From Gree to Midea: The Shift in Appliance Hegemony and the Transformation of an Era

From Gree to Midea: The Shift in Appliance Hegemony and the Transformation of an EraOn May 28, 2023, Midea Group achieved an astounding record of exceeding 1 billion yuan in single-day revenue, causing a stir in the business world and marking the reshaping of the appliance industry landscape. Gree Electric Appliances, the former hegemon, after 24 years of glory, ultimately ceded its throne to the rising Midea

From Gree to Midea: The Shift in Appliance Hegemony and the Transformation of an Era

On May 28, 2023, Midea Group achieved an astounding record of exceeding 1 billion yuan in single-day revenue, causing a stir in the business world and marking the reshaping of the appliance industry landscape. Gree Electric Appliances, the former hegemon, after 24 years of glory, ultimately ceded its throne to the rising Midea.

This shift in appliance dominance hides within it a microcosm of the developmental journey of China's appliance industry, and it reflects the tide of change sweeping through the era. From He Xiangjian starting his business in a humble workshop, to Dong Mingzhu rising from a grassroots salesperson to become the leader of Gree, and finally Midea surpassing Gree and becoming the industry's leader, this history is filled with drama and profound lessons.

I. Starting Up: The Dreams and Striving of Two Youth in Different Eras

In 1968, the spring breeze of reform and opening up had not yet swept across the land of China, and countless young people with dreams in their hearts embarked on their own journeys of striving. He Xiangjian, a passionate young man with entrepreneurial aspirations, set up a small workshop in his modest home. At that time, who could have imagined that this unassuming workshop would become the starting point for the globally renowned Midea Group?

Around the same time, in Anhui province, a girl named Dong Mingzhu was also striving with the desire to change her destiny. She resigned from a chemical institute in Nanjing and arrived in Zhuhai, a city at the forefront of reform and opening up, joining a small enterprise called "Zhuhai Haili Air Conditioner Factory," starting as a lowly salesperson.

These two young people's experiences were starkly different, but they both shared a longing for a better life. Their individual journeys of striving foreshadowed the coming era of booming growth in China's appliance industry.

II. The Rise of Dong Mingzhu: Gree's Iron Lady and an Era of Glory

The young Dong Mingzhu, driven by her extraordinary resilience and fighting spirit, rose to prominence at the Haili Air Conditioner Factory. She tirelessly traveled between cities, carrying heavy product samples, walking hundreds of kilometers to visit clients. Even young men would struggle to bear such a grueling workload, but Dong Mingzhu never complained.

In 1992, Dong Mingzhu's sales in Anhui province exceeded 16 million yuan, accounting for one-eighth of the company's total annual sales. This dazzling achievement quickly made her a prominent figure in the company.

In 1994, Gree faced an internal crisis, with key employees leaving, pushing the company to the brink of collapse. At this critical moment, Dong Mingzhu stepped up to the challenge. Leveraging her extraordinary wisdom and decisiveness, she successfully turned Gree around, setting her on a path to career success.

In 2001, Gree faced a financial crisis. Dong Mingzhu refused the tempting offer of a high salary from an American company. She knew that Gree's roots were firmly planted in her homeland, and that only by upholding her original intentions could it ultimately thrive.

With her outstanding leadership abilities and impressive achievements, Dong Mingzhu eventually ascended to the helm of Gree. She adopted a strong-willed approach, demanding strictness from all employees, establishing an image of an "Iron Lady" and earning the respect of her workforce.

Dong Mingzhu deeply understood that mastering core technologies was the key to an enterprise's enduring success. Starting in 2005, she led Gree in investing heavily in technology development, forming a top-notch research team, achieving breakthroughs in multiple core areas. As of 2023, Gree holds 5,725 independent intellectual property patents, becoming the leader in technological innovation in China's appliance industry.

Dong Mingzhu's standards for product quality were extremely high, and she was incredibly strict with her employees, often criticizing and punishing them. It was this rigorous approach that drove the continuous improvement of Gree's product quality.

Embracing the internet mindset, Dong Mingzhu personally went on live-streaming platforms to "promote" Gree products, shattering the traditional marketing model and earning Gree high exposure and attention among young consumers.

Under Dong Mingzhu's leadership, Gree experienced 24 years of glory, becoming the undisputed hegemon of the appliance industry.

III. The Rise of Midea: A Journey of Innovation from Imitation to Transcendence

Unlike Gree, Midea's development path was fraught with obstacles and challenges. But Midea founder He Xiangjian knew that only through continuous innovation could the company survive and thrive in this intensely competitive market.

In 1996, Midea established a development strategy of "global operation, local manufacturing," initiating a transformation towards research and development, branding, and marketing networks. After 50 years of development, Midea has accumulated over 700 patent technologies in various areas, building a complete research and development system.

Midea adopted a more proactive approach to product pricing strategies. Leveraging its powerful supply chain advantage, it manufactured high-quality products at lower production costs, achieving a more competitive sales price in the terminal market compared to Gree.

Midea also utilized cutting-edge technological tools like big data to accurately understand market demand, optimize its supply chain system and intelligent manufacturing processes, significantly improving production and operational efficiency, giving it the advantage of economies of scale.

A Midea executive once proudly stated, "Through our continuous process improvements, we continuously elevate our product performance levels and achieve year-on-year price reductions, distinguishing ourselves in a homogeneous market environment."

Midea keenly seized the opportunity presented by the new wave of technological revolution, building an open and shared platform for technological innovation. Users can easily control their home appliances seamlessly through Midea's Internet of Things system, enjoying a smart living experience.

Midea's pioneering advantage in areas like smart homes and its forward-thinking understanding of the internet mindset have led to its enormous success in the face of the transformation of the era, ultimately surpassing Gree.

IV. Two Powerful Contenders: The Collision of Internet Mindset and Technological Revolution

Under Dong Mingzhu's "One General's Success, A Million Bones Lie Bleached" approach, Gree became complacent and unable to extricate itself, ultimately being completely surpassed by Midea's internet mindset and technological philosophy.

A Midea executive likened Gree to a "combustion engine," while Midea was a "power drive system," visually demonstrating the vast difference in their development philosophies.

Gree was convinced of its technological superiority but was careless in its future technological planning. However, Midea recognized the arrival of the smart home era and the impact of the internet mindset on traditional manufacturing, actively adapting its development pace and business model, securing a head start.

In 2023, Midea's consistent lead in product quality, pricing strategies, and marketing channels ultimately led to its surpassing Gree in terms of revenue scale. Midea Group's revenue reached 373.7 billion yuan, while Gree's stood at 205 billion yuan, with a difference of nearly double.

Midea's single-day revenue exceeding 1 billion yuan further boosted its market confidence, providing it with powerful momentum in its quest to secure a larger market share.

V. Lessons and Prospects: The New Direction of Era Transformation and Enterprise Development

Gree's defeat to Midea after 24 years of hegemonic rule was indeed a significant blow. However, this shift also provides valuable lessons and insights for the development of China's appliance industry.

As the times change, enterprises need to continuously innovate and embrace new technologies to remain competitive.

Gree's lesson teaches us that even with a powerful technological advantage, we cannot become complacent but must keep pace with the times and actively explore new development models.

Midea's success demonstrates the paramount importance of internet mindset and technological innovation to enterprise development.

Looking ahead, China's appliance industry will continue to develop towards intelligence, digitalization, and greenness. Midea and Gree, two industry giants, will continue to make progress in innovation and competition, writing a new chapter in the development of China's appliance industry.

Conclusion

The shift in appliance hegemony from Gree to Midea reflects the journey of China's economic development and technological advancement, providing valuable lessons for enterprise development. Only by keeping pace with the times and continuously innovating can we achieve success in future competition.

Keywords: Gree, Midea, Appliances, Hegemony, Era Transformation, Technological Innovation, Internet Mindset, Enterprise Development, Competition, Lessons, Prospects

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