On April 12, the Ministry of Commerce and 14 other departments jointly issued the "Action Plan for Promoting the Trade-in of Consumer Goods" (hereinafter referred to as the "Action Plan") to organize the trade-in of automobiles and home appliances and the "renewal" of home decoration, kitchen and bathroom nationwide.
On March 16, 2024, at the scene of the home appliance trade-in community event held in Qingzhou City, Shandong Province, consumers were consulting preferential subsidy information. Visual China data map
The Action Plan proposes to further increase the market share of high-efficiency and energy-saving household appliances by 2025 by increasing policy guidance and support, increasing the recycling volume of waste household appliances by 15% compared with 2023, and increasing the recycling volume of waste household appliances by 30% by 2027 compared with 2023.
It can be seen from the action plan that this round of home appliance trade-in focuses on "intelligence" and "energy saving", and emphasizes the need to improve the recycling network of waste household appliances.
Shanghai has taken the lead in implementing the Action Plan. According to the Shanghai Municipal Commission of Commerce, from March 30 to December 31, 2024, the subsidy policy to promote the consumption of green smart home appliances will be implemented. Individual consumers who purchase a number of eligible subsidized products in the stores of participating enterprises will enjoy a one-time subsidy of 10% of the transaction price after excluding all discounts, and the subsidy amount shall not exceed 1,000 yuan.
All major appliance companies have begun to fully participate in the trade-in policy. Midea said that the company's full range of home appliance brands will participate in the trade-in action. Haier said that it is launching the "New Season for a Better Life", investing 1 billion yuan in special subsidy resources, with a maximum subsidy of 1,000 yuan for single product replacement, and it can also be superimposed with local government replacement consumption subsidies, up to 15%-20%.
Category expansion, precise investment in "intelligence" and "energy saving"
Han Jianhua, secretary of the Party branch of Shanghai Jiaodian Household Appliances Business Industry Association, said in an interview with the surging news reporter that the central government mainly encourages local governments and enterprises to subsidize consumers, and the central government may also have some subsidies in the recycling of old household appliances, and the details are yet to be clarified.
Han Jianhua took the specific implementation of Shanghai's trade-in as an example, and the types of household appliances enjoying policy subsidies have been doubled from 8 to 16, including small household appliances and other products. Secondly, this subsidy is precisely tilted towards smart home appliances and products with high energy efficiency levels.
From the perspective of Shanghai's trade-in plan, this year's subsidized product categories have been upgraded from the original air conditioner (including central air conditioning), refrigerator (including freezer), washing machine (including dryer), TV, water heater (including wall-hung boiler), range hood, gas stove (including integrated stove), dishwasher, etc. 8 categories to 16 categories, microcomputers (including desktop and portable computers), printers, air purifiers, rice cookers, microwave ovens (including all-in-one machines), induction cookers, Categories such as electric fans and water purifiers have entered the list of green smart home appliance consumption subsidies in Shanghai for the first time.
On April 12, Midea Group also said that the company's full range of home appliance brands will participate in the trade-in action, and provide consumers with greater discounts through their own concessions and government support. Among them, Midea provides Foshan consumers with trade-in and green home appliance subsidy policies, covering five categories such as air conditioners, refrigerators, washing machines, kitchen and bathroom appliances, with a maximum subsidy of 1,000 yuan for a single unit.
Haier Group is launching the "New Season for a Better Life", creating an exclusive IP "Green Carbon Plan" and implementing the "trade-in" action plan. Haier has invested 1 billion yuan in special replacement subsidy resources, with a maximum subsidy of 1,000 yuan for single product replacement, which can also be superimposed with local government replacement consumption subsidies, up to 15%-20%.
Han Jianhua said that now is the stock of the market, the need to activate consumers' enthusiasm for purchase, improve the quality of life of consumers, coupled with product technology updates, all kinds of intelligent products more, so the trade-in subsidy is mainly tilted towards intelligent and energy-saving products.
Improve the recycling network of waste household appliances
The action plan also focuses on improving the recycling network of waste household appliances, cultivating a number of typical cities and enterprises for recycling waste household appliances and other recycled materials, and developing new models such as "Internet + door-to-door recycling" and "one-car storage".
Han Jianhua said that the background of this trade-in is that there are already a large number of home appliances in the domestic market that have been in service for an extended period of time, and how to recycle these home appliances for new ones is also a very complicated matter.
"The labor cost of recycling is huge, and the site needs to be stacked back for recycling, and the subsidy policy has yet to be clarified. Han Jianhua said.
According to statistics, in 2023, the number of major categories of household appliances in mainland China will exceed 3 billion units, and the life cycle of household appliances is generally 8-10 years, and a considerable number of them have been "overdue for service".
This time, major appliance companies also attach great importance to the recycling of old household appliances and have introduced a series of measures. Midea Group said that it will fulfill the responsibility of "the first batch of household appliance manufacturers in the country to carry out the responsibility system for recycling targets" and do a good job in the green recycling of waste household appliances. The company will build a green-led full-chain trade-in guarantee system, interconnect and co-create with the government's digital platform, industry recycling system, and dismantling enterprises, realize the mechanism of tracking and tracing the whole process, and ensure the smooth and controllable flow of each link.
At present, Midea's green recycling system has authorized more than 5,000 green recycling outlets, of which 2,200 have the integrated service capability of "sending, dismantling, installing and recycling", and a total of 3.098 million waste household appliances will be recycled in 2023 to realize the reuse of resources and promote energy conservation, emission reduction and the development of a green circular economy.
Haier Group said that through the digital platform, users can realize the whole process of one-stop services such as valuation→ coupon collection→ order placement→ verification → sending new → demolition→ recycling → dismantling.
How much of the consumer market can be driven by the trade-in of household appliances in this round?
Due to the relatively weak home appliance market, the industry is looking forward to the trade-in market. Judging from the effect of trade-in in Shanghai, consumers are more enthusiastic about participating.
"The total subsidy in Shanghai this year is 150 million yuan, and nearly 20 million yuan has been used up in the first two weeks, so it may be used up in May. Compared with the previous trade-in, this time the enthusiasm of consumers to participate has increased significantly. Han Jianhua said.
Han Jianhua said that the home appliance industry is a long-chain industry, the trade-in policy is wide-ranging, the downstream can reuse resources, the midstream can stimulate new market increments, revitalize the stock, and the upstream forces enterprises to develop intelligent and green products that are more in line with the needs of the people.
CITIC Securities believes that the trade-in policy of consumer goods is expected to further promote consumption repair, promote the economy to cross the inventory cycle faster, and stimulate the high-quality development of the supply side from the demand side.
Judging from the previous household appliances and the effect of replacement, it also has a good pull on the entire industry. According to the data of the Ministry of Commerce, from 2009 to 2011, the central government has allocated about 30 billion yuan of subsidy funds for the trade-in of household appliances to various localities, and the "trade-in" of household appliances nationwide has sold 92.48 million new household appliances in five categories, driving direct consumption of more than 342 billion yuan.
According to the calculation of the macro group of the research department of CITIC Securities, it is expected that a new round of trade-in policy is expected to drive the domestic sales of household appliances to increase by about 13% year-on-year. Terminal consumer goods and industrial chain parts enterprises are expected to fully benefit.
CITIC Securities said in this report that a new round of large-scale equipment renewal policies has been introduced to promote the release of demand in the home appliance manufacturing industry. Catalyzed by product upgrading and policies, manufacturers of terminal consumer goods, parts and equipment in the industrial chain are expected to benefit greatly, and emerging intelligent manufacturing is expected to accelerate the benefits in the process of improving the quality and efficiency of the industry.
Source: The Paper