Core Viewpoint - The article discusses the challenges faced by Midea Group in its high-end market strategy, particularly with its brand COLMO, which struggles to differentiate itself from competitors like Haier's Casarte. The analysis highlights the importance of brand positioning, resource allocation, and the cultural factors influencing Midea's approach to high-end branding [2][4][7]. Group 1: Financial Performance and Shareholder Returns - Midea Group has a substantial cash reserve of 320 billion yuan and has committed to increasing its dividend and share buyback ratio, with plans to repurchase 5 to 10 billion yuan worth of shares [2][3]. - The company reported a revenue of 409.1 billion yuan, with a net profit of 38.54 billion yuan, indicating strong financial health [20]. Group 2: High-End Market Challenges - Midea's high-end brand COLMO generated 8 billion yuan in revenue in 2022, accounting for only 2.6% of total revenue, while Haier's Casarte exceeded 26 billion yuan, highlighting a significant gap [4][5]. - COLMO's revenue is projected to reach around 10 billion yuan in 2024, still falling short compared to Casarte's over 30 billion yuan [5]. - The dual-brand strategy of COLMO and Toshiba has shown a retail sales growth of over 20% in the first half of 2024, but Casarte's growth remains strong at 12% [5][6]. Group 3: Brand Positioning and Strategy - COLMO faces a "sandwich" dilemma, struggling to compete with both luxury international brands and lower-tier competitors like Casarte, which has established a strong market presence over 12 years [7][8]. - Midea's initial strategy for COLMO involved positioning it above Casarte in price, targeting a niche elite market, but this has not resonated with consumers who prefer established luxury brands [7][8]. - The company has begun to adjust its strategy by focusing on single-store productivity and service quality rather than aggressive growth targets [23]. Group 4: Resource Allocation and Brand Development - COLMO has fewer experience centers compared to Casarte, with only about 300 locations, primarily in first- and second-tier cities, while Casarte boasts 1,500 experience stores [11]. - Midea's marketing expenditure is lower than Haier's, with a sales expense ratio of approximately 9.5% compared to Haier's 11.7%, impacting brand visibility and consumer engagement [11][20]. Group 5: Cultural and Operational Factors - Midea's corporate culture emphasizes efficiency and cost control, which has led to a focus on short-term results rather than long-term brand building [18][19]. - The company's operational model, which prioritizes quick market responses, has hindered its ability to invest in high-end brand development compared to competitors like Haier, which can afford to sustain losses for longer periods [21][24]. - Midea's shift towards a diversified business model, including B2B operations, aims to create a safety net and reduce reliance on high-end consumer markets [25][26].