Recently, Gree Electric announced the launch of a new strategic brand “Dong Mingzhu Health Home”, and successively launched the renaming of exclusive stores in many places, including the renaming of online live broadcast rooms.
In this regard, the public believes that Dong Mingzhu is trying to shape her own IP, and in the future, she can make money like Meng Yutong, relying on her identity as a Gree brand.
On February 24, Zhu Lei, the marketing director of Gree Electric, said at a media symposium, “President Dong has a lot of traffic, and we all know that traffic means wealth, but President Dong herself cannot make money with her own name, because her name belongs to Gree, she has dedicated her life to Gree, and even her name has been registered by the company”.
In my opinion, everyone has really misunderstood Dong Mingzhu. Dong Mingzhu is probably really like what the company claims, without any intention of leaving Gree, but this makes the already bizarre development direction of Dong Mingzhu and Gree in recent years more abstract.
Just to give a few examples, for example, a few years ago, Dong Mingzhu launched the Rose Air Conditioner, priced at around 30,000 yuan. I have put the picture of this air conditioner here, and everyone can evaluate it themselves.
What kind of design style is on the market now, everyone knows in their hearts, but Dong Mingzhu thinks that this air conditioner style is very good and suitable for newlyweds to use, and they can use it until their golden wedding and silver wedding. Dong Mingzhu said: “Many people complain that ‘Dong Mingzhu is so earthy’, then I am earthy, I don’t care. We must constantly innovate and make air conditioners into works of art in the home, this is my goal.”
Gree Mingzhu Selected has also released a video saying, “President Dong said that she wants to use roses to express love to users and make this air conditioner a collectible work of art. For this pursuit, we are constantly working hard”.
Gree has a large number of experts, and they can definitely calculate accurately, they know air conditioners better than me, and they know air conditioners better than everyone else. They have been deeply involved in the white goods market for many years, and they cannot not know that such products completely do not conform to the contemporary market aesthetic orientation, and the pricing strategy is also mysterious, almost treating the masses as ghosts. The only possibility is that Dong Mingzhu is very optimistic about this project, and no one dares to defy Dong Mingzhu’s authority. The final result is that everyone has to hand in their homework with a hard head and is rejected by the market with money voting.
It is a pity that the marketing department and the public relations department do not know how much hair they have lost to wipe the ass of a small whim of the leader.
In order to save face for the leader’s guest appearance as an air conditioner designer, a project was forcibly promoted, and in the end, it was only a waste of some mold opening fees for the outer shell. Compared with Gree’s family background, this is completely affordable. But Gree’s strategic mistakes are far more than just one air conditioner.
With the gradual increase of China’s modernization process and urbanization rate, a large number of rural people entering the city has become a thing of the past, the demand for new houses has decreased, and at the same time, the white goods industry, as a strong positive correlation with the real estate industry, is also inevitably impacted, so many companies have chosen a diversified business strategy, including Gree.
Starting in 2015, Dong Mingzhu suddenly announced that Gree began to make mobile phones. In June 2017, Gree launched the latest generation of Gree mobile phones, named “Color World”, which was officially launched on the Gree Mall, priced at 3,200 yuan.
This mobile phone is still using Snapdragon 820, which is almost outdated at birth. In April 2017, two months before the release of Dong Mingzhu’s new mobile phone, Xiaomi released Xiaomi 6, equipped with Snapdragon 835, 64GB version, with a starting price of 2,499 yuan. 6GB+128GB version 2899 yuan, and there are still nail households until today. Dong Mingzhu’s mobile phone, whether from the brand or from the hard power of the product itself and the price, has no competitiveness.
Dong Mingzhu is very confident in her products: “Gree mobile phones are of good quality, but they are a bit expensive, you don’t know the goods, whoever uses it says it’s good.” “Making mobile phones is very easy” “Surpassing Xiaomi in minutes”
It is worth mentioning that, according to the report of Southern Metropolis Daily, Gree Electric had previously revealed that in 2020 and 2021, Gree mobile phones were used to offset the year-end bonuses of employees at a discount. And in the past, Gree Electric’s dealers also told reporters that they needed to purchase a certain share of Gree mobile phones when purchasing hot-selling air conditioners from Gree Electric, which had a bit of a strong-selling meaning.
In May 2023, Interface News learned from multiple independent sources that Gree Electric had disbanded the core team of mobile phones. At present, the Gree mobile phone official website cannot be opened, and its official WeChat account “Gree Mobile Phone” has stopped updating after April 16, 2020.
Until today, even if Gree mobile phones are dead, the boot screen of Gree mobile phones is Dong Mingzhu, which is still the stereotype that netizens talk about Gree mobile phones.
You know, unlike Lei Jun’s image, Dong Mingzhu’s image is now probably a complete negative asset within the younger generation. Why would Gree Electric, such a huge listed company, choose to be strongly bound to Dong Mingzhu personally?
How does a modern listed company with a modern normal operating system grow such a strong personal worship and authoritarian rule from within?
We still start from the equity structure of Gree Electric. The control rights of modern enterprises are divided into three levels: shares, directors and management. Shareholders have nominal ultimate control, but everything is decided by the shareholders’ meeting, which is obviously unlikely, so the board of directors is the highest authority, while the management is the extension of the board of directors that controls daily operations.
You can understand it as the people holding the supreme power, the National People’s Congress exercising power collectively, and the government being the subordinate executive body. Theoretically, the supreme power comes from the people, and there is a check and balance relationship between the latter two.
But how did Dong Mingzhu, who only holds less than 2% of the shares of Gree Electric, become the emperor in a modern enterprise?
Gree Electric and Gree Group have a deep relationship. When it was listed on the Shenzhen Stock Exchange in 1996, Gree Group held 60% of the shares of Gree Electric. Zhuhai Gree Real Estate Co., Ltd., as a concerted action person of Gree Group, held 10% of the shares. Zhuhai Municipal State-owned Assets Supervision and Administration Commission indirectly controlled 70% of the shares of Gree Electric through state-owned companies, which is the absolute controlling shareholder of Gree Electric.
In the following decades, the two companies transferred shares through mortgage and transfer, and the proportion of shares held continued to decrease. However, according to the external announcement, Gree Group is still the relative controlling shareholder of Gree Electric. Zhuhai Municipal State-owned Assets Supervision and Administration Commission still has considerable control over Gree Electric.
In 2019, Gree Group signed an agreement with Zhuhai Mingjun to transfer 15% of the shares of Gree Electric. Since then, Zhuhai Mingjun has become the largest shareholder of Gree Electric. However, after decades of share transactions, Gree Electric has become a white horse stock held by a large number of institutions. After the transaction is completed, Gree Electric now has no actual controlling shareholder and actual controller.
At present, the current board of directors of Gree Electric is the 11th session, with a total of 9 members, including three independent directors and three executive directors. Among them, the three executive directors are Dong Mingzhu and her two assistants. Among the non-executive directors, two are Jinghai Guarantee established by Gree Electric’s distribution company, which is also closely related to Dong Mingzhu’s sales network. Dong Mingzhu can directly influence 4 directors, plus herself, 5 people, exceeding half of the board of directors.
That is to say, in the highest authority of Gree Electric, Dong Mingzhu’s influence has exceeded half, the role of other independent directors cannot be said to be negligible, it can only be said that it is basically non-existent. Even in 2016, Zhuhai Municipal State-owned Assets Supervision and Administration Commission, as the largest shareholder of the listed company Gree Electric, did not even have a director seat on the board of directors. In this way, Gree Electric has formed an ultra-stable structure with Dong Mingzhu as the core of power, and Dong Mingzhu can arbitrarily implement the policies she wants.
Objectively speaking, Dong Mingzhu has played a positive role in the development history of Gree Group and Gree Electric, but from the development of Gree Group in the past 10 years, the role played by Dong Mingzhu has become more and more negative.
As mentioned earlier, the largest shareholder of Gree Electric was Gree Group, which was backed by the Zhuhai Municipal State-owned Assets Supervision and Administration Commission, which held 100% of the shares. It should be said that Gree Electric has a strong state-owned asset color since its inception. And Dong Mingzhu, in addition to managing Gree Electric, was also the head of this huge group.
The rift between the two sides came in 2016, when Dong Mingzhu announced that she would enter the new energy vehicle industry. In August 2016, Dong Mingzhu announced that she would issue shares to acquire Zhuhai Yinlong for 13 billion yuan, and was preparing to start the new energy business. However, as soon as the plan was released, there were constant doubts, and investors accused Zhuhai Yinlong of overvaluation and Gree Electric’s low additional issuance price.
Soon, on October 18, Dong Mingzhu resigned from the positions of chairman, director and legal representative of Zhuhai Gree Group Co., Ltd. She no longer served as the chairman, director and legal representative of Zhuhai Gree Group Co., Ltd., and will only serve as the chairman and president and legal representative of Gree Electric in the future.
At the end of October, at the extraordinary shareholders’ meeting of Gree Electric, the small and medium-sized shareholders rejected the overall plan to acquire Yinlong and raise funds.
It can be imagined how much pressure Zhuhai Municipal State-owned Assets Supervision and Administration Commission exerted on this series of operations to cut off Dong Mingzhu. This can also be regarded as the official attitude of Zhuhai.
Three years later, Zhuhai State-owned Assets Supervision and Administration Commission publicly reduced its holdings of 15% of Gree Electric’s shares, close to clearing its position. From the subsequent development, it can be seen that the decision of Zhuhai State-owned Assets Supervision and Administration Commission to remove Dong Mingzhu and sell Gree Electric’s shares was wise. Although the new energy industry has developed greatly in the past 10 years, whether Gree Electric and Gree Group under the leadership of Dong Mingzhu have the ability to implement the new energy strategy well, judging from the experience of other business directions, it is indeed necessary to put a question mark.
When Gree Group cleared its position in Gree Electric, the stock price was about 45 yuan per share, while now Gree Electric is only 40 yuan per share. Dong Mingzhu’s ability as an entrepreneur is no longer suitable for managing such an important state-owned enterprise as Gree Group, and even the strategy of Gree Electric is difficult to guarantee to be correct.
Around 2013, Gree Electric and Midea Group, the two companies, were still at the same level in terms of revenue in the domestic white goods market, both at the level of more than 100 billion yuan. However, by 2024, Midea Group not only surpassed Gree Electric’s revenue by a factor of two, but also maintained a double-digit growth rate per year, and even surpassed Gree in the revenue of air conditioners, Gree Electric’s main business.
Gree Electric is still a traditional home appliance company mainly engaged in air conditioner business, and the air conditioner business accounts for as high as 68%. Gree has not tried to transform and diversify, new energy vehicles, lithium batteries, mobile phones, energy storage, semiconductors, medical health and even pre-made dishes, Gree has actively tried, but it is obvious that due to the ability of the decision-making level with Dong Mingzhu as the core, Gree Electric has been completely left behind by the times. Gree Electric is also a stock heavily held by institutions. Under the dispersion of various powers, these institutions are only the nominal owners of Gree Electric, and in fact, they cannot elect another leader who can take the helm and confront Dong Mingzhu, either clearing their positions and exiting, or they can only let Dong Mingzhu continue to take the helm.
As for the successors of Dong Mingzhu, who are talked about by the public, from Meng Yutong to Wang Ziruo, they have left one after another. I am afraid that everyone who is regarded as a successor by the outside world knows that what Dong Mingzhu needs most is not a successor.
In such a company, the more you maintain personal loyalty to Dong Mingzhu, the more you threaten the entire Gree Electric.
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