Trade-in policy for consumer goods, effective subsidies and efforts to stimulate consumer enthusiasm

Our reporter Mao Yirong

On September 16th, when Ms. Chen bought a notebook computer in JD.COM, she found that using an old mobile phone to participate in the "trade-in" activity could be deducted at a discount of 1,800 yuan. Together with the government subsidy of 2,000 yuan received by real-name authentication on the "Jingtong" applet, the old mobile phone was discounted and enjoyed additional subsidies, saving a total of 3,800 yuan when placing an order.

This is a microcosm of local consumers’ participation in the trade-in subsidy policy. Recently, the trade-in policies for consumer goods in various places have been continuously optimized and expanded. Since September alone, Tianjin, Shenzhen, Shanghai and other places have introduced supplementary measures or detailed rules for the implementation of trade-in of consumer goods.

Hu Yu, deputy secretary-general of Henan Business Economics Association, said that since the second half of this year, the trade-in policy has been supported in a wider scope and with greater strength, and more and more market participants, especially enterprises, have participated in the trade-in, which will help to further release the consumption potential and give play to the pulling role of consumption in economic development, and will also enhance the cost performance of goods and allow consumers to enjoy tangible benefits.

The effect of policy landing has appeared one after another.

In the recently released "Several Measures on Strengthening Support for Large-scale Equipment Renewal and Consumer Goods Trade-in", it is clearly stated that "the extra-long special national debt fund of about 300 billion yuan will be arranged as a whole, and efforts will be made to support large-scale equipment renewal and consumer goods trade-in", and many places will actively carry out actions to strengthen support for trade-in.

Judging from the effect of policy implementation, 300 billion yuan of ultra-long-term special national debt is inciting the "double new" trillion-dollar market, further boosting domestic consumption and investment, and the policy effect is gradually emerging. According to the statistics of Automobile Dealers Association, the retail volume of new energy vehicles increased by 43.2% in August. Statistics from the National Bureau of Statistics show that the retail sales of communication equipment, household appliances and audio-visual equipment increased by 14.8% and 3.4% respectively in August.

"From the perspective of consumption, consumption has continued to recover this year. Development-oriented and enjoyment-oriented consumption such as service consumption and upgraded commodity consumption has grown rapidly, holiday travel has played an obvious role, and cultural tourism consumption has been active. At the same time, the effect of the trade-in policy for consumer goods has gradually emerged." Liu Aihua, spokesman of the National Bureau of Statistics, said at the press conference of the State Council Office on September 14th.

From the local level, the effect of the old-for-new policy is gradually emerging. Taking Henan as an example, since the implementation of the "two new" work for five months, the policy effect has initially appeared. On September 10th, Ma Jian, director of the Henan Provincial Development and Reform Commission, said that in the first seven months of this year, the total retail sales of social consumer goods in Henan Province increased by 5.6%, 2.1 percentage points higher than the national growth rate. More than 60,000 cars were scrapped and updated, ranking first in the country, and more than 190,000 home appliances were replaced with old ones.

All localities have also defined their goals in the implementation plan of trade-in. For example, the Implementation Plan of Shenzhen Extra-Long-term Special National Debt Fund to Support the Trade-in of Consumer Goods issued on September 5 mentioned that by the end of 2024, about 70,000 vehicles will be exchanged for new ones (including 60,000 replacement vehicles and 10,000 scrapped vehicles), about 1 million household appliances will be sold, about 51,000 home improvement products will be replaced, about 250,000 electric bicycles will be updated, and about 1,300 operating trucks and city buses will be updated.

The team of participating businesses continues to grow.

Since the second half of the year, the trade-in policy has been strengthened, and more places have introduced detailed policies. For example, on September 14th, the Department of Commerce of Hebei Province and other eight departments issued the Work Plan for Home Improvement in Hebei Province in 2024.

Further, from August to September, all localities actively introduced the old-for-new policy in the home field. Judging from the policy content, the main efforts are to increase the types of subsidized products, improve the subsidy standards for trade-in and expand the scope of trade-in support.

Comparatively speaking, the policies issued by provinces and cities in this round have been further optimized in terms of subsidized product types, subsidies, subsidies methods and application procedures.

In terms of the amount, local policies have specific provisions on the amount, and the subsidy ratio is generally limited to about 15% of the sales price. At the same time, the policy also clarified the specific time of the event, which will last from the beginning to the end of 2024.

In terms of commodity categories, the policy is more clear about the scope of subsidies and the categories of commodities that can participate in subsidy activities. Generally, one-time subsidies are adopted, which further stimulate consumers’ enthusiasm for participation.

In this context, merchants, manufacturers, distributors and so on have joined the trade-in team. In Shanghai, Red Star Macalline started the trade-in activity of aging products, and will open the aging product experience center.

On September 15th, in Shenzhen Huaqiang North, Xiaomi, Huawei and other offline stores, many consumers lined up to consult the trade-in subsidy activities. According to the salesperson, in addition to government subsidies, the store also launched holiday promotions, which is more cost-effective for consumers to buy products at present.

During the Mid-Autumn Festival holiday, the reporter saw in Weilaimen, a shopping mall in Fengtai District, Beijing, that a salesperson was introducing the latest subsidy policy to consumers. "The" Detailed Rules for the Implementation of Beijing Automobile Trade-in Subsidy in 2024 "proposes that the subsidy for scrapping qualified old cars and buying new energy passenger cars will be increased from 10,000 yuan to 20,000 yuan, which is really good for consumers. In September, the number of test drives and the number of car purchases have also increased." The store sales manager said.

"Recently, the trade-in support policy has been significantly increased. Among them, subsidies for automobiles and home appliances have nearly doubled, and the scope of support has also been broadened. Electric bicycles and home improvement kitchens and bathrooms have been included in the scope of subsidies." Wang Qing, chief macro analyst of Oriental Jincheng, told the Securities Daily that some provinces, in particular, have added "optional actions" in their implementation plans according to the characteristics of local industries to further broaden the scope of subsidies. In addition, some manufacturers will also take advantage of the situation to promote sales, thus forming a cumulative effect and amplifying the real money and silver preferential margin for consumers.

For the next step, how to continuously optimize the subsidy policy and further stimulate the enthusiasm of consumers to participate in trade-in, respondents believe that efforts can be made from the perspectives of expanding coverage, improving service quality and strengthening supervision. On the one hand, on the existing basis, further expand the coverage of the trade-in policy, such as adding more types of consumer goods and expanding the number of participating enterprises; On the other hand, we should strengthen the supervision of trade-in activities, ensure that preferential policies reach consumers directly, and prevent illegal acts such as cheating and defrauding subsidy funds.