Midea CEO Dong Mingzhu Criticizes Companies for Deceptive Traffic Tactics: Gree Air Conditioning Refuses OEM Production

In a move that underscores its long-standing commitment to quality over quick wins, Gree Electric’s Chairwoman Dong Mingzhu recently presided over the opening of a new “Dong Mingzhu Health Home” store in Zhengzhou, Henan province. During the event, she offered a pointed critique of certain business practices prevalent in the digital age, particularly those she views as prioritizing fleeting online buzz over tangible product value.

Mingzhu didn’t mince words when addressing the current obsession with internet traffic. While acknowledging the power of the online sphere for marketing and promotion, she cautioned against the tendency of some companies to use aggressive tactics against competitors, along with exaggerations in their own marketing campaigns. The implication was clear: the pursuit of short-term gains through sensationalism and clickbait tactics is a recipe for long-term failure.

Mingzhu contrasted this approach with Gree’s core philosophy. She argued that building a sustainable business required building genuine consumer trust, built on quality. Consumers, she emphasized, have remained loyal in the face of challenges.

Central to Gree’s strategy is its unwavering dedication to in-house manufacturing. The company, she revealed, designs and produces everything from small items like glucose meters to its core appliances. Gree eschews the practice of OEM production, believing that such an approach compromises the degree of control over the final product’s quality.

Mingzhu explained that while OEM practices might offer short-term benefits like reduced costs and improved profit margins, they ultimately weaken control over the manufacturing. The decision, she explained, stems from a central commitment to the customer. Gree is willing to accept higher manufacturing costs to maintain control.

For example, when talking about Gree air conditioners: “a Gree air-conditioner can work for 10 years without a problem. If those products break down after a few days or a few months, it would be unacceptable. By manufacturing everything in-house, we have strong quality control standards, and know what goes in at every step of the manufacturing process. We have clear and accurate control methods for manufacturing standards and product parameter standards.”