How Gree Will Achieve Leapfrog Growth in Its Refrigerator And Washing Machine Business

Since the day when the term "good appliances, Gree made" entered the public eye, Gree's long-standing layout in the refrigerator, washing machine, and even household appliance businesses has become an inevitable trend, especially after Gree Electric's revenue and net profit reached a historic high in 2023. Finding new growth poles is the core demand for its later scale to climb to new heights.
On August 2, 2024, the Gree Ice Wash Life Appliance Strategy Launch Conference with the theme of "Gree Leapfrog Again, Technology Driven, Towards the Peak of Ice Wash" was held in Shijiazhuang, Hebei. At the conference, Gree's Chairman and President Dong Mingzhu told 1500 attendees, "Gree has achieved the ultimate in all brand home appliances through continuous technological innovation and mastery of core technology. Through Made in China, the world understands China." Guided by this strategy, Gree's Sales Director Lu Luqun directly stated, "On the road to Gree's further leap, the ultimate goal is to achieve leapfrog growth in refrigerators and washing machines
Building a foundation for leapfrog growth through the "three major advantages"
In fact, not only the domestic air conditioning market, but also refrigerators, washing machines, and other home appliance categories, have almost entered an unprecedented inventory game cycle in the domestic sales end. This year, in the environment of favorable weather and significant price decline, the entire air conditioning market failed to explode the expected explosive market during the peak season, which is an example.
Therefore, from the perspective of the external environment of the enterprise, Gree does not have sufficient dividend opportunities in the refrigerator and washing machine business, and the real driving force lies in the strengthening of its internal system. Lu Luqun's summary of this is "three major advantages and one major capability".
The first major advantage is internationally leading technology. Lu Luqun mentioned at the meeting that Gree, which has always adhered to independent innovation, currently has 46 technologies that are at the forefront of the international market. Among them, the key technology for preserving fruits, vegetables, and meat in household refrigerators is quite representative. The technology and its application product, the "518 Global Fresh Refrigerator," have also won a series of honors such as the "Geneva International Invention Gold Award" and the "First Batch of Maternal and Child level Refrigerator Certification.
The same applies to washing machine products. Gree's new second-generation heat pump washing machine inherits the core technology of air conditioning and is equipped with a self-developed heat pump dual rotor variable frequency compressor and low-frequency torque control technology that has won the National Science and Technology Progress Award. It can achieve a comfortable drying effect at 37 ℃ without damaging clothes.
The powerful channel system is the second major advantage of Gree's refrigerators. According to Lu Luqun, Gree has established over 30000 exclusive stores in the domestic market. Even the best products need to be connected to user scenarios through commercial distribution channels, and channels have become a key part of Gree's ice washing business. This is also one of the reasons why Gree Electric has held frequent ice washing strategy press conferences this year. The third major advantage is Gree's establishment of over 13000 after-sales service outlets nationwide. As is well known, in the inventory market cycle, services have become the core to activate inventory and achieve value reconstruction.
It is not difficult to find that the leapfrog growth path of Gree refrigerators is exceptionally clear, which is driven by technology to overcome industry product bottlenecks, strengthened by channel positions to achieve market penetration, and driven by retail to surpass past business models.
'One major capability' becomes a key driver for leapfrog growth
At this meeting, Zhu Lei, the Marketing Director of Gree Electric Appliances, also explained Gree's brand strategy for ice washing household appliances from the three dimensions of "confidence, trust, and belief", and stated that Gree will help refrigerators reach their peak in the brand through continuous product innovation and technological upgrades.
If we say that Gree's technological and functional advantages in ice washing products are the foundation of the "unique" good business mentioned by Zhu Lei; So the "one major capability" discussed by Lu Luqun at the meeting on August 2nd is the key driving force for Gree's ice washing and household appliance business to achieve leapfrog growth.
This major capability is the "digital traction capability under the new retail model." As is well known, in today's era where mobile internet technology has formed rich deconstructive effects on every link of the home appliance industry's research, production, supply, and marketing, digitization is the greatest certainty; Over the years, Gree has been carefully refining its digital channel system and continuously improving the efficiency thinking of its channels.
Lu Luqun said at the conference, "Through digital traction, we can real-time understand inventory, sales, what products are selling well, and which links need to strengthen our capabilities. In addition, we also need to expand our live broadcasts, enhance our instant retail capabilities, and achieve integrated online and offline OTO, and so on
From the perspective of channel operation, digital traction can effectively reduce channel costs. With retail or terminal orientation, it can also improve the inventory and corresponding capital turnover efficiency of each store; From the perspective of channel partners, this ability means that they can do larger scale business with less investment.
It is not enough to achieve the above aspects. After the household appliance market enters the inventory cycle, the demand on the user side is concentrated on product updates and upgrades. At the macro level, even through the continuous introduction of "trade in" subsidy policies, the release of demand resources is promoted. And specialized recycling and dismantling is an important part of Gree's "major capability". It is worth mentioning that Gree has long established a green renewable resources company in Shijiazhuang. Therefore, Lu Luqun said, "We have truly achieved a closed-loop system of exchanging old for new throughout the entire chain
A more important pivot of "One Great Ability" is the instant retail model represented by live streaming. This model was fully implemented at the meeting on August 2nd, and the sales figures of live streaming were updated and jumped in real-time as the meeting progressed. If we were to summarize the digital traction capability of Gree's new retail model in one sentence, it would be "the efficiency of the online batch system, the specialization of trade in, and the standardization of instant retail".
The Hebei market is a microcosm of Gree's leapfrog growth in ice washing business
Dong Mingzhu also mentioned at the meeting on August 2nd: "Gree will further expand its cooperation space with Shijiazhuang and create a new situation of win-win." Many people may not know that Shijiazhuang and even the entire Hebei are key hubs for Gree Electric Appliances to radiate the markets of North China, Northeast China, and Northwest China. In addition to home air conditioning, commercial air conditioning, and green renewable resources companies, Gree Electric Appliances has also established a manufacturing base for household appliances products in Hebei. According to Dong Mingzhu, Gree will further expand its manufacturing investment in the future.
The market performance of the Hebei market in recent years has also been quite impressive. In the first half of 2024, the sales scale of Gree household air conditioners, refrigerators, washing machines, and household appliances in the Hebei market has reached more than 70% of the total scale for the whole year of 2023. According to the current progress, it is highly likely to achieve a doubling growth this year.
Facing core merchants from across the province, Zhao Xialiang, General Manager of Hebei Gree Ice Wash Sales Co., Ltd., elaborated on the strategy for expanding the market of Hebei Ice Wash household appliances from four dimensions: "strengthening battlefield construction, expanding retail models, focusing on explosive product creation, and iterating service experience".
Zhao Xialiang said that Hebei Gree will create a blue ocean in the "red ocean" of ice washing household appliances. According to him, the growth rate of Jinghong refrigerators in the Hebei market in the first half of 2024 is twice that of the same period last year, and the number of orders for "510 square embedded refrigerators" is three times that of the whole year last year; Gree washing machines have seen even greater growth, with sales volume six times that of the same period last year; And the sales scale of Gree water purifiers has reached 7 times that of the same period in 2023. A series of magnificent growth figures fully demonstrate the surging growth momentum of Gree Ice Wash and household appliances.
At this meeting, the establishment ceremony of the "Hebei Gree Ice Washing Club" was also held. It is reported that the club will lead dealers to deeply cultivate the market through the "Gree Ice Washing Shield Plan", and its core demand is to fully empower Gree's ice washing business to reach new heights in North China.
The growth momentum of Gree's ice washing, washing machines, and household appliances in the Hebei market, as well as targeted and tailored strategies, is actually a microcosm of Gree's efforts to expand its ice washing household appliance business, reflecting Gree's confidence and ability to achieve leapfrog growth.