On July 29, 2020, Midea Group's share price rose 6.7% to close at 71.63 yuan, and its market value stood above 500 billion for the first time, exceeding the combined market value of Gree Electric Appliances and Haier Smart Home. At this time, it has been less than two years since He Xiangjian, the founder of Midea, proposed a market value of 500 billion yuan in October 2018. What happened to Midea in the past two years? Can this change support Midea into a broader future?
From "digital beauty" in 2019 to "full digitalization and intelligence" in 2020, Midea is moving from the world's largest white goods manufacturer to a "data-driven technology innovation group". In 2020, the epidemic boosted the second transformation of Midea, and Zhang Xiaoyi, vice president and CIO of Midea Group, revealed at the "Into the United States" media open day on July 28 that Midea will invest more than 2 billion yuan in digital and intelligent construction in 2020.
Zhang Xiaoyi, Vice President and CIO of Midea Group and President of IoT Business Unit
Users are online, operations are online, data is online, from now on, all companies can and must be Internet companies, which is the background of Midea's "two comprehensive" transformation. Midea is laying out for the next five to ten years, and digitalization and intelligence are important means and tools. By building three major platforms, namely IoT ecology, Meiyun sales and industrial Internet, Midea tries to reconstruct the relationship between users and customers and complete the closed loop of data. Zhang Xiaoyi said that Midea hopes to develop 100 million smart home users in three years and build its own ecosystem. By 2022, Midea will become a data-driven technology company, an internet company with the power of a platform.
1. User experience first
Midea is already the largest intelligent platform in the white goods industry, with a total of nearly 25 million connected devices and more than 55 million users. Midea's goal is to reach 100 million households, which means that the number of users must reach at least 200 million, more than three times the current number. Zhang Xiaoyi said that Midea should be the first comprehensive experience from purchase, use, interaction to service, which is the key to winning users.
Users don't need remote controls, but creative new experiences, which requires smart hardware and software to create value from data. For example, the intelligent sleep curve of Midea air conditioner can automatically adjust the best body temperature to allow users to sleep soundly, and Midea's smart smoke machine can automatically sense the fire power and adjust the wind speed, so that users do not need to manually adjust. More space comes from content empowerment, Midea smart stoves, cooking robots, ovens and microwave ovens and many home appliances have built-in recipes, which teach you how to cook through the touch screen, allowing users to cook with one click.
Zhang Xiaoyi said that Midea's recipes are different from other recipes on the Internet, "We plot temperature and nutrition into cooking curves, and provide users with data-backed and personalized healthy cooking solutions." Chinese food is accustomed to stir-frying, and most edible oils begin to precipitate harmful substances when heated to more than 200 degrees, Midea smart stove can record the temperature of each stir-fry, push home cooking health reports for users, and help you fry dishes healthier, which is "software empowers hardware". Midea is expanding intelligence to more categories,2020year,Midea launched the first sweeping robot equipped with LDS lidar navigationM7,It can automatically establish maps、Plan routes、Partition cleaning,M7The launch of Midea allows Midea to compete with leading brands in the industry。
Intelligent Midea hopes to win users with more categories, more convenient controls and richer content. According to Feng Feifei, an expert in AI technology architecture at Midea Group's Intelligent Innovation Center, the intelligent coverage rate of Midea's products has reached 63%, supporting multiple functions such as automatic message push, visual perception, and active service. As of June, Midea Mercure has launched 182 smart scenes, which can be opened with a touch of an NFC tag on the mobile phone. The IoT business unit has built a smart life experience store near the headquarters of Shunde Midea, using scene-based display combined with cloud shelves, so that engineers and product managers have a position to interact with users.
Voice is the next entrance with more potential than mobile phone APP, Midea's IoT division has developed two smart speakers, and new speakers with screens will also be launched soon. According to Feng Feifei, the price of the third-generation intelligent voice module independently developed by Midea has been reduced from 75 yuan to 50 yuan, further lowering the threshold for intelligent voice. For products that are difficult to embed microphones, distributed voice can be used to realize voice control of home appliances through smart panels. There are also smart door locks, lighting, switches and panels that Midea is responsible for, Midea has separated the new business with small volume and great potential from the group, and forced development with fierce market competition.
2. Accelerate the construction of an ecosystem
In the era when traffic is king, Midea, which has hundreds of millions of sales, has become an important partner of Internet giants, and Midea is also building its own Mercure platform to attract more third parties to join. At the end of July, Midea and Huawei announced a strategic cooperation upgrade, Midea's M-Smart system and Huawei's Hi-link system are connected to the bottom layer, Huawei mobile phone users can automatically discover, one-click configuration of Midea's smart products, Midea and Huawei are also in 5G industrial Internet, smart screen, enterprise cloud and other aspects of cooperation. When openness and cooperation become the norm, the biggest test is whether you can jointly create new value points based on scenarios, rather than just simple access and control.
In addition to Huawei, Midea's partners also include Tencent, Baidu, Amazon, China Telecom, mobile phone manufacturers OPPO, VIVO, and BYD cooperate with the Internet of Vehicles, and Skyworth cooperates to connect to the TV screen, the content side has Himalaya, QQ Music, intelligent voice solution provider Spire and the whole house smart home brand Ruibo have also accessed the Midea platform. Han Han, head of Internet brand and ecology of the IoT Division, said that Midea provides partners with the most cost-effective smart modules in the industry, with Bluetooth modules priced at 5.99 yuan, WiFI modules priced at 7.99 yuan, and Bluetooth + WiFI version priced at 9.4 yuan.
Midea is also extending upstream and downstream to jointly expand the ecosystem. At the end of July, Midea's washing machine division reached a cooperation with Unilever to customize detergent for Midea's washing machines. Unilever products will also be stationed in Midea Mall, providing exclusive preferential prices for Midea users, and when the washing machine reminds that the laundry detergent is insufficient, users can place an order through Midea Mercure with one click. Midea can also cooperate with food and fresh food distribution companies to find more opportunities in operation users.
3. Digitalization improves operational efficiency
Intelligence has allowed Midea to find a new dimension of product differentiation, and through digital construction, Midea has been able to continuously improve operating efficiency and profitability, which is the basis for Midea's large-scale investment in transformation. Since 2012, Midea has not built a new factory in China, and the compound growth rate of the company's revenue has reached 12.7% and the compound growth rate of net profit attributable to the parent company has reached 18.7% within seven years.
The product may be imitated, but it is difficult to imitate a set of business models composed of smart factories, T+3, inventory and Meiyun sales. In 2020, Midea accelerated the promotion of 5G+ industrial Internet applications on the manufacturing side, and at present, Midea has four 5G smart factories in Guangzhou, Shunde, Wuxi, and Shunde, which have obtained national certification, and the 5G network with high reliability, low latency, and massive connection has opened up a broader space for the industrial Internet.
In Midea's microwave oven magnetron factory, Midea, Huawei, and China Telecom have jointly deployed 5G industrial Internet, and 11 5G application scenarios such as machine vision quality inspection, AGV application, and AI quality inspection have been implemented, which will be fully promoted in all factories in the future. Midea's industrial Internet has been productized and promoted to enterprise users through Meiyun Zhishu, which has developed more than 200 customers in more than 40 industries, and its products cover multiple fields of intelligent manufacturing, big data, and digital marketing.
Midea's new retail construction played a huge role in the epidemic in 2020, and the company's online sales increased by 11.7% year-on-year to 13.5 billion yuan in the first quarter, accounting for 46% of domestic revenue. Wu Haiquan, president of Midea China, said that it is expected that the annual online retail sales in 2020 will be about 70 billion yuan, and online sales will account for nearly 50%. Midea is also continuing to promote the integration of offline and online, Zhang Xiaoyi said that in 2020, Midea will integrate logistics capabilities, business capabilities, customer service capabilities, and financial capabilities into Meiyun sales, from dealers to shopping guides, customer service, and engineers, all online, and promote offline stores to go online. Build a Midea mall, use a good Midea home applet, and create its own traffic pool.
Midea's live broadcast room of life appliances
With the help of the popular live broadcast, Midea was able to make up for the shortcomings of the online experience and visualize the interactive data. Midea's Life Appliances Division has allocated 900 square meters to build 20 live broadcast rooms, and there are live broadcasts almost every day, and it is expected that the live broadcast sales will be 7-8 billion in 2020, and only 100 million in 2019. In the second half of the year, Midea will launch a variety of new products, jumping out of the past in terms of appearance, function and form, so that users can see a new beauty.
The three-day "Into Midea" in 2020 was the longest media open day in the past, but it is still difficult to grasp the full picture of Midea Group's transformation. The times have changed beyond anyone's expectations, and every industry and every company is on the road to transformation. Midea Group has stood at a new starting point, and how much space for the future depends on the strength and depth of this change.
Reference source: Zhuge Apu public account https://mp.weixin.qq.com/s/OVFt2loepE04pPJVkVisdA