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2024.08.14

Word count: 2135, reading time: about 4 minutes

Introduction：Further reducing the channel levels is an important part of Gree's new retail channel reform. Wang Ziru and Lu Luqun are Dong Mingzhu's left and right arms in promoting channel reform.

Author |Wang Zhen, China Business News

Gree Electric Appliances (000651.SZ, Gree for short) is stepping up its new retail business. China Business News reported that the air-conditioning industry will enter the new refrigeration year of 2025 (the new cold year) in August this year. Gree's air-conditioning dealers in Guangdong, Guangdong, Shandong, Hebei and other places will place orders on Gree's new online wholesale system in the new cold year, changing the past practice of purchasing goods from Gree's regional sales companies, reducing sales levels and coping with intensified competition.

It is understood that Gree Electric's new online wholesale system was promoted and improved by Wang Ziru under the guidance of Dong Mingzhu, chairman and president of Gree Electric. Currently, Wang Ziru is also the person in charge of Gree Electric's digital channel reform project.

New retail is implemented in Guangdong, Shandong and Hebei

A South China Gree store owner told the First Financial reporter that Gree will implement new retail in Guangzhou and Foshan in the new cold season, and has held a meeting on August 12 to explain the relevant situation. In the future, dealers will directly place orders and purchase goods from Gree's new online wholesale system. Gree's new online wholesale system is not the Gree Dong Mingzhu store, but a brand new system. At present, dealers are still in the transition stage of placing orders using the new operation mode, and it is estimated that they will no longer purchase goods from Gree Guangzhou-Foshan Company in the future.

A person from Gree Guangfo Company told the reporter that Gree's new retail approach has been implemented in Guangzhou, Foshan and Dongguan, and is expected to be promoted in other areas of Guangdong. Accordingly, the specific functions of Gree's regional sales companies will change. With the online wholesale system, it will be more convenient for merchants to place orders, make payments, and learn about new products and inventory.

"Gree's new retail and new marketing have been relatively mature," said a person related to Gree Guangzhou-Foshan Company. He believes that Gree's new online wholesale system can make the internal flow of people, money and materials more orderly and efficient, and reduce the communication costs of compatibility between different internal systems.

According to the above-mentioned person, Gree Online Wholesale System is a B2B e-commerce platform independently developed by Gree Electric Appliances, which provides Gree's merchants with one-stop services such as online ordering, logistics distribution, project handling, and business analysis. Gree Online Wholesale System includes multiple modules such as product management, order management, delivery management, settlement management, and customer management, realizing the digitalization and intelligence of sales, improving the business efficiency, optimizing supply chain management, and improving the market service level.

Regional sales companies and the practice of "off-season payment and year-end rebate" were once the magic weapon for Gree to become the leader in the air-conditioning industry. After promoting new retail, have these practices changed? The above-mentioned person said that now it is not limited to off-season payment. There are different policies every month, and there will be rebate designs if there are policies. After dealers place orders on the Gree headquarters online wholesale system, Gree regional sales companies also have the function of formulating sales policies, but the headquarters will supervise to ensure the interests of dealers and market pricing are reasonable and standardized, and can also better protect the interests of consumers, so that fakes and channel goods cannot escape.

Not only in South China, Gree has also accelerated the implementation of the new retail model in Shandong, Hebei and other places. A person from Gree's Shandong sales company told the First Financial reporter that Gree has also started to promote new retail in Shandong in the new year. A Gree dealer in Hebei also revealed to the reporter that they also placed orders and received goods through Gree's new online wholesale system in the new year.

Wang Ziru stated at the 2025 Cold Year Gree Electric Appliances (Guangfo) New Marketing Strategy Summit on August 12 that Gree Electric Appliances has made unprecedented investment in new retail and is determined to reform. It has established a research and development team of more than 1,000 people and built a new digital marketing system to open up the entire chain of dealer procurement, warehousing and logistics, terminal sales, and after-sales service.

In order to cope with the challenge of channel fragmentation, Wang Ziru said that Gree will use digital tools to enhance channel order, integrate online and offline channels, find new traffic ports and growth curves, re-empower dealers, and help dealers make a smooth transition in the most gentle way.

The owner of the aforementioned South China Gree store said that he is still learning how to place orders and get goods on Gree's new online wholesale system. The aforementioned Gree Hebei dealer believes that while implementing new retail, Gree is stepping up efforts to promote refrigerators and washing machines, and this development direction is correct, because the domestic air-conditioning market has reached its "ceiling", and Gree is seeking a breakthrough through the above measures.

Cut channel layers to improve competitiveness

In May this year, Gree Electric established the Home Appliances Business Department, merging the functions and personnel of the Home Air Conditioner and Small Appliances Business Department and the Refrigerator, Washing Machine and Life Appliances Business Department, and appointed Lu Luqun, who had been in charge of Gree's Hebei sales for the past two years, as the Sales Director, in charge of the Home Appliances Business Department. "After General Manager Lu (Lu Luqun) takes office, there will be some new ideas," said the above-mentioned Gree Hebei dealer.

The reporter noticed that on August 2 this year, Gree Electric held a strategic conference for refrigerators and washing machines in Shijiazhuang, Hebei, and Dong Mingzhu, Wang Ziru, Lu Luqun and others attended. Wang Ziru and Lu Luqun have become Dong Mingzhu's right-hand men in promoting channel reform.

Recently, it was revealed that Wang Ziru was restricted from consumption. The relevant person from the aforementioned Gree Guangzhou-Foshan Company believed that Wang Ziru had done a lot of research and promotion work in promoting the implementation of Gree's new retail.

According to the AVC data compass, as of August 11, 2024, domestic offline channel air conditioner sales decreased by 11.51% year-on-year, and Gree's share was 31.96%, ranking first in the industry, an increase of 0.65 percentage points year-on-year; domestic online channel air conditioner sales increased by 1.73% year-on-year, and Gree's share was 23.44%, following Midea, a year-on-year decrease of 3.73 percentage points. Gree's average price was 3,425 yuan, while Midea's average price was 3,131 yuan. In addition, Xiaomi Air Conditioner's online share this year reached 12.09%, an increase of 4.51 percentage points, and Xiaomi's average price was 2,219 yuan.

An air-conditioning industry analyst told the First Financial reporter that, at present, Gree's biggest challenge is the solidification of its channel structure and brand strategy, and further reducing the channel level is an important part of Gree's new retail channel reform. Currently, Gree's home air-conditioning shipments rank second in the industry.

Dong Mingzhu stated at Gree Electric Appliances' 2023 annual shareholders' meeting on June 28 this year that in the era of big data, offline stores must also develop online. Initial results have been achieved, but changes are still needed. Ultimately, they must bring convenience to consumers, benefits to companies, and make dealers feel more at ease. At the same time, Gree's growth points are refrigerators and washing machines, and independent channels will be set up. Gree currently has a team to promote channel changes.

Gree Electric Appliances' revenue exceeded 200 billion yuan again last year, setting a new record for its own performance. However, as air conditioners continue to be its main business and its revenue growth rate is slower than that of its main competitors, it once again failed to make the Fortune Global 500 list this year.

WeChat Editor| Gao Lishan