Since 5 years, the performance has begun to dive on a large scale. According to Gree’s 2015 financial report, Gree’s 2015 revenue was 97.745 billion yuan, a year-on-year decrease of 29.04%, and its net profit was 12.532 billion yuan, a year-on-year decrease of 11.46%.
In Dong Mingzhu’s view, the shrinking performance is the result of over-reliance on the air-conditioning category, and Gree has therefore started a diversification strategy. Gree began to experiment in many industries such as mobile phones, automobiles, and chips, but it failed to help Gree cultivate high-quality businesses like air conditioners. Until 2020, Gree’s air-conditioning business still accounted for 60% of revenue, while Midea’s air-conditioning accounted for only 46% and consumer electronics accounted for 38% in the same period.
Gree’s two most famous breakouts were probably in the mobile phone and new energy fields. After the Gree mobile phone was launched in 2015, the market received mediocre response. The third-generation Gree mobile phone released in March 2019 was also looked down upon by users due to its low cost performance. However, Yinlong New Energy, which carried the dream of “Ms. Dong” to build a car, collapsed due to defects in its core battery technology, and its market share once shrank to less than 1%. Backed by Gree, Yinlong New Energy eventually lost the battle due to insufficient core technology. It must be said that this is full of irony.
How will “Ms. Dong” innovate the dealer model that has a big tail?
While the attempt to develop a diversified business failed miserably, the situation of Gree Air Conditioning does not seem to be optimistic.
The epidemic in early 2020 has severely hit offline physical stores as an important channel for Gree’s innovation achievements. In the first quarter of 2020, Gree’s air-conditioning sales almost stagnated, and sales in the first quarter decreased by nearly 30 billion yuan.
The crisis Gree encountered at the beginning of 2020 made Dong Mingzhu realize that it would be too late to change. In order to save himself, Dong Mingzhu chose to personally stop the live broadcast, and reorganized the channel network through the live broadcast. From the previous offline model to Gree’s new retail model of “simultaneous online and offline sales and integrated service”. Even if the provincial agency dealers are unwilling, the channel transformation has become an irresistible trend.
Dong Mingzhu held 13 live broadcasts in 2020, with sales of 47.6 billion yuan. On 2020 Double 12, Gree’s 30 offline stores have launched a new retail pilot in Guangdong.
Although the performance of “Miss Dong” live broadcasts is good, as an important part of Dong Mingzhu’s live broadcast, offline dealers have different opinions.
Dong Mingzhu’s good results in live broadcast of goods are based on the traffic brought by offline dealers. Before Dong Mingzhu’s live broadcast, Gree’s offline dealers will organize discount activities, collect potential users’ WeChat, and promote Dong Mingzhu’s live broadcast room. When it comes to live broadcast, users will not only get a variety of coupons, Gree can also offer lower prices than dealers. The distributors are divided according to the channels through which users enter the live broadcast room.
Liang Zhenpeng, an analyst in the home appliance industry, believes that “Gree’s live broadcast is equivalent to Gree Factory