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Gree and Midea, two giants in China's home appliance industry, have long been rivals in the air conditioning sector. In just ten days at the end of June, Gree filed four patent infringement lawsuits against Midea, demanding nearly 100 million yuan in damages. These two companies, which dominate over half of China's air conditioning market, are not just competitors but also arch-nemeses.
Dong Mingzhu, who took charge of Gree in 2012, has always been critical of Midea. Over the years, Gree and Midea have engaged in numerous disputes, with their conflicts often escalating beyond mere product disputes. For instance, in 2008, Gree accused Midea of infringing on its "custom curve" air conditioning patent, resulting in Midea being ordered to cease sales and pay compensation.
Despite these legal battles, the rivalry goes beyond courtrooms. Gree and Midea have exchanged accusations of academic fraud, with Gree alleging that Midea misrepresented its energy-saving technology, while Midea accused Gree of similar misconduct involving its inverter technology. These exchanges reflect the deep-seated animosity between the two firms.
Midea’s advertising slogan, which originally stated "one night of one degree," drew particular ire from Dong Mingzhu, who accused it of misleading consumers. Even after Midea altered its slogan to "a night of low power," Dong Mingzhu continued to criticize it, reiterating her stance at public forums like XinhuaNet's "Skeele Lecture Room."
The root of the conflict lies in the shrinking domestic air conditioning market and Gree’s struggle to diversify. Gree's reliance on air conditioning as its primary revenue source has left it vulnerable, especially as Midea has successfully ventured into multiple sectors. Midea's revenue and market value have surpassed Gree, and its international acquisitions, including stakes in KUKA Robotics and Toshiba's white goods division, demonstrate a strategic edge Gree has yet to match.
While Gree has remained focused on air conditioning, Midea has embraced diversification and globalization, positioning itself as a global leader. Gree's attempts to diversify into mobile phones and new energy vehicles have not yielded significant results, leaving Dong Mingzhu frustrated. Meanwhile, Midea’s aggressive expansion abroad highlights a clear advantage in global competitiveness.
In conclusion, Gree faces immense pressure to innovate and diversify, while Midea continues to leverage its broader portfolio to stay ahead. The rivalry between Gree and Midea is not just about market share but also about defining the future of Chinese home appliances. As Gree struggles to adapt to changing market dynamics, Midea’s path seems clearer, suggesting a potential shift in leadership within the industry.