Companies in the GBA | Thinking Out of the Box, Gree Brings Revenue Back to 200 Billion yuan

Recently, Dong Mingzhu changed her usual "iron lady" look, and showed up in Luoyang multiple times in Han-style dress, making headlines once again. Hidden behind this image change is Gree's strategic transformation. On May 22, Gree released several new products, announcing a high-profile entrance into the "refrigeration and cleaning appliance" market. According to Dong, Gree has completed the upgrade from "making good air conditioners" to "making good electric appliances."

"Gree only makes good air conditioners" was the foundation of its success for over 30 years. Since the Reform and Opening up, favorable policies and geographical advantages of the Pearl River Delta have provided fertile soil for famous home appliance enterprises to sprout and grow, including Gree, Media, Skyworth, and TCL. Gree's star product, air conditioners, is its core competitiveness that makes it stand out among all the heavyweight competitors, as over 70% of its annual revenue comes from the AC sector, and its central AC has ranked first in market share for 12 consecutive years.

However, for the past few years, Gree was facing a "midlife crisis." It struggled to achieve the 600-billion-yuan revenue goal set in 2018. In 2023, the number was only 200 billion yuan. Meanwhile, the other two "White Goods Giants", Media and Haier, both surpassed 370 billion yuan in revenue for the same year. One single star product is clearly not enough for long-term growth. So Gree is exploring new markets, from mobile phone to new energy, and even medical equipment and chips, even though success is yet to be seen.

Bumpy as it is, Gree never stops the quest for business diversification. In 2013, Gree marched into the high-end equipment market, with smart equipment products now covering more than 10 areas, including industrial robots, CNC machine tools, smart logistics and warehouses, and industrial automation. It also managed to find its footing in the high-end markets of North America and Europe. Gree's CNC machine tools now have an overseas supply ratio exceeding 75%.

As it keeps upping its game, Gree gains more confidence to go global. In 2023, Gree's products were selling in over 190 countries and regions, with overseas revenue of more than 24.9 billion yuan and a gross profit margin of 23.75%. And its overseas sale performance is mostly relied on self-owned brands, accounting for 70% of its total revenue in 2023, with a year-to-year growth of 8%.

Independent R&D relies on innovation driven by talent. In 2023, Gree's R&D staff exceeded 15,000, making up over 21% of its workforce. As of April 2024, Gree has acquired 21,638 authorized patents from home and abroad, established more than 14,000 enterprise standards, and proposed 48 international and foreign standards in the past 5 years.

Though Gree had a good year in 2023, the pressure on income growth continues to mount in 2024 while comparing with its rivals. With the refrigerator and washing machine business being the next top priorities, the future of Gree's business diversification is worth anticipating.

出品：南财国际传播中心 21新媒体中心 创意互动中心

策划统筹：于晓娜 丁青云

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英文翻译&配音：李莹亮

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审校：魏雯静 黄志明