A technical dispute over the 'vacuuming' process in air conditioner installation has reignited the long-standing rivalry between Gree Electric and Xiaomi. On July 3, Shan Lianyu, General Manager of Xiaomi’s Major Home Appliances Department, issued a public rebuttal to criticisms from Gree executives. The spat underscores a deeper structural shift in China's white goods sector, where a nimble tech challenger is increasingly threatening the market share of a traditional manufacturing titan.
The conflict centers on 'digital vacuuming,' a service Xiaomi launched to allow customers to monitor the installation process via AI and mobile apps. Gree’s Chief Marketing Officer, Zhu Lei, dismissed the innovation as a marketing gimmick, arguing that adhering to national standards is more critical than digital monitoring. Xiaomi countered by stating that transparency is what modern consumers demand, signaling a move away from the 'black box' installation practices of the past.
Warranty policies have become the second major battlefield in this corporate cold war. After years of Gree positioning its 10-year free repair policy as a unique mark of quality, Xiaomi has neutralized this advantage by matching the 10-year commitment across its entire AC lineup. This move forced Gree executives to shift their rhetoric, questioning whether newcomers have the financial or technical 'staying power' to honor such long-term promises.
Financial data reflects the high stakes of these verbal volleys. In 2025, Xiaomi’s AC shipments surged over 24% to 8.5 million units, while Gree’s consumer appliance revenue contracted by over 10%. However, the first quarter of 2026 saw a tactical reversal; Gree reported a modest 3% growth in revenue and profit, whereas Xiaomi’s IoT and lifestyle segment saw a significant revenue drop as the domestic market reached a saturation point.
With domestic sales cooling across the board, both companies are now casting their eyes toward international markets. The recent success of Midea in Europe, where specialized split-unit ACs are fetching premium prices during heatwaves, has served as a wake-up call. Gree’s leadership has admitted to recent export failures and promised a 'radical transformation' of their overseas sales model to keep pace with global demand.