Gree's sales reform continued.

　　On the evening of September 19, the third stop of Gree Electric's national tour live broadcast was held in Guilin, with sales of 1.18 billion yuan. Since the beginning of this year, eight live broadcasts have accumulated sales of 34.18 billion yuan.

Gree Electric’s chairman and president Dong Mingzhu revealed during the live broadcast that in the future, Gree’s Dong Mingzhu microstore will be combined with Gree’s 30,000 offline stores for offline experience, online orders, and national unified prices, distribution and after-sales services.

　　Dong Mingzhu said that the combination of offline stores and online allows users to become life-long customers. Once you visit the store, you may not go to the store for the next purchase. You can place an order even at two or three o'clock at night, giving consumers more convenience. This is Gree's new retail.

　　If it develops in this way, how can Gree stores make money in the future? Does the distributor agree?

A reporter from China Business News learned from Gree's channel dealers that the reform of Gree's channel flattening is advancing, and it seems that it will not happen overnight.

"Cleaning up" agents and "destocking"

　　In the live broadcast on the evening of the 19th, Gree’s post-90s "cargo officer" simulated the scene of a specialty store, allowing customers to experience Gree’s diversified new products while scanning the code to enter the WeChat mini program Gree Dong Mingzhu store or Taobao Gree Dong Mingzhu shop.

"Place the order now, and the goods will be delivered tomorrow", Dong Mingzhu "Amway" from time to time to "Amway" own logistics.

　　Gree Electric Headquarters-local sales branches-agents-specialty stores are Gree's sales channel model for many years.

Now, it's time for change.

Gree Dong Mingzhu store directly faces consumers and retailers as the general agent of the factory.

　　An industry veteran told a reporter from China Business News that in early September, Gree Guangzhou and Foshan sales branches jointly held a "cheer-up meeting" for channel vendors for the first time in southern China, saying that Gree would maintain a stable price system.

Unlike previous years, in the new year of freezing starting in August this year, agents no longer have preferential policies, and the sales policies they enjoy are "reduced" to be consistent with direct sales.

　　The merger of the management teams of Gree's Guangzhou and Foshan sales branches and the "downgrade" of agent policies are one of Gree's performance in reducing the level of sales channels and streamlining the "middle layer".

In East China, a Gree agent told a reporter from China Business News that due to the large business in Shanghai, the role of an agent is still reserved for the time being. However, in the new year, its "payment" will be reduced by 40% year-on-year due to direct sales at Gree Dong Mingzhu store.

　　Gree’s main competitor, Midea, is the first to carry out channel reforms and implement the “one inventory” approach from factories directly to retail terminals and national logistics, reducing intermediate circulation links, freeing up more profit margins, and “changing price for volume” at retail terminals In the first half of the year, it achieved a counterattack, and air-conditioning revenue exceeded Gree for the first time.

Therefore, Gree must also speed up reforms, meet challenges and consolidate its position.

　　The aforementioned Gree agent also revealed that, unlike previous years, Gree distributors in the new freezing year need to continue to "make money", but there is no need to "press goods". The goods are picked up according to their own sales time rhythm and can be placed in their own warehouse or Gree Warehouse.

Therefore, the inventory is cleared very quickly, and Gree Air Conditioning has achieved "destocking".

　　However, the "national unified price, distribution and after-sales" has not yet been fully implemented in every detail, and it will take time and process to realize it.

At present, the "special offer" is the first.

According to the above-mentioned industry veterans, Gree will allocate certain special price machines according to the sales completed by each store last month, for example, less than 2,000 yuan 1 HP, 1.5 HP three-level energy efficiency (old standard) inverter air conditioner on-hook.

　　These special machines will not be placed in specialty stores, but will be viewed in the information system.

If the customer needs, the store clerk will guide the customer to place an order at Gree Dong Mingzhu store, and Gree will deliver it directly to the customer.

Sales companies in various places will then give certain rebates to specialty stores.

In the sales process of this part of the special machine, there are no agents, and the sales companies in various regions have no sales function, which realizes the direct sales of the factory to the user.

Listed companies will regain control of brand premium distribution rights

　　"Off-season payment, year-end rebate" used to be Gree's "trick" to bind channel vendors to form a community of interests.

Channel vendors pay Gree in the off-season of the new freezing year. Gree uses these funds to purchase raw materials and organize production. Air conditioners are "pressed" to channel vendors in advance to meet the demand for explosive sales in peak seasons. After channel vendors complete certain sales tasks , Gree will give rebates based on a certain percentage of the payment.

　　Gree Electric's sales revenue in 2019 reached 200 billion yuan, and its huge sales system is one of its important supports for achieving 200 billion yuan in revenue.

However, the original sales system also has risks of multiple levels, large price increases, and high inventory.

In particular, this year's epidemic has impacted sales of air conditioners and offline channels. Dong Mingzhu, who has always supported offline channels, has made an iron fist for reforms. He has held eight online live broadcast activities in succession.

　　The live broadcast has stimulated the sales of Gree air-conditioning online, and the income of Gree Online has significantly narrowed the gap with Midea.

However, direct sales, especially low-price promotions, also disrupted Gree’s original price system to a certain extent, thinned the flow of Gree’s offline specialty stores, and hurt the confidence of some retailers and agents.

However, as the epidemic is gradually brought under control and the market is gradually recovering, the situation is also turning around.

　　According to the data provided by Industry Online to China Business News, in July 2020, both domestic and foreign sales of household air conditioners increased, of which domestic shipments were 9.647 million units, a year-on-year increase of 11.2%, and exports were 4.75 million units, a year-on-year increase of 24.5%.

The performance of domestic sales terminals exceeded expectations, and leading companies are confident.

In addition, July is the traditional peak season for production, and both production and sales are booming.

In addition, July is the closing month of the old year of freezing, and some companies hit the task of freezing the year.

At present, the main sales are still the old energy-efficiency standard products, and the special price machines are the main products, and short-term enterprises are under pressure to make profits.

　　According to a research report by AVC, although the domestic economy has rebounded, the market environment in the cold year of 2021 is still not optimistic. The domestic air-conditioning market has increased year by year. How to promote the replacement of old needs to be considered.

It is estimated that the domestic air-conditioning market retail volume in the cold year of 2021 will be 62.22 million units, an increase of 16.3% over the cold year of 2020, retail sales will increase by 24.6%, and average prices will increase by 7.1%.

　　A reporter from China Business News learned from some Gree channel companies that Gree Electric’s market performance in the third quarter improved with a 29% drop in revenue and a 50% drop in net profit in the first half of the year.

Although Dong Mingzhu brought the goods live, the second quarter slowed the pace of channel business purchases.

However, with the basic digestion of inventories and the gradual recovery of the market, channel dealers re-sold money in the new year.

A Gree retailer revealed that he paid more in the new year of freezing than the previous year because agents no longer have special offers, which brought him new opportunities.

　　The game of "rebates" continues, but if the price is uniform across the country and users place orders online, how can Gree stores make money?

Midea’s approach is that whether users place an order online or offline, channel providers provide distribution and installation services by region and make money from it.

Gree's current information system and business processes need to be further streamlined to achieve Dong Mingzhu's goal of new retail reform.

　　CICC's research report on September 18 predicts that Gree’s deeply tied interest structure with distributors is disintegrating; a flat structure with “Gree Dong Mingzhu Store” (B2C+B2B) as the channel center, ex-factory prices and retail prices Consistently, the channel is profitable by earning commissions and rebates; after the channel is flattened, consumers will enjoy more cost-effective products, and listed companies will control the distribution of brand premiums.