After the "billion bet", Dong Mingzhu "scolded" Xiaomi air conditioner again

Text | Radar Finance, Author | Mornemon, ed Deep

An article entitled "China's air conditioning market "shuffle", Gree fell out of the top three, the new dark horse is actually a "layman"? The article angered Gree Electric Appliances and caused Dong Mingzhu, the head of Gree Electric Appliances, to "fire" at Xiaomi at the company's annual shareholders' meeting.

It is worth noting that the above-mentioned article is not officially released by Xiaomi, and after checking it by some media, it was found that Xiaomi has not released a battle report data similar to the number one sales of its air conditioning products in official channels. However, despite the current rapid sales growth of Xiaomi air conditioning products, there is still a significant gap in the sales of Xiaomi air conditioners compared with Gree, an old-timer in the air conditioning industry.

In fact, this "anti-counterfeiting" Xiaomi air conditioner sales is not the first "competition" between Dong Mingzhu and Lei Jun. As early as 2013, at the 14th China Economic Person of the Year Award Ceremony, the two made a "billion bet", betting on whether Xiaomi's turnover could surpass Gree Electric in five years. After the financial data of 2018 was released, Dong Mingzhu won Lei Jun. Although Lei Jun lost the bet, Xiaomi's revenue surpassed that of Gree Electric in the following year.

In the context of various companies' efforts to find new revenue growth points, Gree has created mobile phone products to hit the hinterland of Xiaomi, and Xiaomi has also launched its own products in the air conditioning industry that Gree is proud of. In addition to launching mobile phone products, Gree Electric has also made many diversified attempts. However, in the revenue of 2023, the revenue from air conditioning products still accounts for more than 70% of Gree Electric's total revenue.

Dong Mingzhu is in full swing, and the shareholders will "turn on" Xiaomi air conditioner

At the 2023 Annual General Meeting of Shareholders held by Gree Electric on June 28, the "Iron Lady" Dong Mingzhu was "full fire". Dong Mingzhu said that there have been many rumors fabricated on the Internet recently, and "we are constantly cracking down on fakes."

Just before the annual general meeting of shareholders, the Gree Electric Appliance Culture Media Center issued an article through the Weibo account "Gree Wenchuan" that it recently paid attention to an article titled "China's air conditioning market "reshuffle", Gree fell out of the top three, and the new dark horse is actually a "layman"? The false article and transcribed video were reprinted by hundreds of self-media accounts in a short period of time.

Gree Wenchuan said in this Weibo that the article/video misled the public's perception of Gree's products and sales by fabricating false data and other means. In this regard, it has been reported to the relevant state departments and will take legal measures to resolutely defend the legitimate rights and interests of the company.

It is reported that the dark horse referred to in this article is Xiaomi air conditioner. However, the article reported by Gree Electric did not provide clear sales data in the article to support its views.

At the shareholders' meeting held this time, Dong Mingzhu also aimed his firepower at Xiaomi air conditioner, she asked, Xiaomi said that he (air conditioner) ranked first, and it all depends on other manufacturers to make products, what is your technology? "Who is the first, consumers have rods and scales in their hearts".

As soon as Dong Mingzhu's remarks came out, the topic of "Dong Mingzhu's first fight against fake Xiaomi air conditioners" immediately sparked heated discussions. As of press time, the topic has been read more than 62 million times on Weibo, and the number of interactions has reached nearly 100,000.

However, according to some media reports and Radar Finance, in addition to the above-mentioned article, Xiaomi does not seem to have released a "battle report" such as the first sales volume of its air conditioning products in official channels.

Since Dong Mingzhu is the first to fake Xiaomi air conditioners, what is the overall scale of the current air conditioning market and the real sales of Gree and Xiaomi brand air conditioning products? According to the total retail push data of AVC, the retail sales of the air conditioning market in 2023 will be 211.7 billion yuan, a year-on-year increase of 7.5%, and the retail volume will be 60.85 million units, a year-on-year increase of 6.5%.

According to industry online data, in 2023, the production of household air conditioners will be 168.692 million units, a year-on-year increase of 11.1%, and the sales will be 170.440 million units, a year-on-year increase of 11.2%, of which domestic sales and shipments will be 99.597 million units, a year-on-year increase of 13.8%, and export shipments will be 70.843 million units, a year-on-year increase of 7.8%, and domestic and foreign sales will achieve double growth.

According to Xiaomi's previously released financial report, the shipment of Xiaomi air conditioning products will exceed 4.4 million units in 2023, a year-on-year increase of nearly 50%. Thanks to the increase in shipments of air conditioners, refrigerators, washing machines and other products in the Chinese mainland market, the revenue of Xiaomi's smart major appliances achieved a year-on-year growth of nearly 40% last year.

However, Xiaomi did not disclose the specific revenue data of air conditioning products in the financial report. The IoT and consumer products sector, including smart home appliances such as air conditioners, contributed 80.108 billion yuan in revenue to Xiaomi last year, accounting for 29.56% of Xiaomi's current revenue.

In the first quarter of this year, Xiaomi's air conditioning product shipments exceeded 690,000 units, a year-on-year increase of 63%. Stimulated by increased shipments of air conditioners, refrigerators and washing machines in Chinese mainland, Xiaomi's smart home appliance revenue grew by 14.6% year-on-year in the first quarter.

At the earnings call for the first quarter of 2024, Lu Weibing, president of Xiaomi Group, also said: "Yesterday (May 22), we installed 67,000 sets of air conditioners, a record high, and behind it is that Xiaomi air conditioners are now 100% self-developed. ”

According to Guosheng Securities Research Report, citing Aowei data, from January to May 2024, the growth rate of online brands of air conditioners, Gree/Midea/Haier/Changhong/Xiaomi/Hisense/TCL sales growth rate was -23.85%/-8.95%/-18.95%/-8.90%/+58.05%/+17.76%/+4.38% respectively; In the same period, the growth rate of air conditioning offline brands, Gree/Midea/Haier/Changhong/Xiaomi/Hisense/TCL sales growth rate was -6%/-0.79%/-3.59%/-17.32%/+14952%/+11.11%/+27.59% respectively. Judging from the above data, Xiaomi air conditioners have a bright performance in terms of sales growth.

Although the sales performance of Xiaomi air conditioning products has risen gratifyingly, there is still a significant gap between Xiaomi air conditioners and Gree, which is a veteran air conditioning player. According to the industry online report, the domestic sales of Gree Electric household air conditioners last year were 29.79 million units, a year-on-year increase of 4.05%.

According to the 2023 annual report released by Gree Electric Appliances, in 2023, air conditioning products will earn 151.217 billion yuan of revenue for Gree Electric Appliances, a year-on-year growth of 12.13%, and this sector accounts for 73.76% of Gree Electric's total revenue in the current period.

In addition, Gree Electric also cited other data in the financial report to further confirm its dominant position in the industry. According to the data of Aowei Cloud Network, in 2023, the share of online retail sales of Gree brand household air conditioners will be 28.15%, ranking first; Among them, the share of online and offline retail sales of Gree brand cabinets was 30.28% and 34.43% respectively, both of which ranked first in the industry.

According to the "2023 China Central Air Conditioning Industry Development Report" released by i Media's "HVAC and Heat Pump", in 2023, Gree has achieved the first place in the sales scale of mainstream brands in the central air conditioning industry with a market scale of more than 20 billion yuan, and has won the first place in the central air conditioning market for 12 consecutive years.

Dong Mingzhu and Lei Jun's "Billion Gamble"

In fact, Dong Mingzhu and Lei Jun can be said to be old acquaintances, and the "billion gamble" between the two is a famous scene that will be talked about from time to time in the history of China's business development.

Back to December 2013, at the 14th China Economic Person of the Year Award Ceremony hosted by CCTV Financial Channel, Lei Jun and Dong Mingzhu took the stage to receive the award together as winners. At that time, the two were left on stage by the host to discuss their respective business models. Dong Mingzhu said that although the two are friends, they have to "pinch" here today.

First of all, Dong Mingzhu carried out an on-site investigation at the event, she asked the audience how many people were using Xiaomi, and then only a few people raised their hands. In this regard, Lei Jun responded sensitively, "This shows that our market space is very large, and 99% of people do not use Xiaomi."

Then, Dong Mingzhu asked Lei Jun again, if factories all over the world are closed, will Xiaomi still sell? Dong Mingzhu believes that Lei Jun is indeed very good, and he is indeed very good at marketing, but he wants to thank so many factories for serving him, "so when we achieve results, don't forget others."

Lei Jun quipped, "Dong is always sowing discord." Lei Jun further explained that Xiaomi can find the best factories and the best supply chain system. The industry has developed to this day, emphasizing the professional division of labor, the people who do the factory concentrate on doing a good job in the factory, and the people who do the products concentrate on making products. Before the words fell, Dong Mingzhu jokingly said, "Then I'll sell you the air conditioner", and Lei Jun said with a smile, "You can consider it."

Later, in the process of further discussion, Dong Mingzhu also shared interesting stories about the two in the background. Dong Mingzhu said that Lei Jun was "barred" with her in the background just now, Lei Jun said that he believed that he could surpass her in five years, Dong Mingzhu did not respond to him when he was backstage, but now she wants to say that it is impossible.

Seeing this, the host proposed that Dong Mingzhu make a bet with Lei Jun, and Dong Mingzhu explained that Lei Jun could not surpass her. In Dong Mingzhu's view, Xiaomi relies on price competition for online sales, while Gree Electric does not rely on price and technology, and tens of thousands of stores can also provide excellent services. If you cooperate with Ma Yun, "Isn't it my Gree in the world?" How could it be yours? ”

When the host announced the next link, Dong Mingzhu said that in fact, she praised Lei Jun is the majority, she thinks that Lei Jun has a spirit, the growth rate of millet is indeed amazing, but where are the lush roots, whether the green leaves can be permanent, or need to be considered.

The heated argument between Dong Mingzhu and Lei Jun once disrupted the process originally arranged by the host. After Dong Mingzhu made some remarks, Lei Jun also bought himself some time to speak.

Lei Jun said that Gree is a company that he respects very much, and Dong Mingzhu is also an entrepreneur that he respects very much, she has done a very good job in the field of traditional manufacturing and traditional consumer electronics, but in today's Internet era, the era of redoing consumer electronics with the genes of the Internet has begun, and Xiaomi is a typical representative of this direction.

At the end of this point of view, Lei Jun took the initiative to initiate a bet, "Whether the Xiaomi model can defeat Gree's model, I think it depends on the next five years." Lei Jun also asked the people of the whole country to testify at the scene, "Within five years, if our turnover beats Gree, Mr. Dong will lose me a dollar."

Dong Mingzhu took over and said that the first is impossible, and the second is to gamble one billion. Lei Jun asked the audience, "Just now, Mr. Dong challenged me for one billion yuan, do you think you can make this bet?" Lei Jun also smiled and asked Ma Yun on stage to vouch.

In the end, the host opened a new topic, allowing Dong Mingzhu and Lei Jun to expose each other's shortcomings. Lei Jun pointed out that the disadvantage of traditional enterprises is that there are many channel levels, so they are very far away from users; Secondly, the channel is too long, and the inventory is all on the road, which may cause great risks; Third, there are too many things to do, so that enterprises can't really concentrate on doing what they do best.

Dong Mingzhu said that the other party is full of confidence, but this may be his crisis, and his biggest problem is that he does not have the idea of win-win. To do business, we must have a win-win mentality, and we can't pass on all the risks to others.

A few years have passed, and the "billion gambling contract" between Dong Mingzhu and Lei Jun has also reached the moment to reveal the answer. In March 2019, Xiaomi released its first annual report after listing. According to the financial report, as of the end of 2018, Xiaomi recorded a total revenue of 174.915 billion yuan that year. According to the financial report released by Gree Electric in April of the same year, in 2018, Gree Electric recorded a total revenue of 198.123 billion yuan.

In other words, Xiaomi's turnover did not exceed that of Gree Electric in 2018, which means that in this "billion bet" set five years ago, Dong Mingzhu won Lei Jun. However, in 2019, Xiaomi's revenue of 205.839 billion yuan exceeded that of Gree Electric Appliances of 198.153 billion yuan.

In a public speech in August 2020, Lei Jun also responded to the "billion bet" many years ago, the bet in five years was lost, but in the sixth year we won, "Every time I think of this bet, I feel very regretful and guilty, why do we want to provoke Sister Dong?" Recently, I have only thought clearly step by step on the reflection that the 2013 millet is in full swing, full of confidence, and dares to compare with Gree, which essentially shows that we have inflated. ”

Gree Electric's diversification attempts face challenges

Looking back, after years of development, Gree Electric Appliances helmed by Dong Mingzhu and Xiaomi founded by Lei Jun are not only the leading players in their respective fields, but also invade each other's hinterland.

For example, Dong Mingzhu once led Gree to launch the Gree mobile phone and launched an attack on the track where the Xiaomi mobile phone is located. In March 2015, Dong Mingzhu announced that Gree mobile phones had been made and were in use. In June of the same year, Gree mobile phones were put on sale. After that, Gree successively launched the second and third generations of Gree mobile phones. However, in today's mobile phone market, it is difficult to find Gree mobile phones. In May 2023, according to Jiemian News, it was learned from multiple independent sources that Gree Electric had disbanded the core team of mobile phones.

The Xiaomi air conditioner mentioned by Dong Mingzhu at the shareholders' meeting this time is Lei Jun's masterpiece in the air conditioning track. It is reported that as early as 2015, Xiaomi and Midea launched a "youth smart air conditioner". In August 2017, Xiaomi ecological chain enterprise Zhimi Technology once again released a 4399 yuan full DC inverter air conditioner, which was jointly developed by Zhimi Technology and Changhong Air Conditioner, and produced by Changhong Air Conditioner. In 2018, Xiaomi released another Mijia Internet air conditioner priced at 1999 yuan.

If Lei Jun and Dong Mingzhu's "billion gambling contract" is renewed again, according to the financial data released by Xiaomi and Gree Electric Appliances, the two companies have their own wins and losses in revenue and net profit indicators.

According to the financial report, in 2023, Xiaomi will record a total revenue of 290.97 billion yuan and a profit of 17.474 billion yuan for the year, while Gree Electric's revenue will be 205.018 billion yuan and the net profit attributable to the parent company will be 29.017 billion yuan in the same period. In terms of revenue scale, Xiaomi is better than Gree Electric; And in terms of profitability, Xiaomi is inferior to Gree Electric.

Although Dong Mingzhu and Lei Jun had a fierce debate on their respective business models many years ago, this time Dong Mingzhu directly targeted Lei Jun's Xiaomi air conditioner, but in fact, Dong Mingzhu and Lei Jun have some things in common.

As two outstanding entrepreneurs, Dong Mingzhu and Lei Jun are the souls of their respective enterprises with absolute right to speak, and both of them have outstanding strengths in leadership and decision-making. In the Internet era, the two are even more popular Internet celebrity entrepreneurs, and they will appear on the hot search of social platforms from time to time.

In addition, in order to create more revenue possibilities, the companies helmed by Dong Mingzhu and Lei Jun have also made various attempts to diversify. In the previous financial report released by Gree Electric Appliances, Gree Electric Appliances introduced itself as a diversified, technology-based global industrial group, which owns three major consumer brands of Gree, TOSOT and Jinghong and industrial brands such as Lingda, Kaibang and Xinyuan, covering two major fields of household consumer goods and industrial equipment.

Specifically, Gree Electric Appliances covers household air conditioners, HVAC, refrigerators, washing machines, water heaters, kitchen appliances, environmental appliances, smart buildings, and smart homes in the consumer field; In the industrial field, Gree Electric covers high-end equipment, precision molds, refrigeration and refrigeration equipment, motors, compressors, capacitors, semiconductor devices, precision casting, basic materials, industrial energy storage, renewable resources, etc.

At the shareholders' meeting, Dong Mingzhu said that Gree Electric Appliances has realized the transformation from "good air conditioning" to "good electrical appliances", and hopes to work with dealers to develop the business of ice washing household appliances. Gree Electric has released a number of new refrigerators and washing machines, and plans to set up refrigerators and washing machine sales companies in every province in China. In the face of this year's market pressure, Dong Mingzhu said, "Air conditioning is a home, to do the best, the growth point is in the refrigerator and washing machine."

Turning to Xiaomi, in addition to the mobile phone business that started, Xiaomi's IoT and consumer products have also become one of the choices of many users. Not long ago, Xiaomi released Xiaomi SU7 after entering the new energy track, which made Lei Jun once the top among entrepreneurs, and also built a super intelligent ecology of "people, cars and home ecology" for Xiaomi. However, due to the fact that many products adopt the OEM model, Xiaomi is often involved in OEM doubts.

It is worth mentioning that Dong Mingzhu stated that he would focus on the ice washing sector, and Xiaomi also has a layout. According to the financial report released by Xiaomi, the shipment of Xiaomi refrigerator products exceeded 2 million units last year, doubling year-on-year. During the same period, the shipment of Xiaomi's washing machine products exceeded 1.3 million units, a year-on-year increase of 24%.

Although Gree has made a lot of efforts in diversification, when the outside world mentions Gree, the first reaction seems to be Gree's air conditioning products. In fact, from the perspective of revenue proportion, air conditioning products are indeed the pillar of Gree's revenue. Taking 2023 as an example, more than seventy percent of Gree Electric's annual revenue comes from air conditioning, while its revenue from household appliances, industrial products, intelligent equipment, green energy, other main and other businesses accounts for 1.96%, 4.9%, 0.33%, 3.48%, 0.77%, and 14.42% respectively.

Some analysts believe that in the field of air conditioning that Gree Electric is proud of, Gree Electric is facing not only one opponent of Xiaomi air conditioner, but also the strength of Midea, Haier, Oaks and other opponents should not be underestimated. As an Internet celebrity entrepreneur who is still active on major hot search lists from time to time, although Dong Mingzhu has no shortage of topics, his appearance on the hot search is often accompanied by various controversies. For example, the resignation of former secretary Meng Yutong, the Wang Ziru incident, the remarks on the workers, and the rose air conditioner designed by himself have all pushed Dong Mingzhu into the spotlight of public opinion.

However, regarding the Internet celebrity label labeled by the outside world, Dong Mingzhu said, "Many people say that Dong Mingzhu likes to be an Internet celebrity, not that I deliberately want to be an Internet celebrity, but that Gree's products are deeply rooted in the hearts of the people." If Gree's products are not good, am I an Internet celebrity? ”

It is worth mentioning that at the shareholders' meeting held this time, Dong Mingzhu also took the initiative to talk about the topic of retirement, "Maybe I will retire next year." However, Dong Mingzhu also said, "It's not okay to leave a 'mess' for the successor!" ”