A high-stakes public feud has erupted between two of China’s home appliance titans, Gree Electric and Hisense, centered on a debate over raw materials that reveals the intensifying pressure within the world’s largest air conditioning market. The conflict began when Gree’s Chief Marketing Officer, Zhu Lei, accused Hisense of plagiarizing the slogan 'Authentic Copper, Real Material'—a phrase Gree claims as its own intellectual property. The rhetoric quickly escalated from branding disputes to technical accusations, with Gree suggesting that any manufacturer using aluminum wiring in motor windings has no right to claim copper-based quality.
Hisense responded with a aggressive counter-campaign, releasing internal documents that allegedly show Gree’s own research into 'copper-to-aluminum' substitution. To further challenge Gree’s stance, Hisense publicized a teardown video of a Gree unit that reportedly utilized aluminum components, mocking Gree’s purity claims. Gree countered by stating the unit in question was a discontinued, small-batch specialized model, maintaining that all its current consumer-facing products utilize 100% pure copper to ensure superior cooling efficiency and longevity.
Underpinning this 'copper-gate' is a brutal economic reality: the surging cost of raw materials. In 2024, copper prices transitioned from 70,000 RMB per ton to over 100,000 RMB per ton on the futures market, with spot prices even higher. Given that copper accounts for 20% to 30% of an air conditioner’s total cost, manufacturers are facing a significant squeeze on margins. While aluminum is a viable, cheaper alternative—trading at less than 30,000 RMB per ton—the industry remains hesitant to adopt it fully due to consumer perception and technical maturity.
The strategic timing of this conflict is no coincidence. The Chinese air conditioning market has reached a point of saturation where volume growth is stagnant, and incumbents are fighting for market share. Gree, once the undisputed leader, has slipped to the second position behind Midea, while the tech giant Xiaomi is rapidly closing the gap from third place. By aggressively defending the 'all-copper' standard, Gree is attempting to exert 'discourse power,' forcing its competitors to either follow its expensive material standards or risk being branded as manufacturers of inferior goods.
Ultimately, this war of words serves as a defensive wall for traditional premium brands. While the actual cost difference for the copper in a standard unit is a mere 5 RMB, it supports a retail price premium of nearly 500 RMB. As long as Gree can maintain the narrative that copper equals quality, it can justify its higher price points. However, with China relying on imports for over 70% of its copper ore while maintaining high self-sufficiency in aluminum, the industry may eventually be forced toward the very 'aluminum-for-copper' transition that Gree is currently fighting to stigmatize.