author: Zhang Jinjing, editor: Ma Yue, title figure from: Vision China
“Gree should focus on offline, open more specialty stores, and even open stores in the community.”
During the two meetings in 2019, Dong Mingzhu, who had just been chairman of Gree Electric for two months, once said so decisively.
And on the eve of the upcoming National Two Congresses in 2020, Dong Mingzhu has completely embraced live streaming, indicating that the future live streaming may be normalized.
Dong Mingzhu’s 180 degree turn towards online attitude, why? Because the live broadcast brings goods, it’s so sweet!
On April 24, Dong Mingzhu premiered his first vibrato, and the picture was stuck from beginning to end. The content arrangement, which is like an interview and like bringing goods, is not attractive. The final sales are only 232,500 yuan, which is not as good as the sales of single products of Luo Yonghao, which is also live broadcast on Douyin that day.
The person in charge of the live broadcast was scolded by Dong Mingzhu for this, but it was not Dong Mingzhu’s style. After half a month, Dong Mingzhu started the second live broadcast with the resources and capital quickly poured in, the first 30 minutes of sales The amount has already broken 100 million, and finally harvested 310 million sales, fighting a beautiful turnaround.
Two days later, Dong Mingzhu started broadcasting on JD.com, and the live broadcast ended at 11:20 in the evening. The turnover exceeded 703 million yuan, setting the highest transaction record in the history of live broadcasting in the home appliance industry.
The climax occurred on June 1st Children’s Day. According to Tiger Sniff, Gree’s live broadcast activities on that day attracted 6.54 billion yuan, setting a record for the home appliance industry’s live broadcast sales. Single-day sales accounted for Gree’s first quarter revenue this year class=”text-remarks” label=”Remarks”>(20.396 billion yuan)of32%.
The live broadcast brought goods so powerfully, and then look at the offline stores of Mencora affected by the epidemic. Even if the dealers have any ideas, Dong Mingzhu can’t take care of them.
“I’m actually searching for more than 30,000 Gree dealers.” In the eyes of Dong Mingzhu, Gree can’t throw away the existing dealer team on the line, “We have more than 30,000 dealers and millions of Dealer employees, if we go all the way across the line, then we now face the unemployment of the job that 1 million people will face.”
However, Dong Mingzhu was silent for a while and then said that he was not afraid of other ideas of the dealer.
One
Green, a major shareholder of Gree, is the leader of traditional enterprises entering the online market.
On November 5, 2019, Gree Electric established Gree E-Commerce Co., Ltd. with a registered capital of 100 million yuan. Dong Mingzhu personally took the post as the legal representative.
This is seen as Zhang Lei’s first move to push Gree towards e-commerce after finalizing its shareholding in Gree.
On the evening of November 9th, four days later, Gree Electric announced that it would make a profit reduction of 3 billion yuan on the day of Double Eleven. Then Midea, Haier, and Oaks joined the war, and the air-conditioning price war broke out.
Compared with the strategy of focusing on offline and not customizing online activities, Dong Mingzhu’s “abnormal” behavior is really incredible without Zhang Lei’s vigorous promotion.
In 2017, Gao Lian Capital spent a huge sum of money to acquire Belle in its entirety, depriving it of privatization. Amazingly, as the trader Zhang Lei, it took only two years to completely transform Belle Shoe City into a new type of business enterprise combining online and offline, and in 2019, the split Belle International business was re-launched on the capital market. .
At the beginning of the listing, the market value of the split business exceeded the amount invested by Zhang Lei’s privatization of Belle, which is a classic in the investment world.
In an interview with the media, Zhang Lei once analyzed the entire process of Gaolian Capital’s transformation of Belle Shoes City.
In his view, if BAT is regarded as technological innovation 1.0, the transformation of Belle Ctrip is the combination of Internet thinking and offline real economy. “The so-called technological innovation 2.0 is not the Internet for the real economy. It’s + the Internet.”
Belle has established a complete set of big data management system, through the analysis of the consumer behavior of each store to confirm the hot and slow-selling shoes, and make adjustments.
Zhang Lei believes that offline stores should be the tentacles of the entire e-commerce system, rather than competing with the online marketing system.
Belly has developed a series of offline digital tools around the operation of store employees. Each store employee can access all the products of the entire e-commerce platform to sell offline; and the products that online customers are looking for can also choose the nearest store Try it on.
This is the core of Zhang Lei’s proud digital transformation of Belle Shoes City.
For the Gree e-commerce transformation with live streaming as the core, Zhang Lei’s “Internet +” traditional entity enterprise e-commerce transformation theory is obviously very useful.
Two
However, judging from Dong Mingzhu’s various speeches on live broadcasting, she is still extremely entangled.
The channel dealer is Dong Mingzhu’s “basic dish”. In 2012, it was their unrelenting support that allowed Dong Mingzhu to overcome the Zhuhai State-owned Assets Supervision and Administration Commission and secure the position of Gree Electric Chairman.
Dong Mingzhu has always formulated Gree’s sales strategy, taking into account the interests of distributors. After 2016, Gree began to test the water line. Dong Mingzhu’s principle: Online sales are for offline distributors Performance service.
“Gree’s air conditioners are sold online without after-sales. All installation and after-sale services are handled by local distributors, and the amount sold is also counted as the performance of local distributors. Liang Zhenpeng, an analyst in the home appliance industry, introduced this when he was interviewed by the media.
“All the time, many e-commerce platforms want to cooperate with Gree, and ultimately need to get the goods from the dealers under Gree.”
The main reason for this situation is that Dong Mingzhu has established a huge and complicated channel management system in order to protect the interests of distributors at all levels.
Gree dealers take the goods according to the plan, pay the goods first, then sell them, and then enjoy the sales rebate and year-end commission. The advantage of this operation is that the enthusiasm of dealers is greatly mobilized, and Gree no longer has to set up commodity warehouses in various places. After the various products are produced, they are sent directly to distributors at all levels, who will solve the storage and sales problems of Gree products.
In addition, due to the importance of dealers to Gree, Dong Mingzhu also deliberately bundled a deep interest between the dealer group and Gree.
In 2007, Hebei Jinghai Guarantee Investment Co., Ltd., which was jointly established by 10 Gree Electric Regional Distribution Companies, obtained a 10% stake in Gree Electric. Until today, Hebei Jinghai Guarantee Investment Co., Ltd. is still Gree Electric’s The three largest shareholders hold 8.91% of the shares.
This means that Dong Mingzhu’s Gree Electric Appliances and distributors have formed a deeply bundled interest community. Now, however, this community of interests has become the biggest obstacle to Gree’s march.
In the eyes of experts, the annual sales volume of air conditioners in the country is a constant amount. If one more air conditioner is sold online, the offline dealers will have less market space for one air conditioner. Moreover, air conditioning is not an electronic product that needs to be replaced frequently, which itself limits the imagination of the domestic air conditioning market.
This leads to a dilemma for offline distributors: if you ship at a discounted price online, you will definitely be compensated; if you do not ship at a discounted price online, you will rush all consumers online.
However, live broadcasts are so fragrant, and offline is not good. If you don’t do online, isn’t that a dead end?
The reality may not be that simple.
As Zhang Ruimin, chairman of the board of directors of Haier Group, said, Live streaming is essentially a price war.
“The lowest price in the whole network” is the biggest incentive to drive the crowd to place orders, and this lowest price in the whole network requires Gree and the live broadcast platform to “bleed.”
The Gree and live broadcast platforms have obtained sales and traffic through “bleeding”, but this “subsidy” gameplay is unsustainable. The problem is that more than 30,000 offline distributors of Gree cannot enjoy such subsidy effects when they do live broadcasts and bring their own goods.
In addition, Dong Mingzhu is a member of the current Internet celebrity, and she does bring her own traffic. The more than 30,000 distributors she wants to inspire are mostly not Internet celebrities. Now such attention and platform traffic.
After all, the live broadcast platform was not opened by Gree’s own home. It’s okay to do a live image for Dong Mingzhu. Every day, Gree’s dealers live to occupy the C position of the platform, which is unimaginable for platforms such as Douyin and Kuaishou.
So Dong Mingzhu now put forward the idea of using live broadcast as a new round of breakthrough for Gree Online, which is actually not optimistic.
Three
Although Dong Mingzhu is already an expert, he has spared no effort to publicize and promote Gree to enter the line, but from the perspective of production organization, Gree is not yet fully prepared to go online.
Dong Mingzhu’s current live-streaming goods only do some sales work relying on online tools at the marketing level, does not involve systematic adjustments, and the goal is more to clear inventory.
In recent years, Gree SalesIn order to complete the annual performance, the department kept pressing the goods to the dealers. According to media reports, many Gree dealers have not yet sold out the crushed goods in the first half of 2019, and the cost pressure is enormous. Dong Mingzhu’s active live streaming and delivery of goods can receive the effect of digesting inventory as soon as possible and withdrawing funds for the channel. In this sense, Dong Mingzhu still has true love for his basic plate.
Another benefit of live streaming is that Dong Mingzhu’s personal brand has been strengthened.
Dong Mingzhu’s own online personal brand “Dong Mingzhu’s store” opened in 2019, achieved sales of nearly 700 million, and has gradually become the core of Gree’s online e-commerce system. This time, with the help of the Internet celebrity effect that he had in the past, Dong Mingzhu happily adopted the cross-border live-streaming agency method of cooperation with the platform to achieve a new round of escalation of his personal brand.
But these methods can only cure the symptoms but not the root cause.
Like Zhang Lei’s successful transformation of Belle Shoe City, a successful Internet plus traditional industry case is based on the acquisition and analysis of market dynamic big data to establish a set of dynamic production systems that meet the e-commerce development laws and needs. It can be adjusted at any time according to the trend of customer orders.
The current Gree does not have such a shadow of a production system that meets online demand.
After all, after more than ten years, after Dong Mingzhu designed and perfected Gree’s operating system that relies on dealers as the main sales channel, benefiting from the dealer’s first-hand, second-hand sales approach, Gree has not changed its planned Production system.
Relevant experts introduced that Currently, Gree’s production plan still uses quarter as the adjustment timeline, which means that let alone changing by day, changing production plan by week is almost not in the current Gree. may.
And this may be the core factor that really restricts Gree’s embrace of online e-commerce.
Imagine that if there is no dynamic production capacity like tide, once the current inventory is digested, and when online e-commerce immediately floods a large number of orders, how can the current Gree meet the needs of consumers?
As Gree’s best competitor in the air-conditioning field, Midea relied on the continuous investment and construction of a complete set of digital production system to gain a leading position in the air-conditioning online e-commerce market.
According to Aowei Cloud data, its home air conditioner products reached 30% online market share in 2019, ranking first. It is precisely because of such a set of online-oriented marketing system and production model that even in the first quarter of 2020, the entire industry has experienced a serious decline, Midea has also handed in a perfect answer.
According to the financial report, Midea realized operating income of 58.813 billion yuan in the first quarter, far higher than the 20 billion yuan realized by Dong Mingzhu and Gree. If this trend continues for a whole year, Midea’s annual turnover exceeding Gree for two consecutive years is a high probability event.
Dong Mingzhu does not want to build such a digital production system, but once such a system starts to be established, Gree will have to greet a brutal change. Is Dong Mingzhu, who has just solved the problem of property rights, ready? Maybe she couldn’t answer.
Reference materials:
“Dong Mingzhu’s “Channel Variations”” Understanding Notes May 2020
“Dong Mingzhu put down her body and Gree embraces e-commerce” Computer News May 2020
“Burn 3 billion, Gree e-commerce just looks beautiful” Bowang Finance November 2019
“Dong Mingzhu talks about live streaming and bringing goods, and giving up offline will make millions of people unemployed” People’s Daily May 2020
author: Zhang Jinjing, editor: Ma Yue, title figure from: Vision China