong Mingzhu is keen on live broadcast, and has also tasted the sweetness from it. According to the data, from 2020 to 2021, Dong Mingzhu’s nationwide live tour brought goods, and its cumulative sales exceeded 50 billion yuan. During the "618" period this year, the sales of Gree Tik Tok Live Matrix exceeded 40 million yuan. On June 18th, Dong Mingzhu continued to broadcast live until 12 o’clock in the evening. At present, the cumulative number of fans of three Tik Tok accounts, namely Pearl Feather Select, Pearl Feather Air Conditioning Live Room and Pearl Feather Ice Washing Live Room, has reached nearly 3 million.

In fact, a small live broadcast room also reflects the changes in the product layout and marketing channels of an enterprise.

Because online initiatives such as live delivery have caused dissatisfaction among Gree dealers. According to media reports, Dong Mingzhu once sold Gree Pinyue series air conditioners for only 1999 yuan on a live broadcast in JD.COM, and the agent’s delivery price was 2199 yuan, and the purchase price of last year even started from 3000 yuan.

Gree Electric’s 2021 annual report shows that Gree’s "New Retail" is based on 27 sales companies, more than 70 online dealer stores, more than 30,000 offline specialty stores, and the official flagship store of the third-party e-commerce platform, establishing a two-line sales network covering the whole country.

At the 2021 Annual General Meeting of Shareholders held in Gree Electric on June 7, Dong Mingzhu said: "In 1997, the home appliance market was engaged in a price war, and I created Gree’s marketing model. There has been little change for more than 20 years, but now the epidemic has accelerated the development of online model. Under this background, Gree’s marketing model needs reform."

"I have been doing live broadcasts for the past two years. The live broadcast is not that I want to do this market, but that I want to experience this market." Dong Mingzhu said. She also said that in 2021, the company’s sales changes did not meet expectations, and channel change was one of the influencing factors. "But the impact is not great, because in this process, it is more important to let everyone know. Dealers must gradually open physical stores and engage in live broadcasts. "

The controversial Gree Diversification

Diversification is Dong Mingzhu’s choice for Gree Electric.

In the past 30 years, Gree has become the leader of air conditioning, and the slogan of "Good air conditioning is made by Gree" and "Gree grasps the core technology" is well known. In the next 30 years, Dong Mingzhu said that she hoped that the public would remember "Good Electrical Appliances Made by Gree".

She predicted at a forum five years ago: "In the future, everyone will blow Gree’s air conditioners, use Gree’s mobile phones, eat rice cooked by Gree rice cookers and drive Yinlong (now it should be Gree Titanium) electric cars. This is the future."

In 2016, Gree officially announced the opening of diversification strategy and the transformation to a global industrial group. Today, Gree’s products are exported to more than 180 countries and regions, covering air conditioners, refrigerators, washing machines, water heaters, kitchen appliances and environmental appliances. The industrial field covers high-end equipment, precision molds, refrigeration equipment, motors, compressors, etc. The new energy field covers new energy vehicles, lithium batteries and industrial energy storage.

At the China Refrigeration Exhibition held in early August, Gree unveiled a variety of new products, from air conditioners to water purifiers and air purifiers, from intelligent equipment to new energy automobile parts, which attracted many exhibitors to stop for consultation, reflecting the diversified business development to some extent.

However, the controversy surrounding specialization or diversification always comes along, especially in the context that peers have begun to shrink non-core businesses and the proportion of business income other than Gree Air Conditioning has not increased significantly.

In Dong Mingzhu’s view, those businesses that seem unprofitable now have reasons to do it.

For example, the controversial Gree mobile phone, which Dong Mingzhu will use to broadcast live every day, is a product that she must adhere to in her diversified layout. "This is based on the planning of Gree’s entire home appliance layout, and the interconnection of home appliances is realized through Gree mobile phones."

Who will take over from Dong Mingzhu?

According to the Securities Times, not surprisingly, Gree Electric’s "Dong Mingzhu era" will continue for at least three years.

So, who will be Gree’s successor after Dong Mingzhu?

Gree’s trademark "Pearl Feather Boy" was successfully registered this month. However, many people found that Meng Yutong, a young secretary who once praised Dong Mingzhu, recently began to fade out of the Gree live room in a "low-key" way.

Earlier, Dong Mingzhu publicly stated that Meng Yutong should be "cultivated into the second Dong Mingzhu in the future", so that the latter’s popularity soared and he was labeled as "Dong Mingzhu’s successor".

However, recently, the Tik Tok account of Gree’s "Pearl Feather Boy Selection" was exploded to change its avatar, and the photo of Dong Mingzhu and Meng Yutong was removed and replaced with a single photo of Dong Mingzhu. Meng Yutong was suspected to have faded out of the live broadcast room.

(Tik Tok screenshot)

According to the analysis of insiders, from the actual situation, Meng Yutong, the "successor", is more like the "online celebrity with Goods" created by Dong Mingzhu to cooperate with the company’s online channel reform. Li Guoqing once commented that Dong Mingzhu pushed Meng Yutong, "the purpose is to bring goods for live broadcast, and to incubate online celebrity by himself". To take over Dong Mingzhu’s big stick, I’m afraid my ability is far from enough.

After all, the training of successors does not happen overnight. Huang Hui, the former second-in-command of Gree, trained in Gree for nearly 29 years, and Dong Mingzhu also worked in Gree for nearly 22 years before becoming the "number one". After all,Gree’s top-level handover is not only a simple personnel turnover, but also involves the inheritance of the whole enterprise in terms of system, organization and culture.

In 2022, Gree’s first quarterly report showed that Gree Electric achieved a total operating income of 35.26 billion yuan, a year-on-year increase of 6.24%; The net profit attributable to shareholders of listed companies was 4.003 billion yuan, a year-on-year increase of 16.28%. Compared with last year’s annual report, the performance in the first quarter obviously exceeded expectations.

Now that the company’s semi-annual report is disclosed soon, the market is quite concerned about Gree’s performance in the first half of the year.

Gree, 30 years old, is it a "middle-aged crisis" or another "thirty-year-old"? Dong Mingzhu, 68, will show Gree how to tell new stories, and time will tell.

Upstream news synthesis