Setting course for business growth
Updated: 2015-02-02 07:16
By Qiu Quanlin In Zhuhai, Guangdong(China Daily USA)
Greechair woman says it will never pursue short-term goals, such as scaling up in size
It is not easy to miss the massive complex in the Pearl River Delta city of Zhuhai that houses the headquarters of the State-owned Gree Electric Appliances Inc.
While the company is often showcased as a shining example of entrepreneurial success in China, its top executive has often been cited as one of the leading icons of the economic revolution that made China a global manufacturing powerhouse.
Dong Mingzhu, the chairwoman and president of Gree, a domestic home appliances manufacturer, however, does not believe in such laurels. Rather, she knows she has her task cut out, as the company needs to keep adapting to the fast-changing market environment to retain its market share and profits.
"We have a clear vision on the road ahead. Gree will never pursue short-term goals like scaling up in size or being a part of the world's top 500 companies. These are certainly not our goals," said Dong.
"I have a dream - that is for Gree to develop in a healthy and sustainable way. My vision is to develop Gree as a century-old business that is responsible for its employees and the society," she said.
The company has managed to achieve annual revenue in excess of 20 billion yuan ($3.2 billion) since 2011 and this, Dong said, would provide a stable platform for future growth.
"Gree needs to grow as an evergreen tree, energetic and full of vitality. We will not become a willow - whose leaves will fall after a short-term prosperity full of branches and leaves," Dong said.
The 61-year-old Dong has over the past 25 years been an integral part of the ups and downs in Gree's transformation.
She joined the company in 1990 as a sales agent and four years later became the sales director after Gree saw an exodus of sales managers.
Her efforts and hard work seemed to have paid off when Gree increased its sales from just 400 million yuan in 1994 to more than 2.8 billion yuan in 1995.
"We introduced a corporate structure system, which put us on a healthy development path," Dong said.
Gree's business grew even faster after Dong became general manger of the company in 2001, with sales increasing from 5 billion yuan that year to more than 80 billion yuan in 2011.
Dong, who took the helm at the company in 2011, said Gree's journey has been remarkable, as it did not resort to any external borrowings, especially from banks, since 1997.
"We have managed to achieve a healthy development mode. There is always a corporate culture behind business growth. Like many of our peers, we have grown bigger and won many laurels. But that is not really what we wanted to do," she said.
The rapid pace of urbanization during the past decade has created a huge demand for home appliances in China.
"Gree grew as the market demand expanded. But now we have to think of a new development pattern that will enable us to achieve sustainable growth, even in a slowing market," she said.
The home appliances industry in China has been slowing in the past few years, with the growth rate for air conditioners falling from 6.8 percent in 2013 to 5.2 percent in 2014, according to AVC, a consulting company that specializes in home appliances data.
According to Dong, Gree plans to focus more on technology and innovation, areas it considers as its core competitiveness, for future growth.
"We will increase investment in technology and innovation to develop more environmentally friendly products to cater to the market demand," Dong said.
The company has made a beginning in this regard by launching an air conditioner that runs on photovoltaic power and consumes very little energy.
"It was more like a technology revolution in the home appliances industry. In the past, very few people would think of using photovoltaic technology to power air conditioners," Dong said.
Gree is also embarking on an ambitious journey to boost its presence in overseas markets, said Dong, adding that the company would look to export products, technology and management.
"Going overseas is not simply about building manufacturing facilities. We will also introduce our technology and management to the overseas markets," Dong said.
The company has seven manufacturing facilities in Zhuhai, Chongqing, Hefei, Zhengzhou, Wuhan, Shijiazhuang and Wuhu. It also has manufacturing units in Brazil and Pakistan.
Dong, who always remains modest about her contributions, was ranked as one of the most powerful businesswomen in the country during 2014 by Fortune China. The magazine praised her for her influential role in transforming Gree to an eminent position in the global home appliance industry.
Moreover, Dong has often been more than willing to adapt to, or in many cases, fully embrace the changing industrial trends. An example of this is the company's recent foray into online services.
"As a key player in the traditional manufacturing sector, we attach great importance to the Internet business and have started online sales to meet market demand," Dong said.
Gree reported 132.5 million yuan in online sales during the Nov 11 Singles' Day online shopping spree, selling more than 47,000 air conditioners, according to figures provided by the company.
Sales of the Shenzhen-listed company increased 16.63 percent from a year earlier to almost 140 billion yuan in 2014.
"The growth was driven by increased efforts in technology and innovation, improved management, readjustment of product structure and lower prices of raw materials," Dong said.
Gree, whose products sell in more than 100 countries and regions, reported a net profit of 14.12 billion yuan in 2014, up 29.84 percent year-on-year, according to the company.
"The booming e-commerce segment will help drive a new round of business growth for Gree," Dong said.
Besides selling on major domestic e-commerce service providers including Tmall and JD.com, the company launched its self-developed online platform in December.
"It was the right time for traditional home appliance manufacturers like Gree to launch e-commerce services," Dong said, adding that before launching the online platform, the company was also planning to start after-sales services that could meet the demands of customers.
"We were thinking of ways to cater to demand from both offline and online customers. We want to ensure that we can provide the same quality of services for them. Our goal is to deliver good products and satisfy our customers," Dong said.
Consumers attracted by Gree's promotion campaign at an outlet in Shenyang, Liaoning province. As China's leading air conditioner maker, Gree has tens of thousands of stores across China and its products are widely used in homes and office buildings in more than 100 countries and regions. Provided to China Daily
(China Daily USA 02/02/2015 page14)