This year's tide of exchanging the old for the new is in full swing, which originated from the promulgation of a series of national policies in the beginning of the year
Although the trade-in policy has become a buzzword in various industries since the beginning of 2024, it is not a new thing and has been around for a long time
With the increase in residents' willingness to trade in the old for the new, and the implementation of a new round of policies this year, some brands have taken action
However, it should not be ignored that in the implementation of the trade-in policy, there are some problems that need to be solved urgently
On May 11, the hall of the Huiju Shopping Center in Xihongmen, Beijing, was crowded, and the National Consumer Goods Trade-in Action and the Beijing Consumer Season New Life Festival were grandly launched here. Previously, Anhui, Tianjin and other provinces and cities have issued the "Implementation Plan for the Trade-in Action of Consumer Goods" to promote the development of different forms of trade-in promotional activities through government subsidies, corporate discounts, credit support and other means. JD.com, Midea, Haier, Gree, BYD...... While the brands have taken action and responded positively, they have ushered in new market opportunities.
The New Deal has multiple implications
This year's tide of exchanging the old for the new is in full swing, which originated from the promulgation of a series of national policies in the beginning of the year. What is trade-in? That is, when consumers buy new goods, they will hand over a certain percentage of the discount of the same old goods to the store, so as to promote the trade-in.
On March 1, the executive meeting of the State Council deliberated and approved the "Action Plan for Promoting Large-scale Equipment Renewal and Trade-in of Consumer Goods", which is a major decision made by the CPC Central Committee with a view to the overall situation of high-quality development in the mainland. On April 12, the Ministry of Commerce and 14 other departments issued the "Action Plan for Promoting the Trade-in of Consumer Goods", which clarified the key tasks of trade-in of consumer goods.
The action plan mainly involves three industries: First, the automotive field. Specifically, it is necessary to increase fiscal and financial policy support, and the central finance and local governments should work together to arrange funds to support the scrapping and renewal of automobiles, and encourage qualified localities to support the replacement and renewal of automobiles. At the same time, it is necessary to highlight the standard traction in the automotive field, improve the recycling and dismantling system of scrapped cars, promote the safe and convenient transaction of second-hand cars, cultivate and expand the main body of second-hand car business, and promote the innovation and development of automobile circulation and consumption. The second is the field of household appliances. Specifically, it is necessary to give full play to the guiding role of fiscal and taxation policies, encourage the introduction of measures to benefit the people, improve the recycling network of waste household appliances, increase the cultivation of diversified subjects, strengthen the guidance and support of household appliance standards, promote the comprehensive improvement of after-sales service levels, and develop the circulation of second-hand goods. The third is to promote the "renewal" of home decoration, kitchen and bathroom. It is required to increase support for the people, improve the level of convenient services, cultivate new growth points for home furnishings, and optimize the home market environment.
Li Yongjian, director of the Research Office of the Chinese Academy of Social Sciences' Institute of Financial and Economic Strategy, believes that this year's trade-in policy has the following three characteristics:
The first is to emphasize the linkage between the central and local governments. This round of policy proposes that "for the trade-in of consumer goods, we must adhere to the linkage between the central government and local governments", that is, this round of trade-in policy will give full play to the leverage role of central financial funds on local government policy funds, and realize the linkage between central finance and local governments. It can be expected that this round of trade-in will increase financial support.
The second is to expand the object of trade-in from home appliances and automobiles to consumer durables. The policy proposes to "encourage traditional consumer goods such as automobiles and home appliances to be traded-in, and promote the trade-in of durable consumer goods". Consumer durables account for an increasing proportion of mainland consumer spending, and pushing for their trade-in will bring greater market growth.
The third is to emphasize the support for the ecological construction of the trade-in industry. The policy proposes to strengthen the development of the logistics system and new model of "replacement + recycling", and requires "overall support for all links of the whole chain" in the policy. As a complete industry, trade-in involves many links, and it is necessary to build a good industrial ecology in order to reduce the operating cost of trade-in, so as to better promote trade-in. For the first time, the policy proposes to "coordinate and support all links in the whole chain", which will make the business entities in each link of the trade-in more motivated to engage in trade-in. Moreover, the policy also clearly proposes support for the development of new logistics systems and models, which means that the participating enterprises can innovate more boldly and promote their efficiency.
In this regard, Zhu Di, a researcher at the Institute of Sociology of the Chinese Academy of Social Sciences and director of the Research Office of the Sociology of Consumption and Culture, also said: "A series of policies in 2024 involve the field of production and consumption, and take into account many aspects of production and consumption, including production, consumption, recycling and related standards, and 'implement four major actions: equipment renewal, consumer goods trade-in, recycling and recycling, and standard improvement'." ”
On May 17, 2024, participants took photos by Li Ziheng at the launching ceremony of the National Consumer Goods Trade-in Action - Shandong Station and the 2024 National Home Appliance Consumption Season
This round of policies was introduced at the peak of the replacement period. According to data from the Ministry of Commerce, in 2023, the number of cars in mainland China will be about 340 million, and the number of home appliances in major categories such as refrigerators, washing machines, and air conditioners will exceed 3 billion. Home appliances and automobiles generally have a service life of 8 to 15 years, and they have entered the peak period of replacement. The trend of intelligent home appliances and the new energy trend of automobiles have brought greater demand for upgrading.
It is foreseeable that many companies will actively respond to this peak period of upgrading, eliminate old production lines, increase research and development and innovation of new products, and bring consumers a more comfortable and healthy life experience and more choices. Under the multiple development goals of consumption upgrading, industrial upgrading and circular economy development, trade-in has multiple significance.
Multiple rounds of policies bring benefits
Although the trade-in policy has become a hot word in various industries since the beginning of 2024, it is not a new thing and has been around for a long time in history.
In the second half of 2008, the international financial crisis had a great impact on the mainland's foreign trade and exports. Therefore, in May 2009, the CPC Central Committee and the State Council fully implemented the household appliances to the countryside and the delivery of automobiles and motorcycles to the countryside, while also introducing the policy of exchanging the old for the new to promote consumption through financial subsidies. The central government has allocated 7 billion yuan for the trade-in of old and new automobiles and household appliances from June 1, 2009 to May 31, 2010. According to industry analysts, the trade-in policy in 2009 has multiple purposes: first, to stimulate domestic demand; the second is to promote energy conservation and emission reduction; the third is the effective use of resources; Fourth, it is necessary to stabilize and expand employment. Such a policy is a great benefit to both enterprises and consumers. For enterprises, it can effectively make up for the shrinking market share due to the decline in exports; From the consumer's point of view, selling old cars and household appliances and buying new ones can not only increase revenue and reduce expenditure, but also improve consumption grades, and also save electricity. Therefore, it is very popular in the market.
Before and after the introduction of the policy in 2009, the state also issued some guidance policies or laws and regulations for the trade-in of subdivided industries, such as the "Regulations on the Management of Recycling and Treatment of Waste Electrical and Electronic Products" is to standardize the recycling and treatment activities of waste electrical and electronic products, promote the comprehensive utilization of resources and the development of circular economy, protect the environment, and protect human health. The regulation was adopted at the 23rd executive meeting of the State Council on August 20, 2008 and came into force on January 1, 2011.
At that time, a series of policies achieved real results. On December 1, 2009, the Ministry of Commerce held a press conference to introduce the situation and answer questions from reporters on the rural distribution network, home appliances to the countryside, car trade-in, urban community services, etc. It was announced at the press conference that as of November 24 of that year, a total of 6,990 old cars had been subsidized across the country in 2009, with a subsidy amount of 58.43 million yuan, driving the consumption of new cars by 1 billion yuan.
Li Yongjian found through data survey that during the policy dividend period from 2009 to 2011, the central and local financial subsidies amounted to about 37.5 billion yuan, and the sales of household appliances were 92.48 million units through trade-in, with sales of 342 billion yuan, which is equivalent to 9.1 times the sales scale of household appliances leveraged by financial funds. The sales volume achieved accounted for 20% of the total sales of household appliances during the subsidy period, and the effect was excellent.
In 2019, the central government launched a new round of trade-in activities for home appliances and cars. In January of that year, the National Development and Reform Commission and other ten departments issued the "Implementation Plan for Further Optimizing Supply to Promote Steady Growth of Consumption and Promoting the Formation of a Strong Domestic Market (2019)", proposing to orderly promote the scrapping and renewal of old cars, promote the upgrading of rural vehicles, promote the upgrading of household appliances, and encourage qualified localities to give consumers appropriate subsidies.
Historically, multiple rounds of trade-in policies have brought benefits to brands. Liu Wenjie, vice president of the China Household Appliance Service and Maintenance Association and leader of the new trend working group, said that in 2009, home appliance brands such as Haier, Midea, Gree, and Hisense performed more prominently in the household appliances to the countryside and trade-in activities. According to the search results, from January to November 2009, Haier, Meiling, Hisense, Midea, Whirlpool and Suning and other independent brands achieved a total of more than 2.6 billion yuan in trade-in, accounting for 44%.
In 2009, the demand for LCD TV upgrading exploded, and the consumption stimulus policies such as subsidies for household appliances to the countryside and trade-in promoted the increase in sales scale. Hisense Video vigorously develops LED, smart TV and 3D TV market, and takes the lead in launching the first generation of smart TV in the domestic market.
JAC Motors and other self-owned brand passenger cars have been selling red all the way under the promotion of policies. "At that time, many independent brands and joint venture brands that were not too expensive benefited one after another." Zhou Mi, a researcher at the Academy of International Trade and Economic Cooperation of the Ministry of Commerce, said. The new batch of trade-in policies implemented in 2019 has particularly significantly boosted automobile consumption.
On May 11, 2024, Zhou Zhiyi took the scene of the launching ceremony of the Beijing Station of the National Consumer Goods Trade-in Action and the Beijing Consumer Season New Life Festival
The brand is green and intelligent
Zhu Di said that according to the "2022 China Urban Low-Carbon Consumption Survey" conducted by the research team of the Institute of Sociology of the Chinese Academy of Social Sciences, 64.3% of consumers have had second-hand trading experience, of which 67.8% of the respondents have used online second-hand trading platforms. Books are the most common products that people buy through second-hand consumption, with 27.4% of respondents having purchased books through second-hand transactions. The survey also took the willingness to recycle second-hand electronic products as an example of urban residents, and found that in the context of increasing the recycling price of second-hand electronic products, the proportion of respondents who expressed their willingness to recycle second-hand electronic products was 67%.
With the increase in residents' willingness to trade in the old for the new, as well as the implementation of a new round of policies this year, some corporate brands have taken action. But after all, the trade-in is not simply a policy subsidy, and you can enjoy the concept of a few hundred yuan discount. When consumers buy new products, the highlights they pay the most attention to are the function, intelligence, health and environmental protection of the new products. As the protagonists of the trade-in, major enterprises should start from themselves to promote the implementation of policies. Enterprise brand building should be based on digitalization and intelligence, and promote the implementation of trade-in by means of greening.
First of all, enterprises should actively focus on digital and intelligent transformation. The automobile, home, home appliances and other industries involved in this round of policies have their own industry characteristics, but the unified feature is that the application of digitalization and intelligence is popular. To this end, some platform companies have made efforts to trade in the old for the new. For example, the double subsidy for trade-in of green smart home appliances in Wuhan Jingdong MALL can reach up to 15%, the subsidy for designated models can reach 1,500 yuan, and the maximum subsidy for home appliances is 6,000 yuan.
In response to the hot and humid weather in South China, Haier Smart Home uses a variety of products and smart scenarios to "solve problems" for users. If the washed clothes do not dry for a long time, the smart balcony Casarte twin partition washing and drying machine can not only quickly dry wet clothes, but also moisturize and care for high-end fabrics; In addition, the original MSA oxygen control and preservation technology can also make fruits such as lychees in Guangdong summer achieve the preservation effect of "the world has been 7 days, and the fresh box is like a day......
Secondly, greening is a necessary means for corporate brands to implement trade-in, and it is the "due meaning" of trade-in. Zhou Mi said that the introduction of the trade-in policy is to reduce the adverse impact of economic development on the environment, so enterprises should take green environmental protection as the number one choice for the implementation of trade-in.
For example, NIO has launched a subsidy of up to 1 billion yuan for the replacement of oil vehicles, and oil car users will receive an additional 10,000 yuan of optional fund subsidies for new NIO vehicles; Combined with other benefits, you can get a maximum of 15,000 yuan of optional funds, a NIO Phone voucher worth 6,498 yuan, 36 battery swap coupons worth about 3,600 yuan, and a one-year right to use the global pilot assistance (NOP+) worth 4,560 yuan.
Dongfeng Motor's trade-in action covers its own brands such as Dongfeng Lantu, Dongfeng Fengshen and Dongfeng Yipai, as well as joint venture brands such as Dongfeng Nissan, Dongfeng Honda, Dongfeng Peugeot, Dongfeng Citroen, Venucia, Infiniti, etc., with more than 50 models, giving back to nearly 60 million users and expecting to replace subsidies of more than 10 billion yuan.
Among them, the replacement subsidy policy of Dongfeng's high-end smart electric vehicle brand VOYAH covers all models of the new VOYAH FREE, the new VOYAH Dreamer and the VOYAH Chasing Light, and the purchase of a car can enjoy a cash discount of up to 50,000 yuan; Dongfeng Fengshen Haohan replacement subsidy up to 20,000 yuan, Dongfeng Fengshen Haoji up to 40,000 yuan; Dongfeng Fengxing models up to 60,000 yuan; Dongfeng Nissan models up to 14,000 yuan; Dongfeng Honda models up to 11,000 yuan.
In terms of recycling, Haier has built the industry's first home appliance recycling interconnection factory in Qingdao, which can realize fully automatic dismantling from components to materials, and the dismantled iron, aluminum, copper and some hard plastics will be remelted and smelted and reused, which can achieve 100% recycling.
The pain points of the industry cannot be ignored
However, it should not be ignored that in the implementation of the trade-in policy, there are some problems that need to be solved urgently.
According to a recent survey by the Beijing Municipal Bureau of Statistics, among the more than 3,000 citizens who participated in the survey, 11.1% of the respondents will produce discarded large pieces of furniture in 2023. Among these consumers, in addition to giving to others and repurposing, 46.5% choose to sell scrap, and less than half choose to trade in the old through formal channels.
The disposal of large pieces of old furniture in home improvement consumer goods has become one of the pain points of consumers who want to replace it but are unwilling to replace it. There is a big difference between the recycling value of old furniture and old household appliances, and the large pieces of furniture with a long service life are difficult to reuse except for solid wood furniture, their volume is larger, and it is difficult to recycle, so they can only be thrown away, which makes residents want to change but are unwilling to change, and cannot be replaced.
In the home appliance industry, dismantling the old machine, sending the new machine, and installing the new machine are the "three steps" of replacing the old with the new, however, the current three steps are still not smooth. Industry insiders said that one of the main reasons is that the people involved are from different units.
Therefore, although the implementation of large-scale equipment renewal and trade-in of consumer goods is a major benefit for enterprises, it also objectively requires enterprises to further accelerate the standardization of the recycling and treatment of waste products, and open up the "last mile" of green circular economy construction as soon as possible.
In this regard, Zhou Mi said that the above-mentioned "pain points" actually point to a problem, that is, the supporting industrial chain of trade-in needs to be improved urgently. "The information channels between the entire trade-in supply chain may not have been opened." Zhou Mi believes that this is the root of the problem. There are different roles in this information channel, including the government, sales companies, production enterprises, recycling and maintenance companies, logistics and other enterprises. Some of the roles of each link are relatively strong, and some are relatively weak, which leads to the unsmooth flow of the whole channel.
Zhou Mi said that what needs to be done in the future is to re-engineer the process, transform the trade-in service into a standardized process that is usable, referential, and acceptable to everyone, and further improve it. In this process, all parties should strengthen cooperation. At the same time, some experts said that all parties need to increase information transparency, make installation fees more transparent and credible, so that consumers can understand and rest assured.
In January this year, Suning Tesco platform began the "integration of sending new and towing the old" service, through collaborative operation, so that the demolition of the old and the delivery of the new "parallel" are carried out simultaneously, and the "one-time door-to-door" realization of sending the new and dragging the old, from the past a car can be loaded with 10 home appliances, to now each car is only loaded with 6, leaving a certain amount of room for maneuver. Up to now, household appliances such as refrigerators, color TVs, washing machines, and gas stoves have basically been dismantled and towed away while new appliances have been brought into the home.
Some industry associations are also taking action. "How to establish and identify the elimination mechanism of household appliances with high energy consumption, high danger and high maintenance rate?" Liu Wenjie believes that in order to promote the smooth development of trade-in, it is necessary to give full play to the leading role of standards and give full play to the role of professional think tanks of industry associations under the support of government policies.
To this end, starting from 2022, the China Household Appliance Service and Maintenance Association (CSSIA) plans to take "expanding domestic demand, high quality, new trends, and setting benchmarks" as the theme, and "set off a larger-scale household appliances in 100 cities, thousands of towns and thousands of households in history to collect the old and rejuvenate the new tide" (referred to as the new trend), which is based on the prediction of the national strategy and national policy, economic and market development.
Industry insiders said that the trade-in is a systematic project, which is related to all walks of life and thousands of households, and requires overall consideration, comprehensive planning, precise policy, and comprehensive efforts. Production enterprises act as the "main promoter", accurately capture consumer demand, cultivate new quality productivity, produce intelligent, green and low-carbon new products, improve after-sales service, win consumer recognition, and effectively connect supply and demand. Logistics companies act as "connectors" to smooth the recycling of old things, the delivery of new products, and the transportation of renewable resources. Dismantling enterprises should be "recyclers", standardize the dismantling, classification, and disposal of old things, prevent environmental pollution, and realize resource regeneration. Merchants should be "salesmen", strengthen the publicity and guidance of the trade-in policy, and serve consumers with high quality. The government should do a good job of "setting up the platform", increase fiscal, financial, taxation and other policy support, break down the obstacles of "cannot be changed", "unwilling to change" and "inconvenient to change", so that "it is easier to go to the old and more willing to change the new", and truly realize the two-way rush between production and consumption, policy and market. ("China Famous Brand" reporter Chen Fan)