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Source: Times Finance Author: Ke Meng

Dong Mingzhu takes action again to boostGree Electric AppliancesDiversified development.

Recently, Dong Mingzhu attended the strategic conference of Gree Electric Appliances (000651.SZ) and revealed that Gree Electric Appliances has launched a beauty instrument. She claimed, "As long as you use it for a week, you will find that you have become more beautiful." At the conference, Dong Mingzhu called on dealers to place orders.

This is another cross-border attempt by Gree Electric after launching mobile phones, new energy, and pre-prepared meals. The new beauty instrument launched by Gree Electric is priced at 9,800 yuan, which is much more expensive than many competing products. The product has been launched on Gree Dong Mingzhu's mini program, but has not yet been launched on Taobao,JD.comSold on other platforms.

Times Finance noticed that the product has been online on Gree Dong Mingzhu's mini program for 8 days (August 5 to August 12), and the sales volume is not very hot, with only over 1,050 units sold. The product is expected to be shipped after August 25. Times Finance contacted the relevant person in charge of Gree Electric Appliances regarding the core technology of the beauty instrument, effect data support, and industry competitive advantages, but no response was received as of press time.

The launch of beauty devices has long been planned

There were early signs that Gree Electric Appliances would enter the beauty instrument market.

According to Tianyancha data, Gree Electric Appliances applied for beauty instrument-related patents as early as September last year. Currently, one utility model patent has been authorized, and another eight beauty instrument-related invention patents are in the public or substantive examination stage.

On April 22, Gree Electric invested in the establishment of Zhuhai Gree Medical Equipment Co., Ltd. with a registered capital of 10 million yuan. Its business scope includes medical services, medical beauty services and the production of Class II and Class III medical devices.

Gree Electric Appliances launched a beauty instrument, and the price caused controversy.

A search by Times Finance found that in the best-selling list of electronic beauty devices on Taobao, most beauty devices are priced between 2,000 and 4,000 yuan, and Gree's beauty devices are priced higher than many popular products. The prices of the top five beauty devices are 3,199 yuan, 2,399 yuan, 2,399 yuan, 1,399 yuan, and 3,998 yuan respectively.

"We usually choose well-known overseas brands like Ya-Man and Refa, and then do a second round of screening based on demand. If there is no huge user base to support it, I will not easily try a new brand." Wang Ping (pseudonym), a mainstream customer of beauty devices in a third-tier city, told Times Finance that her expected price for purchasing similar products is usually less than 5,000 yuan, and no one in her circle is currently chasing after Gree's new products.

According to the information on the product page, Gree beauty instrument has functions such as EMS microcurrent, ion pulse introduction, and mechanical vibration massage, which can lift and tighten the skin.

A distributor of home appliance stores in Shandong told Times Finance that he has not yet decided whether to purchase Gree Electric's newly launched beauty instrument. "Air conditioners are still Gree's best-selling category. We don't have a comprehensive understanding of the functions of beauty instruments, so we are not considering purchasing them for the time being."

The beauty instrument market is growing rapidly, but the space is limited

Gree Electric Appliances started out as an air conditioner manufacturer and has been vigorously promoting a diversification strategy in recent years, but the results have not been significant.

Gree Electric still has not gotten rid of its dependence on air conditioners. The 2023 financial report shows that air conditioner revenue accounts for as much as 74.14% of Gree Electric's revenue, 2.78 percentage points higher than in 2022.

On the other hand, the home appliance giantMidea Group(000333.SZ) and Haier Intelligent (600690.SH), the two leading companies, have been continuously promoting diversified businesses. Financial data shows that in 2023, the revenue contributed by HVAC has dropped to 43.31% of Midea Group's revenue. 36.20% of Midea Group's revenue comes from consumer appliances (including washing machines, refrigerators, kitchen appliances and other home appliances).robot, automation systems and other manufacturing industries accounted for 10.01% of the revenue.Haier Smart HomeRefrigerators, washing machines and kitchen appliances accounted for 31.36%, 23.54% and 15.98% of the company's revenue respectively.

In 2024, the air-conditioning market performed relatively poorly and the price war intensified. According to the omni-channel data of Aowei Cloud Network, in the first half of 2024, the omni-channel sales volume of the air-conditioning market was 33.15 million units, a year-on-year decrease of 11%; the sales revenue was 111.4 billion yuan, a year-on-year decrease of 14.5%.

The air-conditioning market is sluggish, while the beauty instrument market is showing good growth momentum. According to the "2020-2026 China Beauty Instrument Industry Market Size Research and Development Trend Analysis Report" released by Zhiyan Consulting, the scale of China's home beauty instrument market is close to 10 billion yuan in 2021, and is expanding at an annual compound growth rate of over 30%. It is expected that the overall scale will exceed 20 billion yuan in 2026.

Although beauty devices are growing significantly, they are unlikely to become a major market item, and the market potential is much narrower. In addition, beauty devices have been repeatedly criticized by consumers for exaggerated descriptions and false advertising. Supervision is becoming increasingly strict.

In July 2024, the National Medical Products Administration issued the "Announcement on Further Clarifying the Requirements for Radiofrequency Therapy Devices", which clearly stated that from April 1, 2026, radiofrequency therapy devices and radiofrequency skin therapy devices shall not be produced, imported or sold without obtaining a medical device registration certificate in accordance with the law.

Gree Electric's 2023 annual shareholders' meeting was held in June this year. Dong Mingzhu publicly stated at the meeting: "You asked me where Gree's future growth point is? I will tell you that it is in the diversified products such as refrigerators and washing machines." She stated that Gree Electric will "launch products that meet the contemporary life needs of consumers through continuous technological innovation."

An industry insider pointed out to Times Finance that there is still no absolute leading player in the beauty instrument industry, and most home appliance companies only use beauty instruments as a supplement to their main products. "It is a bit unrealistic to expect beauty instruments, which have a small market scale, to become a breakthrough in Gree Electric's diversification strategy."