Midea, Earning 140 Million a Day, Wants to Shed Its ‘Home Appliance Company’ Label?

Midea Begins Overhauling Its After-Sales Service.Recently, Midea issued two after-sales service announcements within a week, focusing on two key points:It reminded consumers not to trust non-official platforms or unauthorized third-party agencies to avoid property losses or service disputes.Midea emphasized the transparency of its after-sales service in three key areas: service progress, pricing standards, and service specifications.This statement was sincere and well-received, garnering positive comments. However, upon reflection, it’s worth noting that transparency in after-sales service should be standard for any company, especially in the home appliance industry. The more something is emphasized, the more it suggests a possible flaw. Does Midea’s after-sales service have issues?A review of relevant reports shows that Midea Group recently added 10 consumer complaints to the 12315 consumer complaint platform, with half of them concerning after-sales service. Based on user feedback, Midea’s after-sales service response time, professionalism, and product quality control seem to be falling short compared to its old rival, Gree. This contrast appears inconsistent with Midea’s position as an industry leader — where is the problem?Midea: “Out with the Old, In with the New”?Improving after-sales service is not a difficult goal. With enough resources, the improvements could be immediate. Gree’s after-sales service praise mainly focuses on three factors:A large number of service points.

A sizable customer service team with a 24-hour hotline that responds quickly.Professional repair staff.These advantages do not require technical breakthroughs, and with sufficient manpower and funding, replicating them should not be too challenging. As the industry leader, Midea has both the money and the workforce. According to financial reports, Midea Group’s total revenue in Q1 of 2025 was 128.4 billion yuan, a 20.6% increase year-over-year. Its net profit reached 12.75 billion yuan, up 41.1%, and net profit attributable to the parent company was 12.4 billion yuan, a 38.0% increase. This equates to a daily net profit of about 140 million yuan, more than Gree and Haier combined.On the other hand, data from Tianyancha shows that Midea’s total employee count exceeds 198,000, surpassing both Gree and Haier. For Midea, the question is not whether improving after-sales service is possible, but whether it wants to do so.In June this year, Midea announced a voluntary recall of about 1.7 million U-shaped and U+ window air conditioners sold in the U.S. and Canada. The recall was due to the possibility that the design of these units “may sometimes block the rapid drainage of water, leading to mold growth and potentially posing a risk of respiratory diseases or other infections to some consumers.” However, according to Midea’s official response, these air conditioners actually met North American market product standards, and the mold issue was a rare occurrence triggered by special environmental conditions.

Moreover, the complaint rate was low, with only 152 reports of mold-related issues out of 1.7 million units sold, less than 0.01%. Nevertheless, Midea decided to initiate the recall in order to maintain its brand image in the North American market.This shows that, with enough attention, Midea’s after-sales service could not only meet expectations but exceed them. In contrast, domestic consumers might not receive the same level of service.According to the 12315 platform, Midea Group’s recent complaints involve failure to fulfill national “three guarantees” (repair, replacement, refund), substandard products, and false advertising. Even after mediation, many of these issues remain unresolved. While it was once common for export standards to exceed domestic ones, this is now considered outdated.In September 2022, Chinese consumers discovered that the soy sauce sold by Haitian in Japan had a list of ingredients that only included natural components like water, soybeans, wheat, and salt. In contrast, the same product in China contained multiple food additives, triggering a “double standard” controversy. Following the incident, the company’s market value fell, and its reputation suffered. Similarly, in October 2024, Wei Long faced a recall of 43 kg of “Kiss Fire” products in Japan due to excessive food additives, even though the same products were still sold in China, raising questions about differences in food safety standards.

Both Haitian and Wei Long’s controversies highlight that Chinese consumers no longer tolerate double standards — what Europeans can enjoy, Chinese consumers should have as well.A Lesson for Midea.Midea seems to need to pay more attention to the domestic market. In recent years, Midea has been focusing more on new business lines. Fang Hongbo, the Chairman of Midea, has stated that the B2B business will become its second growth curve, aiming for 50% of its revenue from both B2B and B2C sectors. At the “Top 100 Light Industry Enterprises New Quality Development Conference,” Midea’s Vice President Wang Jianguo mentioned that the company plans to invest at least 50 billion yuan in R&D over the next three years, focusing on AI models, new energy, robotics, and embodied intelligence.Compared to this, traditional home appliances seem to be the label Midea wants to shed. In its overseas business, Midea is adhering to the “OBM (Own Brand) First Strategy.” In 2024, Midea’s OBM business grew by 35%. Building a brand in a new market is not easy; it requires years of effort. During this growth phase, Midea’s overseas brand image is crucial. This also explains why Midea was willing to spend resources to recall 1.7 million air conditioners. On the other hand, Midea’s domestic brand power is well-established, and the white goods market is stable. In this market, winning is hard, but losing is even harder. Unless there is a disruptive technological breakthrough, Midea’s market share growth may be limited, even if it increases competition.

Midea’s New Business is Also Highly Competitive.In April of this year, a small controversy erupted between Midea and Gree in the public opinion sphere over who holds the “top spot.” The dispute stemmed from both companies claiming to be “the industry leader in online market share” in their 2024 financial reports, both citing data from Aowei Cloud Network. After some back-and-forth, Aowei clarified that both companies’ data were accurate but had different dimensions: Midea’s data included multiple brands within the Midea Group, while Gree’s data referred to Gree’s single brand. In simple terms, Gree ranked first in single-brand market share, while Midea led when combining all its brands.This reflects the differing strategies of the two companies in dealing with market competition. Gree has focused on excelling in one track, while Midea has been more flexible, diversifying into multiple tracks and using scale to its advantage. It is generally believed that Midea’s approach has greater growth potential, which is supported by the significant gap in their market values. Whether it’s expanding overseas, diversifying, or focusing on the B2B sector, Midea’s transformation and upgrade have certainly been more successful. In contrast, Gree still relies heavily on a single business and market. Its air conditioning business contributes over 70% of its revenue, with domestic sales accounting for over 80%.However, even with these advantages, Midea is not yet in the position to pop champagne, as the new business sectors remain highly competitive.

Slowdown in Overseas Appliance GrowthFirst, the overall growth rate of Chinese home appliance exports has slowed. According to an analysis report from the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, in the first half of 2025, the global export value of China’s white goods reached $68.78 billion, marking a 6.2% year-over-year growth, a significant slowdown from 13.2% in 2024. In May, exports decreased by 2.2% year-over-year, and June saw a further drop of 5.3%.Corresponding with this, the quantity of Chinese home appliance exports is rapidly increasing. In 2024, exports of household appliances reached 448.14 million units, up by 20.8% from the previous year. Haier, with its seven major appliance brands, saw over 50% of its revenue come from overseas. Xiaomi, leveraging its strong cost-performance advantage, has rapidly grown in Southeast Asia. According to TMO Group’s research, Xiaomi leads the online market share for products like air purifiers, humidifiers, and dehumidifiers in Southeast Asia, with an approximately 8.6% market share. Brands like Hisense and TCL are also aggressively increasing production and expanding their market presence, making Midea likely to face growing competition in overseas markets.Midea’s Overseas Strategy: Focus on High-End Products.Moreover, Midea’s overseas strategy leans toward high-end products. Whether it’s their “OBM (Own Brand) First” strategy or the dual high-end brand strategy of “COLMO + Toshiba,” they are following Chairman Fang Hongbo’s mantra: “No budget cap, we’ll sell the farm if necessary to ensure high-end brand investments.”

However, the growth in the overseas high-end market seems to be slowing. For instance, Haier’s overseas business is also focused on high-end products, with its refrigerators leading in the €2,000 price range in France, priced 1.4 times higher than the industry average. However, in Q1 of 2025, Haier’s revenue in the North American market dropped by 0.3%, and while the European market grew by 12.42%, this was a significant decline from 23.9% growth in 2023.Short-term, this slowdown is likely due to trade barriers and tariff issues. Long-term, it suggests that global consumer behavior may be shifting, with a growing focus on cost-effective products even in traditionally luxury markets. This is evident in the luxury goods sector, where LVMH’s sales in Asia (excluding Japan) dropped by 11% in Q1 of 2025, and Hermes grew only 1.2%. Chanel, in 2024, saw a 28.2% decline in net profit. Bain’s latest report predicts that the global luxury goods market could shrink by 2% to 5% in 2025. Meanwhile, demand for lower-priced goods has surged. Pinduoduo’s cross-border e-commerce platform, Temu, has reached 1 billion downloads in under three years, becoming the second most visited global e-commerce platform after Amazon, driven by their “low-price-first” model.In this context, Midea’s overseas strategy could face significant challenges.B2B Business: Still Far from 50/50 Split with B2C.In the B2B sector, Midea has achieved some success but is still far from its goal of achieving an even split between B2B and B2C revenues. A key characteristic of Midea’s B2B business is its technology-driven approach.

Whether in new energy, smart buildings, or robotics, Midea needs continuous investment in research and technology accumulation to stay ahead. While Midea has ample financial resources, competing with tech companies for technological leadership may still prove challenging.For example, in the robotics sector, although Midea was the first home appliance company to invest in industrial robots domestically, major tech giants like Huawei, Xiaomi, JD, and Tencent have entered the field, reducing Midea’s competitive advantage. Additionally, while Midea’s diversification has been relatively successful, its core home appliance business still accounts for over 60% of its revenue. If Midea shifts too many resources toward B2B and AI fields, it may end up with flaws in product and service quality in its core home appliance business.Midea’s Strength: Agile Response.Midea’s strength lies in its flexibility. While Gree is still engaged in channel reform and battling with distributors, Midea has already swiftly adapted, launching the “Factory – Direct Sales Store – Consumer” model to significantly reduce channel costs. Midea is quick to respond to market changes and can pivot rapidly. However, Midea also faces a potential weakness: “too much, but not precise enough.” For instance, Midea’s total workforce exceeds the combined total of Haier and Gree, yet its revenue is only 86% of their combined total. The price of scale is inefficiency. In this situation, Midea may need to slow down and find a balance between scalability and lean efficiency.