Author | Meng Xiao

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Wang Ziru's departure from Gree caused a great clamour.

According to various media reports such as Southern Metropolis Daily, Hexun.com, and Lanjing Finance, on August 16, Wang Ziru, the project leader of Gree Electric's digital channel reform, founder and CEO of the former technology media Zealer, and digital technology commentator, resigned from Gree.

There may have been early signs of Wang Ziru's resignation. On August 9, a court order issued by the Nanshan District People's Court in Shenzhen put Wang Ziru and Gree in the spotlight. At that time, insiders speculated that Wang Ziru might not stay long at Gree.

Contrary to expectations, Gree Electric's share price rose after news of Wang Ziru's resignation instead of falling. It has generally risen steadily over the past few trading days. Since the beginning of 2024, Gree Electric's share price has risen from an opening price of 32.17 yuan at the beginning of the year to a closing price of 40.96 yuan on August 20, an overall increase of approximately 27.3%, solidly outperforming the broader market. However, Midea's market value over the same period was 440.2 billion yuan, far exceeding Gree's 230.7 billion yuan, and Haier Smart Home's market value has reached 224.1 billion yuan, potentially overtaking Gree at any time.

According to the latest reports, screenshots from Gree's OA system show that Wang Ziru is currently in a resigned state. According to Gree employees, the corresponding email address could still be searched on the morning of August 16, but attempts to send emails to Wang Ziru in the evening failed to find it. The Beijing Business Daily directly disclosed screenshots of Wang Ziru's OA resignation information.

Gree has not officially responded to this matter. Just half a month ago, Wang Ziru accompanied Gree Chairman Dong Mingzhu on a night tour of Zhengding Rongguo Mansion in Shijiazhuang, Hebei Province. In the video, when introducing Wang Ziru to the outside world, Dong Mingzhu said, "This is a universally recognized young and handsome man."

Wang Ziru joined Gree in 2021 and publicly stated, "I don't look at my pay slip, I just want to be closer to Dong Mingzhu's office." Some media outlets have pointed out that recently, Wang Ziru has been added to the list of people subject to enforcement, with an execution target of over 33.83 million yuan, which may have been the trigger for his departure from Gree.

1

Why does Dong Mingzhu need Wang Ziru?

After Wang Ziru joined Gree in 2021, Dong Mingzhu had high expectations for him, hoping that he could shoulder the responsibility of channel reform. Industry insiders have pointed out that channel reform is not an easy task and is bound to conflict with dealers.

After the Spring Festival in 2020, Dong Mingzhu publicly proposed channel reform for the first time, eliminating all levels of agents and allowing dealers to directly pay and pick up goods from the headquarters. At the same time, she strengthened e-commerce by opening "Dong Mingzhu's Store," where both retailers and consumers could place orders. Dong Mingzhu may have realized that Gree's current channel model had many drawbacks.

Gree relied on a joint-stock regional distribution model to capture the market. The biggest advantage of this channel model is its ability to stabilize dealers at all levels, reduce vicious competition, provide better pre-sales and after-sales services, and achieve large-scale expansion quickly. This was very effective when the e-commerce era had not yet fully taken hold, and Gree also tightly bound the interests of the company and dealers through property rights. This model helped Gree firmly occupy the position of the "top dog" in the air conditioning market.

With the rise of e-commerce and live streaming, the drawbacks of the previous channel model have gradually been amplified, especially due to excessive intermediate links and a lack of flatness, which pushed up product prices and were detrimental to product sales. At the same time, this model also made Gree's online channel construction underpowered. Compared to its peers, Gree's channels often gave people a cumbersome and slow impression. Dong Mingzhu may have realized this pain point and recruited Wang Ziru in 2021, hoping he could change Gree's channel status quo.

In March 2022, Gree established a Digital Channel Management Department, and Wang Ziru, who joined in July 2021, was appointed as the project leader for digital channel reform. Wang Ziru's reform efforts were significant, such as implementing cloud-based wholesale reform, replacing traditional wholesale models with online ordering, and coordinating shipments from Gree headquarters, eliminating the need for dealers to obtain goods from local sales companies or subordinate agents. This reform essentially took away profits from dealers, shortened intermediate links, made prices more transparent, allowed consumers to obtain some benefits, and returned more profits to Gree.

However, the dealers' interests were harmed. According to media reports, Xu Zifa, the chairman of Hebei's general dealer Xinxing Gree, who had worked for Gree for 24 years, jumped ship to Philips. In August 2022, Xu Zifa attended Philips Air Conditioner's new product launch as a shareholder. On August 23, Gree suddenly stopped shipping to Hebei Gree because Xu Zifa was not only Gree's general dealer in Hebei for over 20 years but also a core dealer and a director of Gree from June 2015 to October 2017. Xu Zifa's departure completely exposed the conflicts between Gree dealers. At that time, China Entrepreneur reported that Dong Mingzhu said, "Due to changes in market perceptions, channel reform is a protracted battle, and dealers must learn to change themselves."

As the person in charge of channel reform, Wang Ziru previously stated publicly that under the new channel and pattern, Gree headquarters' investment efforts were unprecedented, and its reform determination was unwavering. It had formed a research and development team of over a thousand people to build a new digital marketing system and establish a fully connected supply chain covering dealer procurement, warehousing and logistics, terminal sales, and after-sales service. Wang Ziru was confident and believed he could help dealers transition smoothly in the gentlest way. However, dealers' interests were affected, and some provincial Gree dealers had previously stated that Wang Ziru would resign before Dong Mingzhu retired.

Investor Shi Baogang affirmed the effectiveness of Wang Ziru's channel reform. According to ChinaKantar data, from 2019 to 2022, the proportion of Gree air conditioners' online retail sales increased from 22.3% to 28.9%, while Midea's online share declined from 30.5% to 28.2% during the same period. After Wang Ziru's resignation, Gree's channel reform may be affected.

2

Following Meng Yutong's old path?

Currently, neither Wang Ziru nor Dong Mingzhu has responded to the "resignation" incident.

In 2023, Meng Yutong joined Gree as a pioneer in live streaming sales reform, appearing frequently in livestreams with Dong Mingzhu. However, after leaving Gree, Meng Yutong, who was once regarded by Dong Mingzhu as her successor, caused a great commotion, with Dong Mingzhu publicly criticizing her on multiple occasions.

Before joining Gree, Wang Ziru had already collaborated with Dong Mingzhu in live streaming. In 2020, during Dong Mingzhu's nationwide live streaming tour, Wang Ziru hosted several sessions with her, generating sales of 703 million yuan. That year, Dong Mingzhu's 13 live streaming sessions generated significant revenue for Gree, totaling 47.6 billion yuan, accounting for 28% of Gree's total annual revenue of 170.5 billion yuan in 2020.

In 2021, Dong Mingzhu recruited Meng Yutong and repeatedly stated in public that she was the "second Dong Mingzhu" and was even once considered her successor, becoming Dong Mingzhu's sole secretary. However, some media reports claimed that as Dong Mingzhu's secretary, Meng Yutong was not truly involved in management at Gree and did not handle any confidential files during her 20 months there. Her salary was only around 10,000 yuan, which was relatively low in the industry.

After about a year, by the second half of 2022, the "Mingzhu Yutong Selection" account had over 2.3 million followers, becoming the most popular and effective account in Gree's official Douyin matrix. In a sense, Meng Yutong completed her duties well.

Similar to Meng Yutong, Wang Ziru was also an "internet celebrity" before joining Gree. In 2010, when the domestic electronics product review market was still in its infancy, Wang Ziru became famous after opening an iMac box in a video, becoming one of the first internet celebrities in China's internet space and known as the "first person in domestic video review agencies" with over a million followers. Lei Jun invested 2 million yuan in his company, Zealer, and under Lei Jun's leadership, well-known institutions such as Tencent and Gionee followed suit with investments.

What truly made Wang Ziru famous was his debate with Luo Yonghao. When Luo Yonghao founded Smartisan Technology, Wang Ziru pointed out flaws in the design of the Smartisan T1 product, while Luo Yonghao insisted that there were no issues with his product and that Wang Ziru's review contained numerous errors and biases. In a heated three-hour debate on Youku, Luo Yonghao's eloquence outshone Wang Ziru's, and Luo Yonghao's remark, "Those who are kept should not talk about independent personalities," became a viral internet catchphrase.

Judging from public statements, Dong Mingzhu previously held Wang Ziru in high regard. She publicly stated, "Wang Ziru is not on the same level as other internet celebrities. He has been tempered by the market and has a different understanding of life."

After joining Gree, Dong Mingzhu frequently appeared with Wang Ziru in high-profile events, but after joining Gree, Wang Ziru became much more low-key. In public situations, he often attended important Gree activities as a supporting character alongside Dong Mingzhu.

In 2022, Wang Ziru began to appear frequently in front of Gree dealers in various provinces, conducting "cloud-based wholesale" reform channel seminars and traveling to Anhui, Jiangxi, Hebei, and other provinces, becoming a pioneer in Gree's channel reform.

It is worth mentioning that according to Gree Electric's financial reports in recent years, Wang Ziru has never appeared in the table of executive compensation.

3

Dong Mingzhu's backup plan

According to China Business News, Gree is promoting a new online wholesale system in various regions to change traditional procurement methods and reduce sales levels. Although this system was guided by Dong Mingzhu, it was Wang Ziru who truly implemented and improved it.

Now that Wang Ziru, the person in charge of channel reform, has resigned, will it affect Gree's strategy?

In May this year, Gree internally issued a notice appointing Lu Luqun as the sales director of the Household Appliances Business Department. Lu Luqun had previously won the "Dealer Defense War" in Hebei for Gree. There was only a three-month "buffer period" between Lu Luqun's new position and Wang Ziru's resignation.

Some Gree employees have disclosed to the media that there is significant overlap between Wang Ziru's and Lu Luqun's responsibilities, which may have contributed to Wang Ziru's resignation. Wang Ziru may have found it difficult to accept Lu Luqun's leadership.

During his time at Gree, Wang Ziru offended many dealers with his channel reforms. According to a Cailian Press report in May 2023, Wang Ziru first appeared as the head of channel reform at a Gree Electric (Jiangxi) new marketing model seminar, urging dealers to recognize the general trend and not focus solely on short-term interests. At the time, some interviewed dealers stated, "Many dealers struggling on the brink of profitability may not survive the next year if they disregard short-term interests."

Judging from various signs, Wang Ziru's primary focus during his time at Gree was on promoting new retail and digital transformation in channels. Therefore, his resignation's impact on Gree is limited, as evidenced by recent changes in Gree's share price. Compared to Wang Ziru, Lu Luqun, a "veteran" of Gree, has a solid resource background and has almost single-handedly stabilized the development of the Hebei market, earning industry confidence in his ability to take over channel reform.

Where will Wang Ziru go after "resigning" has become a focus of public attention. Some tech bloggers have revealed that Wang Ziru's appearance fee at a product launch can reach up to 600,000 yuan. As one of the first internet celebrities, Wang Ziru has a certain level of popularity, whether he chooses to continue his entrepreneurial journey or follow in the footsteps of Luo Yonghao and engage in live streaming sales.

The article reflects the author's personal views. For any questions or feedback, please leave a comment below.