Gree Electric's Dong Mingzhu: why China's leading businesswoman doesn't do holidays

Tue Dec 22 11:06:06 CST 2015 Source: The Telegraph Collect Reading Volume: 1102
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Dong Mingzhu is one of China's leading businesswomen and runs Gree Electric Appliances. Peter Foster visits Zhuhai to meet the woman who says she has barely taken a day off in 20 years.

 

As you might expect from the world's largest maker of home airconditioners, the headquarters of China's state-owned Gree Electric Appliances are cool enough for the vice-chairman and president to need a light cardigan draped across her shoulders.

 

And as Dong Mingzhu sweeps into the conference room at Gree's massive complex in the Pearl River Delta city of Zhuhai, the temperature in the room drops another couple of degrees, her face a mask of frosty intent. "Sister Dong", as her employees deferentially refer to their elegant 54-year-old boss, did not rise from the position of humble sales agent to the operational helm of one of China's most successful state enterprises through smalltalk - and she evidently isn't about to start now.

 

When Ms Dong arrived in Zhuhai in 1990 Gree was a local company with annual sales totalling a little over £10m. In 2008 sales topped £3.5bn, accounting for more than 40pc of all air-conditioners sold in China, with average annual growth since 2005 exceeding 30pc.

 

It is a transformation that has made Ms Dong, the youngest of seven children born into a working family in Nanjing, one of the leading icons of China's economic revolution.

But her success has not come without sacrifice. When her husband died of an illness she left her three-year-old son with his grandmother in Nanjing while she focused on building up Gree.

 

Parental visits only came when business brought her back to China's former southern capital. "I have not taken a day off in almost 20 years," she said when asked about her last holiday destination.

 

And when, aged 12, her son came to visit her in Zhuhai, on China's south coast, she refused to give him a lift to the airport because she was too busy, and forbade anyone else to do so. He had to take the bus.

 

The legends form part of the cult of personality that surrounds Ms Dong. By setting the strictest of personal examples, she has won the unquestioning respect of her 40,000 employees.

 

"She's been through everything herself," says one of her devoted sales managers after outlining Gree's international expansion plans. "We never dare to say that something is impossible in front of her. We must all have her will to succeed."

 

But like the company she runs, which floated on the Shenzhen stockmarket in 1996 but is still classified as state-owned, Ms Dong is a curious hybrid.

 

Twice-elected to China's rubber-stamp parliament, the National People's Congress, she is a loyal government servant. But her salary and share options, which netted her £3.5m last year, also mark her out as one of China's new breed of elite chief executives, someone willing to confront outdated practices.

 

She looks almost insulted, for example, when asked how Gree would benefit from a government-sponsored plan to discount electrical goods in the countryside. The scheme is intended to boost consumption at home at a time when China's export markets are weak and brings luxury items such as fridges, washing machines and air conditioners within the grasp of the country's 800m farmers.

 

"This company can't depend on government orders to stay competitive," she says, carefully glossing over the value of the scheme. "We have to stay in front on quality and service. Many countries have stimulus packages. China is no different."

 

Gree slipped in 2008, its growth slowing to 11pc from 44pc the year before, but Dong says she is not looking for handouts. Nevertheless, new tactics are required. Now that Gree has trumped its domestic rivals, Ms Dong feels it is time to look abroad. The financial crisis is an opportunity to build Gree into a global brand, she says, since she can offer better value to customers around the world who are now watching their wallets.

 

Many will have already been using Gree products without realising it - the company already makes the guts for many leading international brands including GE, Panasonic, Whirlpool and Carrier. Ms Dong now intends to cut out the middleman.

 

"This financial crisis a moment for Gree to reorientate itself," she says. "The crisis is helping the world to better understand China and the Chinese people at a time when Chinese products have been viewed as low-price and low-quality.

 

"It is a golden chance for overseas customers to recognise that they can pay less for the best quality machines."

 

Of course it is hard to predict whether a Chinese company whose name looks like a typographical error in English ("Gree" was invented to convey "joy" (glee), "great" and "green" all at the same time) can make a name for itself in the international marketplace, but Ms Dong has already made a start with factories in Brazil, Pakistan, Vietnam that exclusively manufacture and sell Gree's ownbranded machines. A tie-up with Japanese major Daikin also promises new technologies to improve energy efficiency.

 

It is not clear how Sister Dong's renowned hard-headedness, which brought distributors and sales agents in line and laid the foundation for her domestic success, will translate in her dealings with foreigners.

 

According to another piece of Dong lore, she once refused her own brother a discount when he asked for preferential terms to run a Gree dealership. They didn't speak for many years.

 

Nevertheless, her ambitious target is for Gree to match its performance in China abroad, and capture some 35pc of the overseas market in the next decade, a feat which will require it to almost triple its current overseas sales of 7m units a year.

 

After years of trying, only a handful of Chinese brands have won recognition overseas. Nevertheless it would be wise not to underestimate the ambition, drive - even ruthlessness - of Dong Mingzhu.

 

" It is a golden chance for overseas customers to recognise that they can pay less for the best quality machines "

Editor: sysadmin