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Dong Mingzhu bombarded Xiaomi, Gree was in crisis, and the home appliance market was rising again!
Dong Mingzhu said the wrong thing again! This time, the fake Xiaomi was launched in the air, but the crisis of Gree was exposed. At the recent Gree shareholders' meeting, Dong Mingzhu bluntly said that Xiaomi's so-called "air conditioning sales first" statement is not reliable at all, and pointed out sharply: "Xiaomi relies on other manufacturers to make products, what is your technology?" Consumers know who is the first. "I have to say that Dong Mingzhu is worthy of being an old man, and he poked at Xiaomi's weakness in one sentence, just like Huawei's Yu Chengdong asked Xiaomi to make a car, where is Xiaomi's core technology? However, some netizens feel that Dong Mingzhu's words are exaggerated, especially when he speaks too ugly, and he should learn from the "nine-headed bird" Lei Jun.
As an entrepreneur as an Internet celebrity, Dong Mingzhu was a precedent, but he didn't expect to be robbed of the limelight by Lei Jun later. Dong Mingzhu's controversy over "Gree and Xiaomi" first reflects the fierce competition between traditional giants and emerging forces in the current home appliance market.
As a representative of traditional home appliance brands, Gree has a deep technical accumulation and brand influence in the field of air conditioning. In Dong Mingzhu's own words, the key to Gree's long-term invincibility lies in the incomparable advantages of other manufacturers in technology research and development and quality control. As for Xiaomi, there is no technical accumulation, but with Internet thinking and innovation ability, no matter which field it is involved in, it can quickly occupy a place in the market.
In the end, who is more powerful has to rely on performance to speak. On May 23 this year, Xiaomi announced its financial results for the first quarter of 2024. In the field of major appliances, Xiaomi's performance is quite good. According to the annual report data, the major appliance business maintained a high growth trend, with air conditioner shipments reaching 690,000 units in the first quarter, a year-on-year increase of more than 60%. You know, the first quarter is the off-season for air conditioning sales, and with such sales, Xiaomi's strength should not be underestimated.
In the first quarter of 2024, Gree achieved operating income of 36.59 billion yuan, and the net profit attributable to the parent company exceeded 4.6 billion, an increase of 13.77% year-on-year. Although the growth rate is not as fast as Xiaomi, it is not easy for Gree to maintain double-digit growth due to its large performance base.
From the perspective of the entire industry, in the first quarter of 2024, the total shipments of air conditioners in the domestic home appliance market reached 22.65 million units, a year-on-year increase of 14.5%. In terms of absolute sales data, Xiaomi can only be regarded as the third echelon in the air conditioning industry, and its sales scale cannot be compared with traditional brands such as Gree and Midea. But Xiaomi's growth rate is rapid, if it can continue to be maintained, it won't take a few years, Xiaomi's market share may make Gree frightened, and Dong Mingzhu may really be "stolen" by Lei Jun at that time.
Xiaomi does not have deep technical accumulation, and the products are also foundry, so how did the rapid growth of sales happen? In a word, Lei Jun earns young people's money, focusing on "cost-effective" and "good looks".
The unit price of a large air conditioner is 1499 yuan, and the unit price of a 1.5 horse is only 1799 yuan, which is very competitive in the air conditioning market, lower than Midea, Gree and Haier. It can be seen that Lei Jun wants to exchange low prices for sales, make less money per unit, sell a few more, as long as the total amount is earned. This kind of sales strategy, Lei Jun has repeatedly used it in Xiaomi's other electrical products, such as air purifiers, rice cookers, and even power strips, which is not a price "killer"?
In addition to taking the low-cost route, Lei Jun will also take the "mass line", especially for young people from small towns like him. Lei Jun was born in an ordinary family in Xiantao, Hubei Province, and drifted north after being admitted to Wuhan University, and his experience is regarded as a "success classic" by many young people, and he is also known as a "small town youth leader". According to the OECD, by 2030, China's urban population will increase by 300 million from today's levels, equivalent to the total population of the United States. So many young people from small towns are pouring into the city, all wanting to buy a house and settle down, and Lei Jun obviously wants to win this market.
In addition, Lei Jun is well aware of the needs of young people. All of Xiaomi's products, whether they are large appliances or small household appliances, have a simple and smooth appearance, catering to the aesthetics of young people everywhere.
Industry competition changes rapidly, and if you are not careful, you will be eliminated by the times. In December 2013, at the 14th China Economic Person of the Year Award Ceremony, Dong Mingzhu and Lei Jun had set a bet of 1 billion in 5 years, if Xiaomi's turnover exceeded Gree within 5 years, Dong Mingzhu would give Lei Jun 10 billion. In 2018, Gree's total operating income was 200 billion yuan, and Xiaomi's was 174.9 billion yuan, and Dong Mingzhu won by a narrow margin. But in the second year, Xiaomi's revenue reached 205.8 billion, surpassing Gree.
Xiaomi is menacing, and Gree's sense of crisis is about to overflow from Dong Mingzhu's speech. After so many years, although Dong Mingzhu tried his best, Gree's diversified business layout has never been effective, only traditional household appliances such as air conditioners can be played, the ceiling of the industry has obviously peaked, and it has to face a rising star like Xiaomi, and the pressure is really not small. Even Dong Mingzhu himself said that he might retire next year, but it would not be okay to leave this mess to future generations.
This incident sparked heated discussions among netizens, not only the products and quality of the two companies, but also the personality traits of the founders were also compared. Some people say that Dong Mingzhu is overconfident, his words are direct and intense, and he has strong personal emotions. As for Lei Jun, no matter what the public says, he is always smiling and humble, in terms of public relations ability, Dong Mingzhu should really learn from Lei Jun.
I have to say that the smiling Lei Jun has become a market killer, Xiaomi enters any industry, the price war will become the main theme, and the companies in the industry will bid farewell to their comfort zone or even be eliminated. As netizens said, traditional electrical appliances like air conditioners, where there are any technical barriers, people like it is the best. Dong Mingzhu angrily scolded Xiaomi, reflecting the problem that Gree is neither aware of its own crisis, nor does it understand the real needs of the market and customers.