Sou Hu Cai Jing·2025-09-22 08:23Core Viewpoint - The rapid channel reforms by major home appliance manufacturers, Midea and Gree, are aimed at enhancing profitability and adapting to a new market cycle, with both companies implementing significant structural changes to their operations [2][18]. Group 1: Midea's Channel Reforms - Midea has made three adjustments to its operational structure this year, focusing on simplifying and enhancing efficiency within its regional operations [2][21]. - The company has rebranded its regional operations, merging various departments to streamline responsibilities and reduce costs, indicating a strong intent to maintain profit margins [2][21]. - Midea's channel reform strategy has evolved over the years, transitioning from a multi-tier distribution model to a more direct approach, significantly increasing its operational efficiency and reducing inventory turnover days [13][14]. Group 2: Gree's Channel Reforms - Gree is also undergoing significant channel reforms, including flattening its distribution structure and integrating functions back into the company, which reflects a trend of consolidating profits within the organization [3][5]. - The establishment of Gree Digital Technology companies across various provinces indicates a strategic shift towards digitalization and improved market responsiveness [4][5]. - Gree's management has acknowledged the need for reform, citing a previous complacency and the necessity to adapt to market changes, marking 2019 as the beginning of its channel transformation [12][19]. Group 3: Comparative Analysis - Both Midea and Gree are facing similar challenges in their channel reforms, particularly in managing relationships with tightly bound distributor networks, which can complicate the implementation of new strategies [18][19]. - The reforms of both companies have shown parallels, with Gree adopting strategies reminiscent of Midea's earlier reforms, indicating a learning curve within the industry [6][9]. - The inventory turnover rates and operational efficiencies of Midea have consistently outperformed Gree since 2019, highlighting the effectiveness of Midea's earlier reforms [14][16]. Group 4: Market Context and Challenges - The home appliance market is becoming increasingly competitive, with new entrants like Xiaomi gaining market share, necessitating ongoing reforms from established players [24]. - Analysts predict a more conservative outlook for the home appliance market in the latter half of the year, emphasizing the urgency for companies to adapt their strategies to maintain profitability [25][26]. - The current economic environment and the need for cost reduction are driving home appliance manufacturers to prioritize channel reforms as a critical strategy for survival and growth [18][25].