Xiaomi has reached Gree's "doorstep".
Author | Xie Yunzi
Editor | Zhang Fan
As a landmark event in China's economy, the "billion-yuan bet" is deeply impressive.
At the 14th CCTV China Annual Figures Awards Ceremony in December 2013, Lei Jun, the chairman of Xiaomi, proposed that Xiaomi's revenue would exceed that of Gree within five years. Dong Mingzhu, the chairwoman of Gree Electric Appliances, immediately raised the bet to 1 billion yuan.
In 2018, based on the foundation of traditional manufacturing, the advantages of channels, and the strong performance in the main air - conditioning business, Gree Electric Appliances won with a revenue of 198.12 billion yuan. However, this century - long bet of "new - old replacement" is not over yet.
Not long ago, Gree Electric Appliances released its third - quarter financial report.
In the first three quarters, the company's revenue was 137.654 billion yuan, a year - on - year decrease of 6.62%; the net profit was 21.461 billion yuan, a decrease of 2.27%. It became the only company among the "big three" to experience a decline in performance.
It is worth mentioning that Xiaomi, the "old rival", is entering the air - conditioning field. Data disclosed by third - parties also show that in the air - conditioning market in June this year, Xiaomi's online sales ranking "briefly" exceeded that of Gree. This situation of one decline and one rise also gives the outside world an "illusion" - in the air - conditioning field, Xiaomi seems to have reached Gree's doorstep.
The picture is taken from Gree Electric Appliances' financial report
The main business is under pressure, and diversification has not shown significant results
Looking at the performance of the third - quarter financial report alone, the revenue pressure of Gree Electric Appliances is more concentrated.
In the third quarter, Gree Electric Appliances' revenue was 9.855 billion yuan, and the year - on - year decline widened to 15.09%; the net profit attributable to the parent company was 7.049 billion yuan, a year - on - year decline of 9.92%. The single - quarter decline in both revenue and profit exceeded the overall level of the first three quarters.
Behind the stall in performance is the long - standing problem of Gree Electric Appliances' single - business structure that has not been solved.
As a national - level home appliance brand, Gree Electric Appliances has a very high degree of dependence on the air - conditioning business. Not long ago, when responding to investors' questions, the company's management also said that in the first half of 2025, the consumer appliance segment with air - conditioning as the core business accounted for 78.38% of the current income, and the operating income reached 76.279 billion yuan.
In contrast, both Midea and Haier Smart Home have achieved good performance growth rates through diversification or globalization.
36Kr made a table based on financial report data
Changes in the gross profit margins of Midea, Haier, and Gree in recent years; data from Wind
In the first three quarters, the revenue of Midea Group's To B business increased by 18% year - on - year, higher than the 13% growth rate of the To C business. In the To B business, the revenues of new energy and industrial technology, intelligent building technology, and robotics and automation were 30.6 billion yuan, 28.1 billion yuan, and 22.6 billion yuan respectively, with year - on - year increases of 21%, 25%, and 9% respectively.
On the other hand, Haier's overseas revenue increased by 10.5% during the same period. Among them, the growth in South Asia exceeded 25%, the growth in Southeast Asia exceeded 15%, and the Middle East and Africa market achieved a strong growth of over 60%.
In fact, Gree has made a lot of investments in diversification. Previously, Gree's persistence in mobile phones and new - energy vehicles was the most high - profile, but from the market feedback, there have not been significant results so far.
It is worth mentioning that in the two fields of chips and high - end machine tools, Gree is constantly opening up the market, but due to the heavy upfront investment, the two businesses have not yet provided significant support for sustainable performance and revenue.
In addition, in terms of the main business, Gree Electric Appliances is also weakening year - on - year.
In terms of gross profit margin, Gree Electric Appliances' gross profit margin in the first three quarters was 28.44%, a decrease compared with 2024, and it has shown a downward trend in the past two years.
Financial report data also show that in the second and third quarters, the external sales volume of Gree's air - conditioning products decreased by 4% and 15% respectively. In contrast, the domestic shipment volume increased to a certain extent, with increases of 7% and 3% in the second and third quarters respectively. This may be affected by Gree Electric Appliances' channel reform.
The main business is under pressure, and channel transformation continues
As the "national subsidy" is coming to an end, the home appliance industry is still trapped in the environment of inventory cycles, a sluggish real estate market, and weak consumption.
The picture is from Galaxy Securities
Facing the growth dilemma, Gree Electric Appliances is seeking breakthroughs on multiple fronts. In recent years, channel reform has always been an unavoidable topic.
There was a time when tying interests with core agents or dealers was Gree Electric Appliances' trump card in controlling channels.
For a long time, Gree Electric Appliances also adopted the model of dealers' inventory pressure. Under this marketing model, Gree Electric Appliances only needed to consider distributing products to provincial dealers, who would then distribute them to city - and county - level dealers. Gree Electric Appliances stimulated the dealers' sales enthusiasm through the rebate policy, while effectively controlling the bargaining power and significantly reducing marketing and inventory costs.
Today, although offline channels are still the foundation of home appliance sales, the rise of e - commerce platforms and live - streaming with goods is still constantly creating conditions for the online sales of home appliances.
Since 2019, Gree Electric Appliances has focused on the online channel "Gree Dong Mingzhu Store", promoting retailers to place orders through the WeChat mini - program of Gree Dong Mingzhu Store. Since 2025, Gree has launched the new offline store "Dong Mingzhu Health Home", and then quickly deployed nearly a thousand stores across the country. The impact on traditional dealers is self - evident.
According to reports from multiple media, in August this year, Gree Electric Appliances' online wholesale systems in many places across the country have been transferred from the "Shengshi" series of companies to the newly established "Hengxin" series of companies. It is understood that the investors behind the Shengshi series of companies are Gree's core agents, while the members of the Hengxin series of companies are mainly professional managers related to Gree.
As the "Hengxin" series of companies expands Gree's online wholesale system across the country, the traditional dealer system that once pushed Gree to the top of the industry will become history, replaced by a more flattened and integrated online - offline new retail model. Gree Electric Appliances will gradually take back the profits from all links of the sales channels to the listed company.
A research report from CICC believes that channel reform is an inevitable path. Weakening agency, strengthening retail, and integrating online and offline are the general trends. Although it may affect revenue in the short term, it is beneficial to the reconstruction of the channel system in the long term.
At the investor communication meeting in the first half of this year, Zhu Lei, the marketing director of Gree Electric Appliances, said that the company is vigorously promoting channel reform, achieving the flattening and digitization of sales channels, streamlining the traditional multi - level channels to 1 - 2 levels, shortening the channel chain, and improving market response efficiency and channel control.
In the third quarter of 2025, Gree Electric Appliances' inventory remained at a low level, with an inventory book value of 25.3 billion yuan. This may mean that Gree Electric Appliances' new channel model has basically been successful. But for Gree Electric Appliances at this time, it needs to face the fact that the air - conditioning market is becoming more segmented.
Xiaomi enters the market, and Gree launches low - price products
Under the consumption segmentation, on one hand, consumers are beginning to pursue higher - quality whole - house intelligent customized products (AIoT), and on the other hand, consumers are becoming more sensitive to prices.
However, whether in the AIoT field or in the mid - low - end product level, Gree does not occupy a dominant position.
In October this year, Gree Electric Appliances' sub - brand "Jinghong" was officially launched on the e - commerce platform. Its product "Jinghong Xiaoliangshen Air - Conditioner" entered the mid - low - end market with an affordable price of 1,899 yuan and 1,999 yuan. While Gree Electric Appliances is moving towards cost - effectiveness, Xiaomi has also entered the air - conditioning market high - profile.
An episode is that an interview with Dong Mingzhu at the end of last year pushed the "new competition" between her and Xiaomi to the forefront of public opinion.
In December 2024, Dong Mingzhu said in an interview that "Xiaomi paid 500,000 yuan to Gree for patent infringement." Immediately afterwards, Wang Hua, the spokesman and the general manager of the public relations department of Xiaomi, denied this statement.
In October this year, Xiaomi's Wuhan Smart Home Appliance Factory was officially put into operation. According to public reports, this factory produces a high - end air - conditioner every 6.5 seconds on average, with 100% accurate detection of key components. The goal is to become the leader in the air - conditioning industry within five years.
The general view in the industry is that Xiaomi hopes to reshape the discourse power in the home appliance field through the strategy of "online channels, AIoT technology, and high cost - effectiveness". Earlier, Xiaomi successfully entered the smart TV field through the model of "popular products for high volume - cost dilution - gross profit improvement". Compared with smart TVs, basically each household needs more than one air - conditioner. In terms of market scale, the air - conditioning market seems more promising.
Data officially disclosed by Xiaomi also show that in the second quarter of 2025, Xiaomi's smart home device business grew significantly, with a gross profit margin of 22.5%. Among them, the shipment volume of Xiaomi's air - conditioners exceeded 5.4 million units, a record high, a year - on - year increase of more than 60%.
In a research report from Galaxy Securities, in June this year, the online retail share of Xiaomi and Gree in the air - conditioning market intersected for the first time, but the gap widened quickly later, and Gree still maintained the lead.
The picture is from Galaxy Securities
According to data from Aowei Cloud Network in July, in terms of the sales volume of China's air - conditioning market across all channels, Midea ranked first with a market share of 29%, Gree ranked second with 17%, and Haier ranked third with 15%.
For a long time, the slogan "Good air - conditioners are made by Gree" has always lingered in consumers' minds. On more occasions, Dong Mingzhu also emphasized: "I dare to say that Gree's air - conditioners are the best in the world, supported by our huge patent library, which has accumulated more than 100,000 items."
During the reporting period, Gree Electric Appliances has also increased its R & D investment. In the cumulative first three quarters, its R & D expenses increased from 5.4 billion yuan in the same period last year to 5.62 billion yuan, a year - on - year increase of 5.0%.
However, in the economic cycle, Gree needs to better transform R & D results into products that consumers are willing to pay for. This not only requires the reconstruction of new channels but also a deeper understanding and insight into different levels of consumer markets.
Despite the decline in revenue and net profit, Gree Electric Appliances has always maintained a high dividend return.
The interim profit distribution plan shows that it plans to distribute a cash dividend of 10 yuan for every 10 shares, with a total dividend of 5.585 billion yuan, accounting for 26% of the net profit in the first three quarters, which is comparable to the interim dividend in 2024. Since its listing, Gree Electric Appliances has accumulated a dividend of more than 177.6 billion yuan. But to reassure investors, stable performance growth is still the key.
As of before the publication of this article, Gree Electric Appliances was quoted at 41.15 yuan per share, with a total market value of 230.498 billion yuan.
*Disclaimer:
The content of this article only represents the author's views.
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