Midea möchte das "Haushaltsgeräte-Label" abschaffen.

Fang Hongbo's "Words and Deeds" as Midea Plans to Invest 50 Billion Yuan in Cutting - edge Technologies

Midea plans to invest 50 billion yuan in the field of cutting - edge technologies in the future.

Recently, Wang Jianguo, the vice - president of Midea, revealed at the "Industry Conference on the New - quality Development of the Top 100 Light Industry Enterprises" that Midea will invest at least 50 billion yuan in R & D funds in the next three years, targeting frontier fields such as large AI models, new energy, robotics, and embodied intelligence.

Midea's increased investment in cutting - edge technologies is not only a move to strengthen its moat but also a response to the current competitive anxiety in the home appliance industry.

As the undisputed leader in the domestic home appliance industry, Midea has faced numerous challenges in the past two years.

On the one hand, Midea's core home appliance business is under pressure from Xiaomi and emerging brands. For example, Xiaomi has entered the markets of refrigerators, washing machines, and air conditioners. Additionally, emerging brands like Roborock and Dreame have joined the large - home - appliance industry, posing a threat to Midea.

On the other hand, new forces are catching up in terms of technology. For instance, Ecovacs announced yesterday that it will establish a manufacturing project for robot components and main bodies in Huzhou, Zhejiang. This means that the top five domestic floor - cleaning robot companies, including Roborock, Dreame, and Ecovacs, have all entered the robotics track.

The home appliance industry has a chain of transformation from technology to manufacturing and from manufacturing to efficiency. Now, with emerging forces entering the "robotics track," known as the pearl of industrial manufacturing, it represents a systematic competition in the home appliance industry for Midea.

Facing the chaos and rise of the domestic home appliance and robotics sectors, Fang Hongbo, the chairman of Midea, has mentioned competition multiple times in recent public appearances.

He said that "tactically, we should pay attention to Xiaomi, but strategically, we are not afraid of it." Meanwhile, Fang Hongbo also believes that the possibility of a great technology company emerging from the home appliance industry is extremely low.

Correspondingly, Midea wants to shed its home - appliance label. In Fang Hongbo's view, Midea's core direction in the future is the To B business, which actually means the output of Midea's own technological strength to the industry.

However, at the same time, while Fang Hongbo advocates not getting caught up in the involution of the home appliance industry, claiming it has no future, he is also accelerating the layout of frontier technologies. It can be described as "talking while acting."

1. Is Midea's Foundation Manufacturing or Technology?

At the beginning of the year, Midea carried out a streamlining initiative. The "simplified work style" represented by the "no - overtime" policy pushed Midea into the public spotlight.

Shortly after Midea issued the "no - overtime" ban, news of Midea's layoffs emerged on many social platforms. Although Midea responded that there were no layoffs, just normal personnel flow.

However, it cannot be ignored that Midea is facing competition on multiple fronts.

For example, Midea and Xiaomi have overlapping businesses in many areas, forcing Fang Hongbo to respond to the competition with Xiaomi in multiple public forums, including the shareholders' meeting.

Since this year, Midea has been involved in multiple controversies, and all these controversies point to the fact that:

Relying solely on home appliances as the company's foundation will only lead to involution in the domestic home appliance industry. Midea needs to shift its foundation from home appliances to technology.

For example, the saturation of the home appliance industry has forced Midea to adjust production capacity and streamline personnel. To outperform emerging brands in the competitive home appliance market, Midea needs to prove its technological and craftsmanship accumulation over the years. If it only engages in market - level competition, Midea will surely be at a disadvantage.

Fang Hongbo made a judgment on this issue long ago. In 2023, Fang Hongbo said that

"The home appliance industry has entered the mature stage, which is a stock market. For Midea to achieve long - term development, it must undergo industrial upgrading."

One of Fang Hongbo's responses to the competition with Xiaomi is quite interesting. He said that

"The possibility of a great technology company emerging from the home appliance industry is almost zero."

This statement is generally considered to be addressed to Lei Jun of Xiaomi, but in fact, it can also be seen as Fang Hongbo talking to himself.

As the leader in the domestic home appliance industry, Midea's foundation is not only manufacturing but also a high proportion of R & D investment. It can be said that half is manufacturing, and half is technology.

Wang Jianguo revealed that Midea has invested nearly 60 billion yuan in R & D in the past five years. The four strategies mentioned in Midea's 2024 financial report - "technological leadership, direct access to users, digital and intelligent drive, and global breakthrough" - the first one is to "increase the layout and investment in core and frontier technologies to achieve technological leadership."

In 2024, Midea's R & D expenses reached 16.2 billion yuan, and in 2023, it was 14.6 billion yuan. The total R & D expenses for the two years reached 30 billion yuan, comparable to technology companies in terms of both proportion and amount.

In particular, Midea's current industrial chain includes not only home appliance manufacturing and sales but also a series of upstream and downstream home - appliance manufacturing enterprises such as Welling Motors, KUKA Robotics, and Kelu Electronics.

For example, Midea was actually the earliest home appliance enterprise in China to layout industrial robots. In January 2017, Midea Group finally acquired a total of 94.55% of KUKA's shares at a price equivalent to 29.2 billion yuan and completed the full acquisition and privatization in 2022.

KUKA was once one of the world's top robot companies, with businesses including automotive robots, service robots, and sports robots. However, with the explosion of the domestic embodied intelligence track, KUKA also has to face competition from many new entrants.

Over the past few decades, Midea has acquired a series of enterprises in motor manufacturing, robotics, compressors, etc., to strengthen its control over the upstream and downstream of home appliance manufacturing. Meanwhile, while these enterprises provide technological support for Midea, they have also become leading domestic suppliers. Midea later spun off these suppliers into independent To B companies.

2. What Else Does Midea Have Beyond Home Appliances?

Midea's strength lies in integration.

China Merchants Securities has compiled a chronicle of Midea's acquisitions, which shows that Midea started its acquisition journey in 1998. In addition, acquisitions of foreign targets have contributed to the formation of Midea's current empire.

Over the past two decades, Midea has acquired and integrated a large number of brands and industrial - chain companies under its umbrella. These enterprises have either become independent sub - brands of Midea or indispensable links in the industrial chain.

However, when Midea started to export its supply capabilities externally, it found that it was not an easy task.

Fang Hongbo's vision for Midea's revenue structure is that the B - segment business should account for half. However, there is still a large gap between the reality and the goal. In 2024, Midea's B - segment business revenue was 104.496 billion yuan, accounting for only 25.67% of the total revenue, less than half the size of the home - appliance business. Moreover, the revenue growth rate of this segment was 6.87%, also lagging behind the 9.41% growth rate of the home - appliance business.

Against the backdrop of the gradually limited growth space of the home - appliance main business, Midea Group's B - segment business has never been able to catch up with the C - segment business, failing to give sufficient confidence to the capital market.

In 2024, Midea's robotics business revenue was 28.7 billion yuan, less than the 31 billion yuan in 2023, showing a decline in revenue.

Beyond products, Midea is also integrating its technology routes.

The targets Midea has acquired are not only product brands but also related supply chains, such as KUKA Robotics, Welling Motors, and Jiangsu Qingjiang Motors.

In addition to acquisitions and internal R & D, Midea has also established Midea Capital to invest in many enterprises, including those in the fields of chips and artificial intelligence.

However, judging from the investment frequency of Midea Capital, it has not made any investments since 2024. It is not yet known whether this means a change in Midea's layout strategy for frontier technologies.

3. Midea is Anxious as New Entrants are Catching Up Madly

Midea's anxiety may stem more from the pursuit of new entrants.

Midea's moat comes from two aspects: on the one hand, the efficiency optimization of the manufacturing industrial chain; on the other hand, the output of capabilities brought about by technological investment.

However, new entrants are now rushing into the robotics industry, which means a decline in Midea's competitiveness.

On July 28, Ecovacs announced a robotics project in Huzhou, Zhejiang, indicating that the top five domestic floor - cleaning robot companies have all entered the robotics track. Earlier, Roborock and Dreame launched two floor - cleaning robots with robotic arms at AWE 2025.

The motor, algorithm, and material technology involved in robot manufacturing are actually the fields that Midea has been focusing on in recent years. The layout of new entrants in the robotics industry can be seen as a competition with Midea for the "pearl" in the industrial manufacturing field.

For example, Midea has Welling Motors, while Ecovacs has Kaihang Motors. Midea has KUKA Robotics, and Dreame has incubated the Magic Atom humanoid robot. Although new entrants do not have as deep an accumulation as Midea, the wave of embodied intelligence will accelerate the maturity of emerging enterprises and products.

Now, not only does Xiaomi have businesses in refrigerators and washing machines, but Dreame and Roborock have also launched refrigerators or washing machines. Ecovacs has also launched battery, plastic product, and component, and motor businesses under the brands of Taiding, Tongfan, and Kaihang.

What Midea has, new entrants also have.

This article is from the WeChat official account "Big V Business", author: Jia Zhifei. Republished by 36Kr with permission.