Behind Dong Mingzhu'S Live Broadcast: GREE Channel Transformation Is Imminent

On the evening of May 10th, Dong Mingzhu, chairman and chief executive of GREE Electric Appliance Co., Ltd., continued to work hard and appeared on the fast track platform to broadcast live products for GREE products.

Finally, the whole live broadcast attracted 16 million fast users to watch. The highest number of online users reached 1 million at the same time, opening 30 minutes, 3 products sales 100 million, 3 hours 310 million.

"Live broadcasting is a new form, in which ideological communication and service are most important." For the live broadcast, Dong Mingzhu admitted that his original intention was to explore the way for dealers, hoping to combine them online and offline.

This statement is not empty. This year, GREE headquarters has repeatedly mobilized its subsidiaries and distributors to develop online sales, try new channels such as live broadcasting and micro business, but the resistance is not small. Dealers have great objections.

In the past, the days of collecting money were long gone, and all kinds of market activities were hard to sell. GREE's huge dealer team became a burden of transformation. Plus, GREE has so far failed to produce second industries that can compete with air conditioners.

According to the latest data, GREE electric appliances achieved a total revenue of 200 billion 508 million yuan in 2019, an increase of 0.24% over the same period last year, and realized a net profit of 24 billion 697 million yuan, down 5.75% from the same period last year. From the horizontal comparison of revenue, GREE is the lowest among the three white giants, which is 78 billion 800 million less than that of the United States, and lost to Haier at the margin of 250 million yuan.

Transformation is imminent.

Affected by the epidemic this year, the air conditioning market in the first quarter was nearly cut. According to AVC, the total retail sales volume shows that in the first quarter of 2020, the retail sales volume of the domestic air conditioner market was 4 million 770 thousand units, down 51.3% from the same period last year, and the retail sales volume was 13 billion 800 million yuan, down 61.4% from the same period last year.

Air conditioning business accounts for nearly 70% of GREE's income. It is expected that in the first quarter, GREE's revenue and net profit fell by 49.7% and 72.53%, respectively, to about 20 billion 400 million yuan and 1 billion 550 million yuan.

Dong Mingzhu interviewed the media recently, saying that the biggest feeling for the epidemic was 5 pounds. She admits that GREE's sales in the first quarter were 30 billion less than in the first quarter.

No sales, no income, no income, no profit. But the wages of 90 thousand employees continue to open, three months of wages are 20 billion. This is unprecedented and a tremendous pressure for us. " Dong Mingzhu said.

Industry sales have declined sharply, live selling has become a powerful tool for rescuing the market, and the main brand has launched a promotional war. Net red belt goods, president sales, live kill, WeChat group marketing activities.

On the evening of April 24th, Dong Mingzhu made the first live broadcast of the trembling sound, showing the exhibition hall of GREE electric Zhuhai headquarters and interacting with netizens by video. However, because of the speed of the Internet, the whole live broadcast has been stuck, and netizens have been tucking up their slots. On the second day, GREE appliances issued a clarification announcement because Dong Mingzhu was misread during a live broadcast.

Just two weeks later, Dong Mingzhu appeared again in the studio. Drawing lessons from the last lesson, Dong Mingzhu's live broadcast is not only smooth, but also smoothly achieved by "30 minutes sales breaking 100 million, 100 minutes breaking 200 million, and 3 hours trading 310 million". Compared with 230 thousand sales of the first sound, Dong Mingzhu's live broadcast can be described as "a shame before snow."

In response, Liu Buchen, a home appliance analyst, said that compared with the first live broadcast, the second live performances were much better, which had much to do with product price concessions and platform subsidies.

It is understood that in Dong Mingzhu's quick live broadcast with the first show of goods, a single product broke 100 million of the 1.5 products are Yuet single cold fixed frequency air conditioning, sales 50 thousand +, quick subsidy price 1799 yuan. The price of the same product on Jingdong platform is 2199 yuan.

"In the future, GREE's live broadcast may be normalized. Because we communicate with people through a new way. But Dong Mingzhu also said that GREE can not simply go online, because the latter means that tens of thousands or even millions of people in GREE's tens of thousands of lines will face unemployment.

For the future of line shop, Dong Mingzhu's idea is, "I hope every shop has wired service. Customers come into our online shop to talk about what new needs he has, such as what is demanded in the middle of the night. We are through online services. I want to turn it into such an experiential shop.

Reform is difficult and long.

In fact, with the rise of online shopping, not to mention physical stores, more and more young consumer groups even rarely use platform electricity providers. Instead, they prefer to shop directly under new media channels such as jitter, fast hand, little red book and WeChat. This has brought great impact on traditional channels.

This trend has been further enlarged because of the sudden outbreak this year, not only by Dong Mingzhu, but also by Hisense Group Chairman Zhou Houjian and Gome retail President Wang Junzhou.

According to the latest China household appliances market report released in the first quarter of 2020, China's Electronic Information Industry Development Research Institute showed that online retail accounted for 55.8% of the total retail sales of household appliances in the first quarter, the first time it exceeded 50%. Specifically to the air conditioning market, Orville cloud network data show that from 2017 to 2019, the proportion of retail sales on air conditioning lines accounted for 26.46%, 30.45% and 36.04% respectively. The proportion of online sales continued to rise, and this figure increased to 44.20% in the first quarter of this year.

Last November, GREE set up GREE Agel Ecommerce Ltd for 100 million yuan, and Dong Mingzhu herself was the legal representative. This is widely interpreted by the industry as the "delayed force". We should know that at the same time, the United States and Haier set up an electricity supplier company or a special department at least 5 years ago to vigorously develop the business of e-commerce.

And GREE, which ranks first in the market share, is even inferior to AUX's second tier brand. "Society has already entered the new retail era, and it must be carried out online and offline. It will be impossible to continue relying on traditional physical stores alone." Liu Buchen analysis shows that GREE has two major problems at present: first, the traditional sales mode no longer adapts to market realities, and must be reformed; two, it is delayed to produce second industrial blocks like GREE air conditioners, lacking market regulator.

Dong Mingzhu is very clear about the former. According to her introduction, at present, there are more than 30 thousand dealers under the GREE line. The intention of doing the live broadcast is actually to "open a head" to explore the way for dealers and gradually experience the feeling of online.

Over the years, GREE's sales network has been known by the industry. The sales system made up of group headquarters, branch offices and distributors not only made GREE succeed in the throne of air conditioning boss, dared to challenge the Gome, but also had ties with GREE and became the fate community.

As of April 10, 2020, Hebei Jinghai guarantee investment Co., Ltd., which was composed of GREE dealers, accounted for 8.91% of GREE electric appliances, second only to Hongkong Central Clearing Company Limited and Zhuhai Ming Jun investment partnership limited under high leverage.

How to make these dealers adapt to the consumer demand in the new era is a big challenge before the "Iron Lady".

A GREE branch employee told reporters that dealers are still used to the past store sales mode, and other guests come to their homes. "When competition was less and consumers only recognized GREE brand, they basically sat and waited for the money. Then competition began to start, but in the past two years, the effect of sales promotion was also greatly reduced.

Last year, Dong Mingzhu began to test the water shop, and brought her "Dong Mingzhu store" to all the fields as much as possible. Not only is she herself, but he also encouraged all the staff of GREE to open up shop, taking Dong Mingzhu's shop as IP, hoping to catch up in the new media wave to overtake and miss the share on the line.

GREE electric disclosed in its annual report that last year, Dong Mingzhu's store registered more than 10 outlets, and its annual sales exceeded 1 billion 400 million yuan, an increase of 660% over the same period last year. This year, Dong Mingzhu went further, in addition to putting himself into the live broadcast of goods, he also asked his branch to set up the trill and micro number, forcing dealers to transform.

"Dong Mingzhu has to work hard to reform traditional channels, so we can't wait any longer." But Liu Buchen believes that although GREE has released the signal that the offline dealers need to accelerate the transformation, it is actually not easy to imagine. "To learn to sell goods, the premise is to have traffic, and in fact, what flow is there among dealers."