The rise of live streaming has caught Gree Electric’s chairman Dong Mingzhu. Under Dong Mingzhu’s support, Dong Mingzhu’s sales of goods have continued to hit new highs. However, the performance of Gree’s air-conditioning business in the first half of this year showed that Gree’s air-conditioning business revenue was less than the third Second, this is the first time that Gree lost to Midea in the air-conditioning market. The result may be that Dong Mingzhu was misled by the live broadcast.
Gree's biggest mistake is to miss the online air-conditioning market. Around 2014, Oaks promoted the development of the online air-conditioning market. Driven by Oaks, the proportion of air-conditioners sold on the online market in the domestic air-conditioning market continued to increase. By 2019, the proportion of air-conditioners sold online in the domestic air-conditioning market was approaching. 50%.
In recent years, AUX’s online air-conditioning market has often ranked first. Because AUX has seized the opportunity of the online air-conditioning market, AUX’s share in the domestic air-conditioning market has continued to rise. In the first half of 2019, it even surpassed Haier’s entry into the domestic air-conditioning market. The top three, and Oaks has been hovering at fifth place in the domestic air-conditioning market.
With the rapid development and growth of the online air-conditioning market, Midea, one of the top two domestic air-conditioners, chose to follow. In 2019, 618 Midea's online air-conditioning market started fighting with Oaks, and then Midea won the first place in 618 online air-conditioning sales in 2019. After surpassing Oaks, Midea's online air-conditioning market continued to exert strength, and Midea's share in the domestic air-conditioning market continued to increase. In the first half of this year, it finally defeated Gree and won the first place.
Faced with the rapid development of the online air-conditioning market and the entry of its competitor Midea into the battlefield, Gree has been slow to take action. It did not join the battlefield until the last day of Double Eleven in 2019. However, its air-conditioning products are far less favorable in terms of prices than Midea. It failed to reverse the decline and eventually lost.
Gree’s reluctance to invest heavily in the online air-conditioning market is that it has already formed an alliance with offline channel vendors. The Jinghai Guarantee established by offline channel vendors is its second largest shareholder, and Dong Mingzhu, who has been chairman of Gree since 2012, is also It was Jinghai's guarantee that it won the chairmanship. Based on the interests of both parties, Gree has been slow to make efforts in the online air-conditioning market.
Missing Gree in the online air-conditioning market led to being overtaken by Midea, and seemed to panic. Then the live broadcast of goods emerged. Gree Electric’s chairman Dong Mingzhu seemed to think that the live broadcast of goods would become an opportunity, so Dong Mingzhu began to intervene strongly. Several live streaming sales have set a record for live streaming sales.
However, there is huge controversy about live streaming. In the boom of live streaming, some live streaming products frequently report sales fraud, and some live streaming products are accused of selling fake and inferior products. These chaos highlight that live streaming is difficult to become a major issue. It’s even more impossible to surpass e-commerce channels. Of course, these problems should not exist in Dong Mingzhu's live broadcast of goods, and Dong Mingzhu has always emphasized the authenticity of her live broadcast of goods sales.
Of course, Dong Mingzhu’s active participation in live broadcast delivery shows that she has recognized the inevitable change in sales channels. However, this drastic change has led to tensions between it and offline channels. Then Jinghai Guarantee sold some of Gree’s shares. I don’t know if offline channel providers express their opinions to her in this way.
It is worth noting that although Midea has invested heavily in the online air-conditioning market before, it has not made much fanfare, but has better balanced the relationship between its online channels and offline channels, and during the period of the rise of live broadcasts, Midea did not invest heavily.
The results announced in the first half of the year showed that Gree’s air-conditioning business revenue was 41.3 billion yuan, and Midea’s air-conditioning business revenue was 64 billion yuan. From the performance of both parties, it can be seen that the live broadcast and e-commerce channels are more important. I hope Gree can rethink the relationship between live streaming, e-commerce and offline channels after seeing this performance.
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