The Shifting Dynamics Among China’s Home Appliance Titans
The competitive landscape of China’s home appliance industry has undergone significant changes in recent years, with three giants dominating the A-share market: Midea Group, Haier Smart Home, and Gree Electric Appliances. The latest financial reports for the first half of 2025 reveal a clear divergence in performance and strategic direction among these industry leaders, with Midea emerging as the frontrunner, Haier maintaining a solid middle position, and Gree showing signs of falling behind in this intensely competitive market.
The home appliance sector has long been a cornerstone of China’s manufacturing prowess, representing the country’s technological advancement and global competitiveness. These three companies have historically driven innovation, set industry standards, and expanded China’s presence in international markets. However, recent financial results indicate that not all players are navigating the current economic environment with equal success.
Key Performance Highlights
– Midea Group reported impressive growth with revenues reaching 251.124 billion yuan, a 15.58% year-over-year increase
– Haier Smart Home achieved steady growth with revenues of 156.494 billion yuan, representing a 10.22% increase
– Gree Electric experienced a 2.46% decline in revenue, dropping to 97.325 billion yuan
– Profitability metrics showed similar divergence, with Midea’s net profit growing by 25.04% while Gree managed only a 1.95% increase
Financial Performance Analysis
The first half of 2025 financial results paint a clear picture of the changing fortunes among China’s home appliance giants. Midea Group has demonstrated remarkable resilience and growth capability, reporting revenues of 251.124 billion yuan, representing a robust 15.58% year-over-year increase. More impressively, the company’s net profit attributable to shareholders surged by 25.04% to reach 26.014 billion yuan, indicating not just top-line growth but significant improvements in operational efficiency and profitability.
Haier Smart Home maintained a solid performance with revenues of 156.494 billion yuan, achieving a respectable 10.22% growth rate. The company has consistently demonstrated its ability to navigate market challenges while pursuing its strategic objectives. While not matching Midea’s explosive growth, Haier’s performance reflects disciplined execution and steady progress in both domestic and international markets.
Gree Electric, once considered the industry leader, reported disappointing results with revenues declining by 2.46% to 97.325 billion yuan. The company’s net profit showed minimal growth at 1.95%, reaching 14.412 billion yuan. This performance gap becomes even more concerning when considering Gree’s historical position as the industry benchmark and its previous reputation for consistent dividend payments, which it has now suspended.
Dividend Policy Divergence
The three companies demonstrated significantly different approaches to shareholder returns through their dividend policies. Midea Group announced an interim dividend totaling 3.798 billion yuan, while Haier Smart Home planned to distribute 2.507 billion yuan to shareholders. In contrast, Gree Electric made the surprising announcement that it would not distribute any cash dividends, issue bonus shares, or convert capital reserve into share capital, marking a departure from its historical position as a reliable dividend payer.
Core Business Performance Comparison
Analyzing the core home appliance business performance reveals even starker differences among the three giants. While all three companies have expanded into various sectors, their home appliance divisions remain the primary revenue drivers and key indicators of market competitiveness.
Midea’s smart home business generated revenue of 167.201 billion yuan, growing by 13.31% and accounting for 66.58% of total revenue. This performance demonstrates the company’s successful execution of its smart home strategy and its ability to capture value in the evolving consumer electronics market.
Haier Smart Home, true to its name, maintained strong performance in its core business, though specific growth rates for its home appliance division weren’t separately detailed in the report. The company’s overall revenue growth of 10.22% suggests solid performance across its business segments.
Gree Electric’s consumer appliance business experienced a 5.09% decline, generating revenue of 76.279 billion yuan. This segment still represents 78.38% of the company’s total revenue, making this decline particularly significant for overall performance. The drop in Gree’s core business revenue stands in sharp contrast to the growth achieved by both Midea and Haier, highlighting competitive challenges in their traditional strength areas.
Market Context and Industry Trends
The domestic air conditioning market, traditionally Gree’s stronghold, actually showed positive trends during this period. According to data from AVC (奥维云网), China’s air conditioning market retail sales grew by 12.4% to reach 126.3 billion yuan in the first half of 2025. This growth was driven by three main factors: policy support benefits, intense price competition, and favorable weather conditions that boosted demand.
This positive market context makes Gree’s declining performance even more concerning, suggesting the company is losing market share to competitors rather than suffering from overall market conditions. The fact that both Midea and Haier achieved double-digit growth in their smart home businesses indicates they are successfully capturing market share and benefiting from industry tailwinds.
Overseas Expansion Strategies
International markets have emerged as a crucial battleground for China’s home appliance giants, with all three companies reporting strong overseas performance despite their differing domestic results. The overseas expansion strategies and execution capabilities have become key differentiators in their overall competitive positioning.
Midea Group demonstrated particularly strong overseas performance, with international revenue reaching 107.193 billion yuan, representing 42.69% of total revenue and growing by 17.70% year-over-year. The company’s aggressive overseas expansion strategy appears to be paying significant dividends, contributing substantially to its overall growth momentum.
Haier Smart Home reported overseas revenue of 79.079 billion yuan, accounting for an impressive 50.53% of total revenue with 11.70% growth. Haier’s higher proportion of overseas revenue reflects its longer history and more established presence in international markets, particularly through its acquisition and integration of foreign brands like GE Appliances.
Gree Electric generated 16.335 billion yuan from overseas markets, representing 16.78% of total revenue with 10.19% growth. While showing positive growth, Gree’s relatively smaller international presence and lower growth rate compared to its competitors suggest less effective overseas strategy execution.
Strategic Approaches to International Markets
All three companies emphasized their commitment to independent innovation and own-brand strategy in overseas markets. Haier attributed its improved gross profit margin to cost optimization in domestic markets and its premium brand strategy in international markets. The company also highlighted its efforts to strengthen global supply chain coordination and optimize manufacturing efficiency.
Haier’s management projected that developed markets would focus on quality improvement while emerging markets would continue to expand, benefiting from urbanization, demographic dividends, and consumption upgrades. The company anticipates significant growth in smart and green appliance demand in these emerging markets.
Midea Group plans to actively pursue market share growth in international markets, adhering to its OBM (Original Brand Manufacturing) priority strategy while increasing resource allocation to explore new markets. According to Midea Board Secretary Gao Shu (高书), the company’s consumer-facing business future lies primarily in overseas markets, particularly through its OBM operations.
Despite current success, Chinese companies still have significant room for growth in global markets. Midea currently holds only about 5% of the global white goods market share, competing against established players like Siemens, Electrolux, Whirlpool, LG, and Samsung. Gao Shu expressed confidence that Chinese white goods manufacturers could capture more market share due to their advantages in manufacturing efficiency and R&D investment.
B2B Transformation Initiatives
The diversification into business-to-business (B2B) segments has become another critical differentiator among the three home appliance giants. Both Midea and Gree have been actively pursuing B2B transformation strategies, but with significantly different levels of success and strategic focus.
Midea Group’s commercial and industrial solutions business demonstrated exceptional performance, generating revenue of 64.539 billion yuan with 20.79% growth and accounting for 25.70% of total revenue. This segment has become one of the company’s main growth engines, having exceeded 100 billion yuan in revenue for the first time in 2024.
Gree Electric reported substantial growth in its industrial segments, with intelligent equipment revenue growing by 20.90% and industrial products and green energy板块 revenue increasing by 17.13%. However, the absolute size of these businesses remains significantly smaller than Midea’s B2B operations. Gree’s other business category, which includes various industrial operations, generated revenue of 9.830 billion yuan, accounting for 10.10% of total revenue.
Midea’s Ambitious B2B Strategy
Midea has set an ambitious long-term strategic goal for its commercial and industrial solutions to reach 50% of total revenue. This business currently includes new energy and industrial technology, smart building technology, robotics and automation, and other operations conducted through companies like Hiconics, Clou Electronics, and Wandong Medical.
Board Secretary Gao Shu emphasized the significant development potential in each of Midea’s B2B business segments, noting that few listed companies in the A-share market achieve annual revenues exceeding 100 billion yuan in any segment.
Innovation in Robotics and Automation
Midea has made significant progress in robotics and automation, particularly in humanoid robot development. The company is focusing on overcoming key technical challenges in humanoid robot joint module industrialization, improving motion performance, environmental adaptability, and operational precision.
Xi Wei (奚伟), head of Midea’s Central Research Institute Humanoid Robot Innovation Center and deputy director of the High-end Heavy-duty Robot National Key Laboratory, outlined the company’s approach to developing humanoid robots for specific applications including搬运场景, loading and unloading, screw fastening, terminal insertion, panel assembly, and welding.
The company has already implemented advanced automation in its facilities, with Midea’s washing machine factory in Jingzhou recognized as the industry’s first smart entity factory. The facility features 14 smart entities covering 38 core production business scenarios, including KUKA’s iico collaborative robots, Yutu-AI inspection robots, and humanoid robots named ‘Mei Luo’ that have transitioned from experimental settings to practical factory applications.
Xi Wei also revealed that Midea is developing a next-generation product architecture called ‘super humanoid robots,’ though these remain in laboratory development. He acknowledged current limitations in humanoid robotics, particularly the trade-off between efficiency and versatility in general-purpose robots.
Future Outlook and Strategic Implications
The divergent performances and strategic directions of China’s three home appliance giants have significant implications for their future competitiveness and the overall industry landscape. Several key trends and challenges will likely shape their trajectories in the coming years.
The domestic home appliance market is expected to face intensified competition in the second half of 2025. Despite the continuation of government subsidy policies, AVC predicts only marginal growth in China’s overall home appliance retail scale for 2025. This challenging outlook stems from several factors: demand透支 from 2024 possibly reducing 2025 requirements, potential decreasing consumer interest in government subsidies, and the high baseline established during the second half of 2024 due to policy stimulation.
For Midea, maintaining its current growth momentum will require successful execution of both international expansion and B2B transformation strategies. The company’s goal of achieving 50% of revenue from overseas markets and 50% from commercial and industrial solutions represents an ambitious restructuring of its business portfolio that could significantly enhance its long-term competitiveness and reduce dependence on the cyclical domestic home appliance market.
Haier Smart Home appears to be following a more balanced approach, maintaining strength in both domestic and international markets while leveraging its established global brand portfolio. The company’s focus on premium branding overseas and cost optimization domestically seems well-positioned to navigate market challenges, though it may need to accelerate growth to keep pace with Midea’s expansion.
Gree Electric faces the most significant challenges, needing to address declines in its core business while accelerating its transformation initiatives. The company’s suspension of dividend payments, while concerning to investors, may provide additional capital to fund necessary strategic investments and restructuring efforts. However, Gree will need to demonstrate tangible progress in both stabilizing its traditional business and developing new growth drivers to regain investor confidence and competitive positioning.
Industry Transformation and Global Competition
The Chinese home appliance industry continues to undergo significant transformation, driven by technological innovation, changing consumer preferences, and intensifying global competition. The success of Chinese companies in international markets demonstrates their growing competitiveness against established global players, but also highlights the need for continuous innovation and strategic adaptation.
The emphasis on smart home technologies, energy efficiency, and integrated solutions reflects broader industry trends that are reshaping consumer expectations and competitive dynamics. Companies that can effectively leverage emerging technologies like AI, IoT, and robotics while maintaining cost competitiveness and brand strength will likely emerge as long-term winners.
As the competitive landscape continues to evolve, investors and industry observers should monitor several key indicators: progress in overseas market expansion, success in B2B transformation initiatives, innovation in smart home technologies, and ability to maintain profitability amid intense competition. The divergent performances of Midea, Haier, and Gree provide valuable insights into which strategies and capabilities are proving most effective in navigating current market challenges.
The coming years will likely see further consolidation and strategic realignment within the industry, with these three giants continuing to play pivotal roles in shaping its development. Their ability to adapt to changing market conditions, leverage technological advancements, and execute effective strategic initiatives will determine not only their individual fortunes but also China’s position in the global home appliance industry.
For investors and industry professionals seeking to understand the dynamics of China’s home appliance sector, closely monitoring the strategic moves and performance metrics of these three companies provides invaluable insights into industry trends, competitive strategies, and investment opportunities. The dramatic divergence in their recent performances serves as a powerful reminder that even within established industries, competitive positions can shift rapidly based on strategic execution and adaptability to changing market conditions.