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Business / Companies

Gree looks to other avenues for growth

By Qu Quanlin (China Daily) Updated: 2016-05-04 07:46

Gree looks to other avenues for growth

Workers at Gree Electric Appliances Inc's industrial park in Wuhan, Hubei province, assemble air conditioners. [Photo/CFP]

Gree Electric Appliances Inc, a major Chinese home appliances maker, will develop more product lines and activities in the years ahead, amid a sharp drop in its core air conditioner operations.

Sales of its air conditioners, the company's staple since launching in 1991, dropped nearly 30 percent year-on-year to 83.7 billion yuan ($12.9 billion) in 2015, according to the company's annual report.

Following the slump, Gree's overall revenue and net profits fell by 29.04 percent to 97.75 billion yuan and 11.46 percent to 12.53 billion yuan, respectively, according to its annual report.

Last year's performance was in sharp contrast to the 2012-14 period, when annual sales grew by nearly 20 billion yuan.

Despite a slowdown in electric home appliances, Gree said it will make more efforts to develop emerging businesses, including new energy, smart home products, industrial-related products, smartphones and intelligent equipment, according to the report.

Dong Mingzhu, Gree's president, said in an earlier interview with China Daily that the market for air conditioners "needed to be reconstructed after expansion in previous years".

Gree's dramatic sales drop was very much in line, however, with nationwide market conditions.

Domestic makers sold about 106 million air conditioners in 2015, down 8.6 percent compared with the previous year, according to an industry report.

Gree looks to other avenues for growth

Dong Mingzhu, Gree's president. [Photo/IC]

Midea Group, based in Foshan, Guangdong province, reported a 2.28 percent year-on-year drop in sales to 138.4 billion yuan in 2015.

Haier Group, a leading producer of white goods headquartered in Qingdao, Shandong province, was also hit hard, with sales falling 7.41 percent year-on-year to 89.7 billion yuan.

Based in Guangdong's Zhuhai, Gree was forced to reduce its prices last year, with some items being cut by as much as 1,000 yuan, according to Dong.

"The (sales) drop is partly attributed to an adjustment in air conditioner pricing and large rebates being offered to sales agents," Dong confirmed.

She said the planned emerging businesses are based on the company's already-strong capabilities in self-developed home appliances technology, especially its air conditioners, which have proved highly competitive in both domestic and overseas markets.

"It is a natural process for Gree to diversify its products as it has already developed a series of strong core technologies and efficient market channels over the years."

Gree began testing its smartphones early last year, and its second generation will be launched soon domestically, according to the company.

It said in the new-energy sector, Gree has acquired a Zhuhai energy company, with the aim of developing new-energy vehicles.

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