Agree or disagree, Gree is China’s No.1 Air-con brand from all degrees. The chairwoman Dong Mingzhu is believe to be the strength behind the longstanding home appliance giant.
As china’s ‘home appliances queen’, Dong was re-elected chairwoman of Gree Electric Appliances earlier in January, promising a minimum 10 per cent YoY sales growth over the next five years.
Controversies Behind the 10% Promise
Apart from its ace air-con products, Gree also makes electric fans, water dispensers, heaters, rice cookers, air purifiers, water kettles, humidifiers and induction cookers, among others.
Dong’s 10% annual sales growth projection is rather bold and aggressive not least because of the slowing Chinese economy and lingering worries about the US-China trade war’s impact on consumers’ pockets.
But the straight-talking Dong has long been a media darling as she does not hold back much. In 2014, she labeled smart-phone maker Xiaomi and rival appliance maker Midea ‘thieves’ after a court case in which Midea was found guilty of using Gree’s patents for its own air conditioners.
Dong started off as an administrative assistant at a government research institute in Nanjing, Jiangsu province, before coming to Guangdong in 1990 to look for new career development opportunities.
She became manager of Gree’s sales department in 1996 and was promoted to deputy general manager’s position the following year. In 2001, Dong was named president.
Dong’s leadership skills have won her several awards. In 2015, Fortune magazine ranked her as the 4th most powerful woman in Asia-Pacific. But her insistence on continuing as chairwoman of Gree has become a talking point among the country’s business and investment communities.
Dong, 64, who has not taken a single day’s leave in nearly 30 years, that by staying at the helm of the country’s largest air-conditioner maker it would ensure the continuity of Gree’s long-term development and that she would step down when the time comes.
In China, the retirement age is set at 60, but those above that age can continue to work if they are kept on by their employers. “There is no compulsory retirement age for executives at listed companies,” Dong said at the meeting. “You can work as long as you want to continue to work.”
Terminate the “Low price competition” for China
“The key question is whether the product is good or not — if a company fails because of a trade war, it probably means the company is not strong enough,” said Dong during the National People’s Congress.
“We could take the easy route to make the (overseas) markets much bigger by lowering our prices, but I’m not choosing it. The days of low price competition are over for China.”
She also said she was confident about Gree’s future despite slowing property sales in China, which is often a lead indicator for home appliance sales.
“Air conditioners don’t sell just because many new homes are built. You have to constantly upgrade your products to improve quality and life for consumers. Then you will have the market,” she added.—–edited from South China Morning Post
Dong Side-kicked Rival Aux
China’s top market regulator is paying some serious attention to air-conditioner manufacturer Gree Electric’s claim that its rival Aux Group was producing and selling defective products, and has informed the provincial level market regulator in Zhejiang to investigate and verify the allegation.
The regulator will make a disposition after probe and verification, and announce the result to the public in time, said the State Administration for Market Regulation.
Gree published a letter on its official Sina Weibo account on Monday afternoon, alleging that Aux’s eight types of equipment’s real energy efficiency was inconsistent with what it claimed on the label, which it said meant that the equipment burnt more energy than claimed.
Four hours later, Aux launched counterattack through its Weibo account, saying that Gree’s reporting was unreasonable and purposely launched ahead of the upcoming “618 shopping festival” as well as the peak season for air-conditioner sales. (The shopping festival, which runs for 18 days from June 1 every year, was created by e-commerce giant JD.com to celebrate its anniversary.)
Aux citing All View Cloud, a consultancy firm, said its air-conditioner sales rose 56 percent YoY in the first quarter of this year, while Gree’s sales fell 11.6% YoY.
Aux has reported the case to the public security and filed a lawsuit, the firm said. However, Gree made a second announcement, saying it has prepared enough evidence for regulator to verify and will release the information depending on the situation.
Moreover, Gree announced eight inspection reports by Sichuan Institute of Electron Production Supervision & Inspection, and the report showed the samples were substandard. The eight samples were of Aux products made in Ningbo, Zhejiang.
Aux published its chairman Zheng Jianjiang’s statement saying that it welcomed the supervision, and will co-build national brand reputation on quality.
Last year, Aux was ordered to pay 46 million yuan to Gree for violating intellectual property rights, according to Economic View. The business portal also citing reports said Aux took improper ways to poach more than 300 members of Gree’s R&D and quality inspection departments from 2010 to June, 2017.
Gree’s chairwoman Dong Mingzhu was a vocal critic of Aux alleged stealing of Gree’s technologies and cheating, said the Economic View.—–edited from ChinaDaily
To be specific in Gree’s allegation, home air conditioners in China must have a minimum energy efficiency ratio of 3.2. The energy efficiency ratio is a measure of an air conditioner’s cooling capacity compared with its electricity usage. The higher the ratio, the more efficient the device.
Gree said one of the eight Aux models, which is labeled as having an energy efficiency ratio of 3.59, was found to have a ratio of only 2.68.
Gree said that the production and sale of these products “severely infringed consumers’ legal rights and interests” and it had reported Aux to the State Administration for Market Regulation.
The post, which had been shared over 10,000 times on Weibo at the time of publication, was released a week ahead of the June 18 online retail festival known as “618,” which is similar to Black Friday in the U.S. On that day, prices on most of China’s major e-commerce platforms are slashed and sales revenue spikes.
The State Administration for Market Regulation said that it has ordered local market regulators investigate into Aux’s products.—–edited from caixinglobal
Although we cannot clearly see the big picture Queen Dong is drawing behind the attack on rival Aux, the bold move could send a positive signal for Chinese home appliance manufacturers to play by rules. The moment Gree blew the whistle, Dong placed her Gree under the same compliance radar.
Edited by Joreal Qian