Core Viewpoint - Gree Electric Appliances, a leading player in the air conditioning market, is facing increasing competition from Xiaomi and others, prompting a need for service upgrades and strategic responses to maintain its market position [1][4]. Group 1: Market Position and Competition - In August 2023, Gree's online sales market share reached 24.4%, surpassing Midea, while still maintaining a significant gap over Xiaomi and other brands [1]. - Gree's market director emphasized the company's long-standing service offerings in response to Xiaomi's announcement of a "10-year free repair" service, indirectly questioning Xiaomi's product quality control [1][9]. - The rivalry between Gree and Xiaomi has intensified, particularly following a patent infringement lawsuit where Gree won against Xiaomi, highlighting the competitive tension in the industry [4]. Group 2: Financial Performance - Gree's air conditioning segment reported a revenue of 762.8 billion yuan in the first half of 2025, a year-on-year decline of 5.1%, indicating pressure on demand [5]. - Overall revenue for Gree Electric in the same period was 973.25 billion yuan, down 2.46%, while net profit increased by 1.95% to 144.12 billion yuan [5]. - In contrast, competitors like Midea and Haier reported significant revenue growth, with Midea's revenue increasing by 15.7% to 252.3 billion yuan [5]. Group 3: Industry Trends and Challenges - The air conditioning market is experiencing structural changes, with low-end models gaining popularity, which contrasts with Gree's focus on mid-to-high-end products [6]. - Gree's limited success in launching sub-brands to target the price-sensitive market has hindered its ability to compete effectively against rivals that utilize multi-brand strategies [6]. - Despite the challenges, Gree has seen significant growth in innovative products, such as the "no direct wind" series, which experienced a 131% increase in sales [7]. Group 4: Strategic Initiatives - Gree has introduced new retail formats, such as "Dong Mingzhu Health Home" stores, to enhance customer experience and drive sales, with the first store achieving over 85.6 million yuan in sales on its opening day [7]. - The company is focusing on improving consumer awareness of its differentiated products through experiential marketing, addressing the gap in consumer understanding of technology benefits [8][9]. - Gree's long-standing reputation for quality and service remains a competitive advantage, although it must adapt to the evolving market landscape and consumer preferences [9].