Reshuffle in China's air-conditioning industry: Gree “fell off the throne” and moved into third place, the new millennium against the old king.
As the end of August approached, the air conditioning industry entered a period of analyzing the results and preparing for the new refrigeration season. In the future, a drop in sales of air conditioners of large appliance manufacturing companies will become an inevitable event, and competition between the giants will not stop. However, Gree's former conditioning giant fell off the throne and moved into third place, and the new king of the air conditioning industry was born, this is the Midea Group.
When it comes to air conditioning, many people still want Gree Electric products. In the end, Gree has been in the air conditioning industry for many years, "good Gree air conditioning" has become a famous advertising slogan. Regardless of brand influence or air conditioning sales, there are always rivals in the industry, but no one could shake Gree’s status.
However, this situation has now completely changed, and MIDEA has surpassed Gree to become the new king of the industry. Not so long ago, well-known research institutes announced the latest statistics on the air conditioning industry. According to the data, Gree took third place in online sales in the first half of this year, and its market share fell to 16%. In second place is AUX with a market share of more than 22%.
The industry’s first, naturally, is the MIDEA group, with a market share of more than 35%, surpassing the two major giants in the field of air conditioning and MIDEA officially ascended the throne. In fact, MIDEA has not only shown its strength in the online market, but also achieved good results in the offline market. We can say that the new MIDEA retail strategy has been successful.
At the previous shopping festival 818 (“Black Friday” for air conditioning inside China), Midea managed to win first place in the field of air conditioning with an advantage throughout the country. The rest of the big companies, such as Gree and Haier, follow, but the advantage of MIDEA is growing rapidly.
In addition to its leading air conditioning market share, Midea Group’s revenues outperformed its competitors. Statistics show that the revenue of Midea Group last year exceeded 260 billion yuan, while the revenue of its main competitor Gree Group exceeded only 200 billion yuan and even lost to Xiaomi. However, the big difference between Midea and Gree is that Midea's business is more balanced by selling the full range of home appliances, while Gree is more dependent on the air conditioning business.
There are three key factors to Midea’s victory that could become a new industry trend. First, in recent years, Midea has actively entered the cities of the third and fourth levels and has accumulated a large number of users of regional markets. Secondly, Midea has significantly improved its innovation and the quality of its products, and consumers are very enthusiastic about it. Finally, Midea has strengthened brand building, and Midea’s brand influence has grown to outperform its competitors.
Summary: As Midea surpassed Gree and became the new overlord of the air conditioning industry, this industry will usher in a new round of reshuffle in the future. Technical innovations, brand image, product quality and the creation of new distribution channels will be key factors affecting the future market.
And finally - Gree is selling 15% of its shares! 40 billion yuan sale announced in Zhuhai!
In the evening of September 2, Gree Electric announced that the controlling shareholder intends to agree to sell part of the company's shares. During the public offer period, a total of two potential buyers were presented to the Gree Group to transfer the purchase request, the corresponding contractual deposits were fully paid. Potential buyers of Gree are: Investment Partnership Zhuhai Mingjun (limited liability partnership), Gyu Houde Consortium of investment (Zhuhai) partnerships (limited liability partnerships), GENESIS FINANCIAL INVESTMENT COMPANY LIMITED.
Gree Electric recently announced the results of its semi-annual report for 2019. According to the report, in the first half of the year, Gree Electric achieved operating income (revenue) of 98.341 billion yuan, up 6.89% over the same period last year, total profit before taxes amounted to 13.75 billion yuan, an increase of 7. 37% year on year, net profit after tax amounted to 13.393 billion yuan. Annual growth was 6.03%, and earnings per share were 2.29 yuan.
In fact, Gree's performance is still good, but growth has slowed: in 2017 and 2018, Gree's revenue and profits increased by 44.86% and 16.97%, respectively, compared with 7.37% this year.
