In early April, the home appliance industry witnessed a new round of collective price hikes. Major brands such as Midea, Haier, Hisense, TCL, and Aux announced official price increases of 5% to 30% for products like air conditioners and refrigerators, citing rising raw material costs and increased pressure on profit margins.

At the same time, Gree Electric Appliances made a starkly different choice.

Zhu Lei, CMO of Gree Electric Appliances, recently stated, 'Gree's household air conditioners will Resolutely not to raise prices (resolutely not raise prices). During the period of national subsidies, prices will remain stable, quality will not decline, and genuine copper materials will remain unchanged, ensuring that 100% of the national subsidy benefits for trade-ins reach consumers directly.' He Specially added (deliberately added), 'This is something Chairman Dong Mingzhu has always emphasized—that companies should not only consider immediate costs but also long-term conscience.'

The deliberate emphasis from Gree's executives can be seen as a reflection of the company's corporate culture or as an extension of Dong Mingzhu's strong management style. Exactly one year ago, in April, Gree Electric Appliances held a temporary shareholders' meeting at Zhuhai Gree Electronic Components Co., Ltd., where a resolution on the board's re-election was passed. Dong Mingzhu was smoothly elected as the new board chair with over 3.5 billion votes in favor and a 124% approval rate, marking the start of her fifth three-year term at the helm of Gree.

Unlike in previous terms, Dong Mingzhu did not take on the role of president this time, which was instead filled by Zhang Wei, the long-serving party secretary. This move suggests that the 71-year-old 'Iron Lady' is delegating daily operational responsibilities to others while focusing more on steering Gree's overall direction.

Her re-election was not surprising, but her decision to step down as president carries significant implications.

Dong Mingzhu is paving the way for Gree's future, though past attempts at succession planning have often fizzled out. She must continue to safeguard the foundation of the Gree empire she built while navigating market disruptions and performance pressures—time is not on her side.

The curtain has risen on the power transition, but the real transition (transition) is far from complete.

I. Dong Mingzhu's 'Conscience Account'

By the end of 2025, copper prices on the London Metal Exchange had surged to a record high of $11,461 per ton. Copper accounts for 15% to 20% of the cost of an air conditioner, and the immense cost pressure left the entire air conditioning industry restless.

In December of the same year, at the Home Appliance Science and Technology Annual Conference, 19 air conditioning companies, including Midea, Haier, Hisense, TCL, Aux, and Xiaomi, signed the 'Self-Regulatory Pact of the Air Conditioning Aluminum Application Research Working Group,' explicitly promoting the use of 'aluminum as a substitute for copper.'

The logic of supporters is straightforward. With copper prices hitting a record high of $11,461 per ton by the end of 2025 and accounting for 15%–20% of air conditioning costs, replacing copper with lower-cost aluminum could significantly alleviate cost pressures in the short term.

At the policy level, the 'Implementation Plan for the High-Quality Development of the Aluminum Industry (2025–2027)' jointly issued by ten departments, including the Ministry of Industry and Information Technology, also lists 'aluminum substitution for copper' as a key focus for expanding aluminum consumption. It can be said that 'aluminum substitution for copper' is becoming an industry trend.

Gree Electric Appliances' response, however, seemed somewhat 'out of step.' Dong Mingzhu bluntly stated, 'We have researched aluminum technology for many years but still insist on not using 'aluminum as a substitute for copper' because it has not yet met the same technical conditions and guarantees as copper.' She added, 'We will continue researching until aluminum can fully replace copper—then we will use aluminum.'

Gree's official statement also emphasized that to meet the service standard of a 10-year free warranty for household air conditioners, the company would not adopt the 'aluminum substitution for copper' approach for now.

The choice between copper and aluminum is not overly complex from a technical standpoint.

Data shows that the average price of electrolytic copper in the first quarter of 2026 had risen more than 33% from the end of 2025, with copper accounting for 20% to 30% of air conditioning costs. Under the same volume, the comprehensive cost of aluminum is only about one-twelfth that of copper.

For a 1.5-horsepower air conditioner, using copper instead of aluminum in components like heat exchangers and connecting pipes could increase costs by 200 to 300 yuan per unit.

By 'not raising prices,' Gree is absorbing these costs with its profit margins, directly impacting the company's short-term profitability. However, Dong Mingzhu is calculating a different equation.

In December 2025, she again explained Gree's logic. Aluminum's thermal conductivity is only about 60% that of copper, and its corrosion resistance is relatively weak. If aluminum is forced to replace copper, air conditioners are likely to experience refrigerant leaks or pipe perforations within three to five years. Material properties make it difficult for aluminum to meet the requirement of a service life exceeding ten years.

For consumers, an air conditioner made with high-quality materials might cost only 5,000 yuan in annual electricity bills, while one made with low-quality substitutes could cost up to 10,000 yuan—making long-term operating costs unfavorable.

The choice is between saving a few hundred yuan now to protect profits or pursuing a long product lifecycle. Dong Mingzhu chose the latter. In her view, corporate competition is not a 100-meter sprint but a marathon. Quality, as the company's strongest asset, cannot be compromised due to short-term cost pressures.

This 'commitment to copper' stance aligns with Dong Mingzhu's consistent quality-first philosophy. She has often publicly stated her quality philosophy: 'Quality concerns two lives—the life of the consumer and the life of the enterprise.'

As early as 1995, as the head of the Operations Department, Dong Mingzhu, to address severe defects in components, advocated for the establishment of a unique 'Screening Branch' within Gree—the first of its kind in China's air conditioning industry—to conduct 'customs-like' inspections of all outsourced components.

This approach was seen as 'the dumbest method' at the time, but time has proven its value. Currently, Gree's air conditioner failure rate has dropped to three in 10,000 units, meaning only three out of every 10,000 air conditioners sold require repairs.

This stringent quality management system supported Gree in being the first to offer a '10-year free warranty' in 2021 and has made 'Good Air Conditioners, Made by Gree' deeply ingrained in consumers' minds over the years.

The commitment to quality has also brought tangible market rewards to Gree. In 2025, despite sluggish domestic demand for air conditioners and intense industry price wars, Gree's offline market share reached 29.42%, remaining at the top of the industry. Its average product price rose 2.15% against the trend to 5,027 yuan, making it the only leading brand in the industry to achieve positive price growth.

II. The Other Side of the 'Iron Lady'

On the flip side, Dong Mingzhu's management style is also marked by conservatism, stubbornness, and an unrelenting desire for control.

In the early days, the 'Gree' trademark belonged to Gree Group, and its small home appliance company, after authorization, flooded the market with products of varying quality.

To protect the reputation of Gree Electric Appliances, which she had worked so hard to establish as a 'specialized air conditioning operator,' Dong Mingzhu refused to acknowledge Gree's small home appliance business, believing that 'whether diversified or specialized, success is impossible without focus.'

This steadfastness successfully solidified the professional image of 'Gree as an air conditioning specialist' in consumers' minds and allowed Gree to gain entry into millions of households through air conditioners. However, it also meant missing the best opportunity to layout (layout) in smart homes.

In 2014, Google's $3.2 billion acquisition of Nest, a smart thermostat company, was seen by the industry as the catalyst for the global smart home industry's explosion.

That same year, domestic industry giants joined the layout (layout). Haier officially launched its U+ Smart Home Open Platform, providing industrial, market, and financial support to developers. Within a year, it formed strategic partnerships with companies like Meizu, Microsoft, Intel, Apple, and Huawei.

Midea, after announcing its M-Smart strategy, quickly brought in Xiaomi as a strategic investor, signed a comprehensive cooperation agreement with JD.com, and gradually advanced M-Smart from a system white paper to an ecosystem plan and finally to the operational launch of a smart living services platform.

In March 2014, Gree also outlined its smart home strategy blueprint for the first time. However, unlike other home appliance giants, Gree's blueprint was quite restrained: 'Focus on enhancing air conditioning intelligence to become the household's energy and environmental management center, rather than pursuing overall smart home integration.'

This statement itself implied Gree's understanding of the smart ecosystem's boundaries—that smart homes were an extension of its air conditioning business, not an independent strategic track requiring systemic reconstruction.

As a result, Gree's smart home strategy remained largely 'idling' for the next five years. It wasn't until the end of 2019 that Gree showcased a panoramic smart home blueprint where all its home appliances could interconnect through five control entry points: Gree voice-activated air conditioners, the Gree+ App, IoT-enabled smartphones, smart door locks, and Magic Cube elf (Magic Cube elf , likely referring to a smart device).

By then, Midea had already completed AI integration for over 150 home appliance categories, and Haier's U+ platform had evolved to its 2.0 stage. Gree was a full five years behind in moving from strategic disclosure to substantive product implementation.

Dong Mingzhu also recognized the importance of creating an entry point for smart homes. When discussing Gree's foray into smartphones, she explicitly stated that it was 'to gain control over future smart homes.'

In 2015, Gree launched its first-generation smartphone. Dong Mingzhu set an ambitious target of 'selling over 100 million units in three years' and even claimed that 'Gree smartphones are no worse than Apple's.' However, a decade later, by 2024, Gree's cumulative smartphone sales had not exceeded 500,000 units, with main models selling only in the thousands.

Gree's smartphone strategy followed the same logic as its home appliance operations—no product launches, high pricing, limited distribution channels, and outdated system experiences—which clashed with the fast-paced nature of the smartphone industry. Dong Mingzhu's statement that she 'doesn't care about smartphone sales' also suggested that the smartphone business had never truly entered Gree's mainstream orbit.

In contrast, Haier and Midea completed their entry-point layout (layouts) through different paths: Haier collaborated with tech giants like Baidu and Microsoft to supplement its entry-point shortcomings through third-party ecosystems; Midea, through its Midea Home App, accumulated over 23 million monthly active users and achieved deep interconnection with partners like Huawei, vivo, BYD, and NIO, building a 'human-vehicle-home ecosystem.'

Gree, however, chose a 'self-reliance' path, developing its own smartphones and building its own entry points. But due to insufficient resource investment and weak product competitiveness, this path never succeeded. As a result, while competitors reached users through multiple entry points and touchpoints, Gree's smart home user engagement remained highly dependent on air conditioners as the sole category.

As of the first half of 2025, Gree Electric Appliances' consumer appliances segment, with air conditioners as its core business, generated 76.279 billion yuan in revenue. Although this represented a 5.09 percentage point year-on-year decline, it still accounted for 78.38% of total revenue—meaning nearly 8 yuan out of every 10 yuan in Gree's revenue came from air conditioners.

In 2022, Dong Mingzhu admitted that 'Gree is trapped by air conditioners,' but three years later, this situation has not fundamentally changed.

Compared to Midea, whose B-end business now accounts for 26%, and Haier, which maintains a dominant global lead in refrigerators and washing machines, Gree's diversification efforts appear slow and strenuous.

Beyond smartphones, Gree's high-profile acquisition of Yinlong New Energy in 2016 has yet to become a growth engine for the company.

Its chip layout (layout), while considered an important pillar of Gree's 'B-end strategy' with chip revenue exceeding 10 billion yuan, remains focused on mid-to-low-end industrial chips and has not yet become a stable growth driver for performance.

Dong Mingzhu's long-standing commitment to 'specialization' was undoubtedly correct during the air conditioning boom. However, as the industry enters a phase of Stock game (stock competition), heavy reliance on a single business has become a constraint on performance expansion.

In the first three quarters of 2025, Gree Electric Appliances' main business revenue was 137.654 billion yuan, down 6.62% year-on-year, while net profit attributable to shareholders was 21.461 billion yuan, down 2.27% year-on-year. During the same period, Midea Group's revenue reached 364.7 billion yuan, about 2.65 times that of Gree; Haier Smart Home's revenue was 234.05 billion yuan, about 1.7 times that of Gree. At AWE 2026, Gree showcased AI chips, industrial robots, CNC machine tools, and whole-house smart appliances, attempting to convey the message that Gree is already a technology-driven industrial group. Vice President Zhu Lei also emphasized, 'Gree is no longer just an air conditioner manufacturer.'

However, Gree's self-assertion is unlikely to quickly change the deep-rooted consumer perception that 'Gree equals air conditioners.'

III. The View from the Peak

In April 2025, Gree Electric Appliances held a temporary shareholders' meeting where Dong Mingzhu stepped down as president, succeeded by Zhang Wei. The post-1970s management team began assuming more substantive management responsibilities.

However, Dong Mingzhu does not seem eager to retire. She once said, 'None of my shareholders would want me to step down. Those who want me to retire are not shareholders, let alone my employees.'

This adjustment appears more like a 'limited decentralization': Dong Mingzhu remains as chairperson, steering the strategic direction, while Zhang Wei acts more as a 'chief steward,' responsible for implementing Dong's strategic will rather than serving as a true successor.

But an unavoidable fact is that Dong Mingzhu, at 71, is nearing the end of her career, and the issue of succession is becoming increasingly urgent.

Dong Mingzhu had previously groomed several 'prospective successors,' such as Meng Yutong, who was noted for her enthusiasm for live streaming, and Wang Ziru, whom Dong Mingzhu praised as having 'market experience.' However, neither ultimately stayed.

Today, Dong Mingzhu publicly states that she has identified three to four candidates who are currently being groomed on different platforms. Yet, while the topic of 'succession' is repeatedly raised at Gree, no clear answer has emerged.

In contrast, Midea and Haier have achieved relatively smooth management transitions.

Among the second-generation successors in the home appliance industry, Fang Hongbo of Midea has led the company through a largely successful diversification transformation despite controversy, thanks to his sharp and ruthless management style. Zhou Yunjie of Haier has demonstrated an open mindset, stabilizing Haier's performance within a relatively limited scope while advancing global brand acquisitions and ecosystem construction.

The common logic behind these transitions is that through long-term institutionalized organizational development, corporate management succession has shifted from passive to proactive, from appointment to natural progression, rather than relying on the whims of individual preferences. This approach also avoids potential power vacuums that could arise from a rocky transition under strong leadership.

Currently, Dong Mingzhu's personal IP is deeply tied to the Gree brand. In early 2025, several Gree stores in China were renamed 'Dong Mingzhu Health Home,' reflecting how Gree's strong management core is now intertwined with its brand value.

Judging by Dong Mingzhu's actions over the past year, she appears to be methodically advancing the power transition. After stepping down as president, she gradually relinquished core positions at four Gree-affiliated subsidiaries, spanning from chip businesses to new energy sectors.",