Dong Mingzhu shouldn't "talk about cheapness": It's time for Gree to transform

Gree air conditioners are very good, but Dong Mingzhu recently called for a price war to "clear the field" and bring down Chigo and Hisense, and to kill those shoddy and counterfeit products. This is impossible.

Price wars have always been a battle of wits, with no bottom line to see who is cheaper.

I believe the purpose of Dong Mingzhu's statement is not to clear the field, but to move secretly to clear out goods and inventory, strengthen capital chain control, or to pave the way for new products and new businesses.

Compared with other large and small appliances, air conditioners are purchased more infrequently and are durable goods, which are more affected by real estate regulation. The more concentrated and large the sales volume is in a few years, the slower the replacement of the stock will be.

Gree has been one of the biggest beneficiaries of China's real estate industry over the past few years. Now the good times are over and it must adapt to regulation.

In terms of innovation, we need to tap into the value of services. When it comes to tapping into the value of services, it actually means extending the product life cycle through various value-added means, which is mainly reflected in the soft aspects.

In terms of hardware, it needs to enter the field of smart hardware and smart home. Especially smart home with environmental protection, energy saving, water resources and air purification as the core, this should be one of its main paths. It can focus on the structure and system-level products in an environment, and even hide behind the scenes.

In terms of platform, Gree also has a huge manufacturing industry. It can learn from Haier and build an open platform, but it is not oriented to the C-end, but mainly to the B-end, supplemented by the C-end, and move towards intelligent manufacturing. This requires it to transform the past large-scale production into a small-volume, diversified, and responsive model. This model must establish a cloud computing platform and an IoT ecosystem covering components, systems, and complete machines of many peers, with an incubation function. In terms of architecture, it is similar to the strategy planned by Zhang Ruimin for Haier and Guo Taiming for Foxconn, and also similar to the plan of Texas Instruments, but with different product forms.

Without an open platform, Gree will face a more difficult future than other home appliance companies. It is a B-type company as a whole, although it is in the homes of countless people.

In the global air-conditioning market, Gree's vertical integration capabilities are among the best. It has a large number of core patents and indeed has the foundation. What it lacks may be the soft part, the ability to connect people with terminals, people with services, and the so-called Internet spirit.

If Dong Mingzhu keeps shouting about clearing the field and defeating opponents every day, this attitude will have no way out.

Gree can definitely become a behind-the-scenes platform in the fields of air-conditioning and residential water and electricity resource management, and a research and development and manufacturing platform for many smart home appliance companies at home and abroad.

This requires Dong Mingzhu to be open, not controlling. To understand what Jack Ma said, the trend of change from IT to DT, only by becoming an adult can you become yourself.

Gree's traditional channel system is very distinctive and is already an open strategy, but it is still under overall control. It is a self-centered, limited-sharing model. In addition, its operating mechanism lacks Internet support, making it difficult to adapt to future requirements.

At the beginning of the year, I joked that Dong Mingzhu should join hands with Wang Jianlin's main business, because Wanda's operations are moving from external growth to exploring vertical interests, and using Internet means to transform itself, trying to transform Wanda shopping malls and hotels intelligently. Later, I saw that Wang Jianlin also gave Gree Air Conditioner free advertising. Although it may not be a deep cooperation in one step, it may still be some central air conditioning for the time being, but I think this trend has been established.

If Gree's open platform can continue to obtain major projects like Wanda in the future, its back-end IoT open platform will receive tremendous support.

Dong Mingzhu's mindset determines Gree's future. It is a question for Gree whether to move towards an open platform for intelligent manufacturing and establish an ecological system, or to continue to control and compete with peers in a life-and-death struggle.

At least for now, I haven't heard from Dong Mingzhu. If she really thinks so, I think it's a sign of danger for Gree. However, this strong woman actually has many means. I still think that her so-called "clearing the market" speech is not a short-term clearance, but a long-term plan.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.