Without a successor, Gree only has “Pearl Selection”

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Text / Dongli

Source/Bohu Finance (ID:bohuFN)

Recently, the Douyin account of Gree’s “Mingzhu Yutong Featured” was exploded, and the avatar was changed. The group photo of Dong Mingzhu and Meng Yutong was removed and replaced with a single photo of Dong Mingzhu. Meng Yutong was suspected of fading out of the live broadcast room. It is understood that Meng Yutong has been broadcasting live on this account since March this year, accumulating more than 2.3 million fans. Therefore, many netizens feel puzzled, and even bluntly say that it means “removing the grind and killing the donkey”.

Looking at the live broadcast records of the past few months, the “handover” of the protagonists in the live broadcast room actually has a clue. Among the live video clips released by the Douyin account of “Mingzhu Yutong Selection”, the live video clips about Meng Yutong have been decreasing month by month since April, while the frequency of Dong Mingzhu’s appearance in the live broadcast room is increasing. At the end of March, Dong Mingzhu participated in the interaction in the live broadcast room. In June, the number of live broadcast clipping videos about Dong Mingzhu increased to about 20, and there were 11 in July.

In response, Meng Yutong said, “As the secretary to the chairman, I have other work to deal with on a daily basis.”

In 2021, 22-year-old Meng Yutong was appreciated by Dong Mingzhu, chairman of Gree Electric Appliances, for participating in the reality show “We Are New to the Workplace”, and then joined Gree as the secretary of “Dong Zong”. It didn’t take long for Dong Mingzhu’s remarks to “I hope to train her to become the second Dong Mingzhu in the future” by my side, and then label Meng Yutong as “Dong Mingzhu’s successor” and “the second Dong Mingzhu”. .

However, within a year of joining the job, Meng Yutong was fired due to his out-of-shape body, suspected poor performance, and fading out of Gree’s live broadcast room. Netizens frequently discussed rumors that Meng Yutong, a top student from Zhejiang University, did not live and work in Gree after joining Gree. as radiant.

Meng Yutong, a “chess piece” of Dong Mingzhu

Dong Mingzhu will play chess from business. Since joining Gree in 1990, Dong Mingzhu has gradually transformed from an inconspicuous salesman to today’s “Dong Zong”. With Gree, she has undergone several transformations and “business battles” large and small. In the autobiography “Chess Playing the World” and “Playing Chess Without Regrets”. When Dong Mingzhu became Gree’s successor in 2012, Gree’s transformation did not stop.

With the outbreak of the epidemic in 2020, Gree Electric’s profit in the first half of the year was nearly halved. In the first half of 2020, Gree achieved a total operating income of 70.602 billion yuan, a year-on-year decrease of 28.21%; net profit attributable to the parent was 6.362 billion yuan, a year-on-year decrease of 53.73%. On the other hand, Midea, which has mature online sales channels, achieved a sales scale of more than 86 billion yuan on the entire network that year, an increase of more than 25% year-on-year, ranking first in all online home appliance categories. Thanks to this, Midea’s annual performance has also achieved growth against the trend. , the revenue exceeded 285.7 billion yuan, a year-on-year increase of 2.27%; the net profit attributable to the parent was 27.223 billion yuan, a year-on-year increase of more than 12%.

The epidemic has also pushed the live broadcast to a new craze. At that time, Luo Yonghao was making a friend in the live broadcast room to bring goods to pay off debts. The live broadcast debut on April 2, 2020 broke 110 million yuan in 3 hours, and the live broadcast became a success. With the “new outlet”, entrepreneurs who used to only operate behind the scenes came to the front of the stage to live broadcast, such as Xiaomi Lei Jun, Ctrip Liang Jianzhang, New Oriental Yu Minhong, Netease Ding Lei, etc. At the same time, it also includes Dong Mingzhu, who is worried about the decline in Gree’s revenue. .

In order to save the plummeting performance, Dong Mingzhu frequently appeared in the live broadcast room to bring goods, and linked more than 30,000 offline stores to start exploring “new retail”, providing offline experience, online ordering, national unified distribution and installation of dual lines Linkage integrated services. In the eight months of 2020, Dong Mingzhu participated in 13 live broadcasts, bringing a total of 47.62 billion goods, more than a quarter of Gree Electric’s total revenue in 2020. “The more you sell, the happier,” she admitted.

Under Dong Mingzhu’s “new retail” efforts to turn the tide, Gree’s performance in the second half of 2020 gradually recovered. The annual revenue of 2020 was 170.497 billion yuan, a year-on-year decrease of 14.97%; the net profit attributable to the parent was 22.175 billion yuan, compared with the same period last year. A decrease of 10.21%, which is slightly lower than that of the first half of the year.

And Meng Yutong appeared in the second year after Dong Mingzhu proposed to “normalize live broadcast”. Dong Mingzhu, who was born in sales, has many labels on her body, such as “Iron Lady”, “Queen of Marketing”, and “Domineering Female President”. Just like Dong Mingzhu’s passion for creating personal IP, Meng Yutong was born with “Dong Mingzhu’s successor.” “Debut”, Gree Electric also quickly applied for the registration of several trademarks such as “Pearl Yutong”, “Meng Yutong” and “Yutong”.

Li Guoqing, the founder of Dangdang.com, once commented on social media at the time, saying, “This is a hype, the purpose is to bring goods live and incubate their own Internet celebrities.”

Meng Yutong also resident in the “Pearl Yutong Live Room” at the beginning of this year to bring goods live, but the performance of bringing goods is not very satisfactory. Some media found that a total of 235 products were launched in the live broadcast room, but the sales volume was only 25,000+. In addition to disappearing from the screen more than a month ago, there are rumors that Meng Yutong was fired due to poor performance in bringing goods.

In “We Beginning in the Workplace”, Dong Mingzhu was asked about the inheritance of the company. She bluntly said that she has passed the retirement age for many years. When there is a suitable person, she will choose to take over the shift. However, the training of successors does not happen overnight. Huang Hui, the former second-in-command of Gree, has been trained in Gree for nearly 29 years. Dong Mingzhu also practiced in Gree for nearly 22 years before he became the “first-in-command”. He started from scratch just because he liked Meng Yutong’s personality. To be a successor to Gree, the gimmick is bigger than the reality.

At Gree’s 30th anniversary celebration, Dong Mingzhu once said that Meng Yutong was launched because “Gree needs countless Dong Mingzhus to establish such a culture.” But now, Gree still has only one Dong Mingzhu.

When the “Iron Lady” is in charge of Gree

In May 2012, Zhu Jianghong retired, and Dong Mingzhu, the chairman of Gree Group and the chairman and president of Gree Electric Appliances, became the “top leader” in the absolute sense.

From making a 1 billion bet with Lei Jun, bombarding China’s auto manufacturing industry, tearing up rivals Oaks and Midea, and claiming to assign rooms to employees, to the current “cultivation of the second Dong Mingzhu”, Gree will never lay off employees, Dong Mingzhu single-handedly kept Gree on the hot search list, and Gree also formed a high degree of binding with Dong Mingzhu herself.

Dong Mingzhu once famously said: “It is only me who has the final say that Gree can develop into what it is today.” The words show the domineering and self-confidence of “strong women”. The “joint-stock regional distribution model” that once made Gree the leader in the air-conditioning industry was spearheaded by Dong Mingzhu.

In 1996, the air-conditioning industry suffered an unprecedented cold summer, and the air-conditioning could not sell at all. The first nationwide price war broke out in the household air-conditioning industry.

At that time, Gree had four large wholesalers in Hubei. In order to grab the land, they began to compete to reduce prices and sell goods, disrupting the market price of Gree air conditioners and directly making other Gree distributors unprofitable. In this regard, Gree spent a huge amount of 100 million yuan to subsidize dealers who suffered heavy losses.

In order to avoid such a phenomenon from happening again, at the end of 1997, Dong Mingzhu established a sales model of “large dealers as the center” in Hubei, thus forming a sales level of sales companies-agents-dealers, and cooperated with Hubei’s distributors. Distributors set up regional brand sales companies. One year after the implementation of the new sales model, sales in the Hubei pilot area increased by 40%. After that, Dong Mingzhu began to promote it nationwide.

In 2007, in order to deeply bind the interests of distributors and improve the company’s control over the channel, Gree Group transferred its 10% equity of Gree Electric Appliances to Hebei Jinghai Guarantee Investment Co., Ltd. (“Jinghai Guarantee” for short). ), which was formed by Gree’s 10 regional sales companies and introduced as the company’s strategic partner.

However, with the rise of e-commerce and the development of people’s online shopping and consumption habits, the joint-stock regional distribution model of layers of wholesale agents is obviously not suitable for the short-chain trend of marketing channels. The increase in intermediate links has pushed up product prices and reduced market competitiveness. In addition, the long-term “path dependence” also led to Gree’s lack of attention and investment in online channels in the early stage. Compared with competing companies such as Midea, Gree’s online channel construction was significantly slower.

It was not until November 2014 that Gree finally opened a flagship store on Tmall. However, in the following years, Gree began an intensive online attempt.

In 2019, the mini program “Dong Mingzhu’s Store” in the distribution mall was launched; during the epidemic in 2020, Dong Mingzhu brought 47.6 billion yuan of goods in 13 live broadcasts throughout the year, and nearly 50 billion yuan of goods in the next year’s national tour; 2021 “Gree Dong Mingzhu” “Gree Dong Mingzhu Store” has ushered in an explosive development, forming a matrix of live broadcast network celebrities represented by “Miss Dong” and “Yu Tong”; in 2021, “Gree Dong Mingzhu Store” will be transformed into an open platform, through investment promotion and multi-channel Collaborate to diversify brands, product offerings and business models…

Gree’s online transformation can be said to have come just like a storm, but Dong Mingzhu’s efforts are still slightly weak in view of the current predicament that Gree is facing.

Gree is like a “fish” and indispensable for “water”

Zhu Jianghong, the former boss of Gree, once wrote in the book “Zhu Jianghong’s Autobiography: My 24 Years in Charge of Gree” that the relationship between an enterprise and a merchant (dealer) is a relationship between fish and water, and an enterprise is a “fish” and cannot be separated from it. Open the “water”; on the contrary, the “water” can throw away your “fish”.

At present, Gree is facing the pursuit and interception of white goods manufacturers such as Midea, Haier, and Oaks, and it has launched its online efforts to bypass the dealers and face consumers, which undoubtedly moved the dealers’ cakes and made the dealers have no money to make. The more Gree sells online, the greater the impact on offline channels.

Dramatically, just one day after Dong Mingzhu’s live broadcast of “6.18” in 2020 set a new sales record of 10.27 billion yuan, Jinghai Guarantee announced that it would reduce its holdings of Gree Electric shares by 42.8818 million shares, which is 5 years. the first reduction.

On the other hand, Midea launched a channel reform in 2015, cutting provincial dealers from the middle. At the same time, through discounts and promotions in the off-season of air conditioners, the previous dealers’ stockpiling of goods was changed to “consumer stocking of goods”, which improved its own production and sales balance. ability. However, Gree currently does not account for a high proportion of online sales, and it still relies heavily on dealer channels. According to a report by CCID Research Institute, Gree’s online channel revenue will only account for about 13% to 14% in 2021, far lower than the industry average of 52.9%. %. Even if Gree also cut off provincial distributors, it would just follow Midea’s previous path and would not have a first-mover advantage.

In terms of products, Gree is now stuck on its own ace brand air conditioner. Although Gree has many product categories and advertises diversification, its revenue is highly dependent on the air-conditioning sector, and air-conditioning revenue accounts for more than 70% of Gree’s total revenue.

But even so, Gree’s air-conditioning revenue will be overtaken by Midea in 2021. Midea’s annual revenue in 2021 will be 343.4 billion yuan, and the air-conditioning business will contribute 141.8 billion yuan, while Gree’s proud air-conditioning business only has revenue of 131.7 billion yuan. Yuan, a difference of 10.1 billion yuan.

The entire air-conditioning industry is also not very prosperous and has entered a downward cycle. According to the data released by the National Bureau of Statistics, the production and sales of air conditioners in my country increased year by year from 2013 to 2019. However, since 2017, the sales volume of air conditioners in my country has been lower than the output, and the production and sales rate of the industry has been declining year by year. In 2019, the output of air conditioners in my country was 218.66 million units. The sales volume exceeded 5 million units, and the production and sales ratio was 97.9%. The industry has the problem of overcapacity.

In addition, in recent years, the number of air conditioners owned by 100 households in China has increased year by year, the pulling force of third- and fourth-tier cities has gradually weakened, and the weak property market has led to a decline in the market demand for new air-conditioning units. my country’s air-conditioning industry has entered the stock market.

In the face of such internal and external troubles, Gree urgently needs to develop new growth poles to meet the new challenges in the white goods market. I wonder if Dong Mingzhu can lead Gree to a successful comeback?

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