The two giants in the home appliance market are Midea and Gree. These two brands occupy a large portion of the domestic appliance market, and the competition between the two is also fierce. In fact, in addition to these two well-known giant home appliance brands, there is another brand that is also well-known, and that is Haier.
Since its establishment, Qingdao Haier is 35 years old. When it was supposed to gradually enter the "year of no confusion", the company was caught in the "confusion" of low growth rate.
Haier's year-on-year growth rate was 32% in 2016 and 33% in 2017. In terms of net profit, the year-on-year increase in 2016 was 17%, up to 37% in 2017, and less than 8% in 2018.
Specifically, the current revenue contribution of the six main businesses of Qingdao Haier: refrigerators, washing machines, air conditioners, channel services, kitchen appliances, and water heaters are about 29%, 19%, 17%, 14%, 13%, and 4%, respectively. .
Haier has fallen behind, and its market value is so much worse than that of Midea and Gree!
Midea's market value: 419.8 billion.
Gree Electric's market value: 354.4 billion.
If you want to trace the history of home appliance brands in my country, Haier should be one of the earliest batches. The first major appliances bought by a large number of households in China are Haier products, including refrigerators, air conditioners, washing machines, etc., so Haier used to be The overlord of China's home appliance market is undoubtedly.
It's just that in the perennial development, although Haier is well-known, under the crazy marketing of Midea and Gree, it will eventually be robbed of the market.
In the home appliance industry, new forces can always bring more discounts and more new products. It is precisely because of this that Haier’s domestic market size has been constantly invaded in recent years, so that Haier’s market value has been lost to the United States. And Gree is far behind.
Judging from the current market value of these three companies, Midea's highest is 401.3 billion yuan, which is actually Gree's 349.9 billion yuan, while Haier has only 109 billion yuan.
From the perspective of operating performance, as one of the three major domestic white power giants, Haier Group will naturally be compared with the other two Midea Group (000333.SZ) and Gree Electric (000651.SZ). It is worth noting that Qingdao Haier (600690.SH), a subsidiary of Haier, as the first home appliance giant to land in China's capital market, currently lags behind the two major competitors in terms of revenue and market value, and the growth rate seems to be weak.
In fact, in the years of continuous development of Haier, it has always extended its development direction abroad. In order to strengthen its own scale, Haier has been making crazy mergers and acquisitions during these years.
As early as 1997, Haier acquired Aide Washing Machines, Laiyang Appliances, Fenghua Refrigerators, and later merged with Red Star Appliances, the third largest laundry factory in China.
Not only that, the direction of Haier's subsequent mergers and acquisitions has gradually extended to the overseas home appliance industry. Since 2011, Haier has successively acquired the home appliance business of Japanese companies such as Sanyo Electric, General Electric of the United States, and Candy of Italy. This has cost nearly 50 billion. yuan.
This series of mergers and acquisitions cost Haier a lot of energy and financial resources. In this process, Midea and Gree relied on a strong marketing model to leave Haier far behind.
But the interesting thing is that even if Haier’s market is not as large as Midea and Gree, in the air-conditioning industry, Haier’s “new air-conditioning” has been the most popular in recent years.
With the implementation of the new national standard for air-conditioning energy efficiency in my country, major appliance companies have begun to develop "new air-conditioners" in terms of new energy efficiency. From the perspective of the market share of new energy-efficient air conditioners, Haier currently accounts for 43%, Hisense accounts for 35%, and Midea accounts for 18%, while Gree is not in the top three.
In fact, in the current air-conditioning market, Midea and Gree are still far ahead, but in the field of new energy-efficient air-conditioning, Haier occupies more than 40% of the market. After all, Haier is the first in the industry to deploy new energy efficiency.
Haier’s “new air conditioner” is favored by the market mainly because of its powerful functions. Its new energy-efficient air conditioners are among the best in the industry for their sterilization and antibacterial functions, including its healthy air scenes, which are also popular among consumers. Favor.
Stall gradually in the change
Since 1984, Haier has gone through the four development stages of famous brand strategy (1984~1991), diversification strategy (1991~1998), internationalization strategy (1998~2005) and globalization strategy (2005~2012) . And entered the network strategy stage in 2012.
If Haier wants to avoid the ending of "helplessness," it must return to the track of "deja vu" and deepen its technological innovation.
Obviously Haier is the "old predecessor" in the home appliance industry. Why is the market value so much different from that of Midea and Gree?
Li Shi's article commented that although Haier is still a respectable company, Zhang Ruimin is still an entrepreneur worthy of our respect. But compared to the achievements of Gree, Midea and other competitors, we can only call Haier the last decade the lost decade.
Light R&D, Heavy Marketing
The air conditioning industry has entered an oligarchic pattern. Midea Group and Gree Electric have a combined market share of 60%, while Haier only has 12%, unless they produce better products.
In 2017, Qingdao Haier invested a total of 4.6 billion yuan in research and development, accounting for only 2.88% of the company's total revenue. Midea and Gree are more generous in investing in the future, and their R&D expenditures have stabilized at around 3.8% in the past three years.
However, Haier spends huge amounts on marketing expenses to gain market share in refrigerators and washing machines.
Whether it is a refrigerator, washing machine, or an air conditioner, they all have a high technical content and cannot do without continuous investment in research and development. In 2017, Qingdao Haier invested a total of 4.6 billion yuan in research and development, accounting for only 2.88% of the company's total revenue. Midea and Gree's R&D expenditure stabilized at around 3.8%. In terms of marketing expenses, Qingdao Haier is willing to spend a lot of money. In 2017, Haier’s marketing expenses totaled 28.2 billion yuan. In the past three years, Haier's average proportion of marketing expenses in revenue has never been lower than 16%. The expense ratios of Midea Group and Gree Electric are 11% and 14% respectively.
This has led to the fact that the gross profit margin of 30% is not much different, but Haier's net profit margin lags behind: in the past three years, Haier's average sales net profit margin was 5.8%, while that of Gree and Midea was 13% and 8%.
With the lowest R&D expenditure and the highest cost expenditure, Qingdao Haier’s market share and revenue are “buy with money”. Once the subsequent market investment decreases, it will be difficult to compete with its old rivals.
The last thing to say is that Haier, like Gree and Midea, is a very outstanding enterprise in the field of Chinese home appliances and even in the Chinese manufacturing industry. Looking at the current time node, Greemay’s focus and technological advantages in the field of home appliances make it still the most profitable company. Therefore, Haier must continue to make corporate strategic adjustments and changes in accordance with the overall environment to catch up. On Gree Midea.