Author丨Dongmu Chu
华商韬略出品丨ID：hstl8888
How long has it been since you changed your phone.
TechInsights, a research firm, predicts that the replacement cycle for smartphones worldwide will be extended to 51 months, the longest in history, and in China, to 40 months.
From mobile phones to home appliances, to automobiles and housing, the market has entered the era of stock, with smartphone shipments declining year after year, sales of mid-to-high-end models peaking, real estate companies encountering a cold winter, the economy is still in the post-epidemic recovery period, and consumption needs to be boosted urgently.
On March 13, the State Council issued the Action Plan for Promoting Large-scale Equipment Renewal and Trade-in of Consumer Goods (hereinafter referred to as the "Action Plan"), which mainly includes two parts: industrial and agricultural equipment replacement and consumer goods replacement.
It is estimated that "trade-in" will be a large market with an annual scale of more than 5 trillion yuan, and mining increments in the stock is the core goal of "trade-in".
On March 27, the Ministry of Commerce and 14 other departments issued the "Action Plan for Promoting the Trade-in of Consumer Goods", focusing on the deployment of the trade-in of three major consumer goods, such as home appliances, home decoration, kitchen and bathroom, and automobiles.
"Trade-in" is not a new policy, in the past ten years, we have also experienced "home appliances to the countryside" and "cars to the countryside".
In June 2009, in order to cope with the sluggish domestic demand under the global economic crisis, the Ministry of Finance and other seven ministries and commissions jointly issued the "Implementation Measures for the Trade-in of Household Appliances", which was first piloted in nine provinces and cities including Beijing, Tianjin, Shanghai, Jiangsu, Zhejiang, Shandong, Guangdong, Fuzhou and Changsha.
The 20-character principle of that year was: "simple procedures, convenient consumption, direct subsidies, safety and efficiency, energy conservation and environmental protection".
The subsidy standard for that round is 10% of the sales price of new household appliances, and the upper limit of subsidies for related electrical appliances is: 400 yuan/set for televisions, 300 yuan/set for refrigerators (including freezers), 250 yuan/set for washing machines, 350 yuan/unit for air conditioners, and 400 yuan/unit for computers.
According to a report by the Lookout Think Tank, from June 2009 to 2011, the central government subsidized a total of 32 billion yuan in "home appliance trade-in", with an average annual value of about 15 billion yuan.
At the end of 2011, the Ministry of Commerce announced the results of the home appliance replacement action: a total of 92.48 million new home appliances in five categories were sold nationwide, driving direct consumption of more than 342 billion yuan.
Some experts said when talking about these two rounds of home appliance replacement 15 years apart, the focus in 2009 is on the popularization side of large durable goods, and in 2024, the focus is on the quality and performance of "whether it is good or not".
In the past 15 years, the number of household appliances in major categories such as refrigerators, washing machines, and air conditioners in mainland China has increased from 1.3 billion units to 3 billion units, according to the calculation of Huachuang Securities, there are 730 million units that need to be replaced beyond the safety period, according to the actual conversion rate of the last round of home appliances for new ones, the number of new household appliances that may be replaced in this round is 180 million units, and the estimated sales are more than 600 billion.
In the past 15 years, the way people buy household appliances has changed a lot, from going to physical stores to shopping around on online platforms, therefore, major online e-commerce platforms have followed up this round of home appliances to trade in the old and new, and launched their own plans, perhaps it can be said that the platform will become the "protagonist" of this round of home appliance replacement action.
After the release of the "Action Plan", all major e-commerce platforms have updated the home appliance recycling sector.
JD.com, which started by selling 3C home appliances, announced that it will launch a nationwide trade-in subsidy campaign, covering 20 provinces and cities, and plans to invest 6.5 billion yuan in a new round of trade-in of equipment and consumer goods.
In the circular economy track, JD has long had a layout. In 2019, JD.com merged its second-hand goods trading platforms "Paipai" and "Aihuishou", and as of December 31, 2023, the total number of offline stores of Aihuishou reached 1,819, covering 268 cities across the country.
Alibaba is also ready to do a big job, in October 2012, "Taobao second-hand" was launched, two years later changed its name to "Xianyu", the current average daily transaction volume of Xianyu exceeded 1 billion, and in 2023, nearly 30 million post-95 users will use Xianyu.
After JD.com and Alibaba, Tencent's second-hand trading platform "Zhuanzhuan" is also making efforts, and it is transferred from the second-hand trading channel under 58.com, which received Tencent's investment in 2017. In this round of trade-in, in addition to stores in big cities, Zhuan Zhuan also took the initiative to "attack" more than 150 counties to provide recycling training and employment opportunities for young people in the county.
From the perspective of the people, whether in 2009 or now, the most concerned issue has not changed, that is, how to get real benefits through trade-in, especially the network platform that started with recycling smart phones, there is more or less room for improvement in the recycling of traditional household appliances, and solving the "recycling difficulty" is the first step to replace the new.
According to a survey by the Workers' Daily, there is a problem of "the price of cabbage for the recycling of old household appliances" on the online platform, that is, regardless of the quality of the electrical appliances, they are recycled at an ultra-low price of tens of yuan a piece.
A reporter from Beijing Youth Daily also found a similar problem, and the old refrigerator household appliances on an e-commerce platform will be deducted 60 yuan regardless of the brand, new or old; Air conditioners, hang up 250 yuan, cabinet 450 yuan; The TV is 35 yuan, the washing machine is 50 yuan, and the recycling price seems to be still at the level of 2009.
A netizen said: "I spent nearly 10,000 yuan to buy a refrigerator a few years ago, and the valuation on the platform was only 60 yuan. ”
The "cabbage price" of old electrical appliances is the pain point of trade-in, and to solve this problem, it is necessary to make good use of the renewable resources in a large number of waste electrical appliances.
According to the data released by the Ministry of Industry and Information Technology, in 2023, the recycling rate of household appliances such as refrigerators, washing machines, and air conditioners will exceed 80%, and the copper used in refrigerator refrigeration systems, aluminum used in heat pipes, and rare metals in various circuit boards are indispensable basic raw materials for the manufacturing industry.
Since the beginning of this year, the price of non-ferrous metals has risen, resulting in an increase in the cost pressure of downstream manufacturing manufacturers.
In addition to the replacement of home appliances, the potential of the home improvement market is also huge.
The leader of the China Household Appliance Service and Maintenance Association said: "There are 180 million sets of houses in the mainland, of which about 80 million were before 2010, and if they are renovated once every 10 years, the reinstallation rate is about 5% or more, that is, there are 5 million old houses to enter the stage of renovation every year." ”
The renovation of home decoration often starts with changing furniture, kitchen and bathroom, and there are many pain points in this part.
At present, about 70% of the kitchen area of Chinese urban residents is 7 square meters, and the old kitchen appliances in small spaces should have been replaced long ago, but they are restricted by problems such as moving lines and building materials.
Out of the kitchen, the living room, bedroom sofas, wardrobes and other large pieces of old furniture are also facing the problem of nowhere to go, as well as mattresses with a service life of 5-7 years, many of which are "overdue", and it is very difficult for these large pieces to be moved downstairs, let alone recycled independently.
Solving similar pain points and providing full-chain services, including door-to-door recycling, should be the standard configuration of trade-in services for home appliances and home improvement.
As a "leading brand of high-end kitchen appliances in China", Fotile sees a more long-term and huge opportunity.
In Fotile's view, "trade-in" will become the normal survival of enterprises in the stock era. At present, the yearning of Chinese families for a better kitchen life will not change. Therefore, enterprises must have insight into users, be brave in innovation, hit the pain points, and let users have a willingness to change from the heart.
For example, the refrigeration range hood innovatively developed by Fotile ended the era of smoky kitchen fire; It also designed a "three-in-one" sink dishwasher, which can not only wash dishes, wash vegetables, and remove pesticide residues, but also does not occupy kitchen space......
This is not only "new", but also "good"; Not only in the present, but also in the long run.
The old can go, and the new and good can come.
Like the replacement of household appliances, in 2009, the country also implemented car replacement, which focused on heavy trucks, large buses and cars with a displacement of 1.35 liters and above, with subsidies between 3,000 and 6,000 yuan.
Fifteen years later, the current round of car replacement, the focus of support is new energy passenger vehicles and low-emission fuel vehicles, this round of subsidies by the central and local finance in a 6:4 ratio, of which, the eastern provinces are shared in a 5:5 ratio, the central provinces are shared in a 6:4 ratio, and the western provinces are shared in a 7:3 ratio.
The current round of subsidies for car replacement is also the highest in more than ten years.
On April 26, one month after the release of the Action Plan, seven departments, including the Ministry of Commerce and the Ministry of Finance, issued the "Implementation Rules for Car Trade-in Subsidy" for the trade-in of cars.
The "Detailed Rules" proposes that from April 26, 2024 to December 31, 2024, individual consumers of fuel or new energy vehicles can receive a new energy vehicle purchase subsidy of 10,000 yuan or a fuel vehicle purchase subsidy of 7,000 yuan after scrapping the old vehicles that meet the conditions.
The so-called "qualified" used vehicles refer to fuel passenger vehicles with emission standards of China III and below, or new energy passenger vehicles registered on or before April 30, 2018.
As of 2023, the mainland has 336 million vehicles, more than 16 million passenger cars with China III and below emission standards, of which more than 7 million are more than 15 years old, and the number of new energy passenger vehicles registered on or before April 30, 2018 is also considerable, according to the Ministry of Public Security, there are 2.61 million vehicles.
The scale of the current round of car trade-in subsidies may reach 18 million, and according to the calculation of the passenger car association, 40% of the consumption increase in the passenger car market in 2024 will come from trade-in, with about 10 million units.
Compared with home appliances, a car is a "big item" for a family second only to a house, and there are more factors to consider when making a trade-in decision, and it is also more necessary for the government and the platform to solve the problems in the replacement process.
The first is the confusion in the valuation of old cars.
In April, CCTV's financial program reported that Mr. Tang in Beijing wanted to sell the car he had driven for nine years and replace it with a new one. In a large second-hand car trading market, Mr. Tang received quotations from a number of car dealers, some said 50,000 or 60,000 yuan, and some said 70,000 or 80,000 yuan, which made people not know which one to believe.
In response to this problem, the government should strengthen regulatory measures, and expose and punish the behaviors that fool consumers by using poor information to conceal accident cars, adjust mileage, sell more than one car, and overlord contracts, and at the same time introduce third-party testing agencies to make the information of second-hand cars clear at a glance through data docking with insurance companies.
The second is the problem of low value retention rate of new energy used cars.
A second-hand car dealer who has been in the industry for 10 years told reporters: "The price of new energy vehicles is too great, I received a Tesla Model Y that has only been driven for one year and is in good condition at a price of 250,000, and then sold it at a price of 268,000 yuan, but it has not been sold for two months, because the price of new cars has been falling, and I dare not accept new energy vehicles with long years and more kilometers." ”
According to the "April 2024 China Automobile Retention Rate Research Report" released by the China Automobile Dealers Association, the value retention rate of mainstream models is declining due to the price war.
Third, the battery of new energy vehicles decays quickly and the residual value assessment is difficult.
Due to the lack of professional battery testing methods, many consumers who want to buy new energy second-hand cars have retreated, the state of the power battery is very important for the mileage, and consumers need professional and reliable evaluation reports.
According to the prediction of the New Energy Battery Recycling Professional Committee, by 2027, the cumulative retirement of power batteries will reach 1.14 million tons, and if it is not handled well, it will be a great waste of resources.
Lithium, cobalt, nickel and other metals in power batteries are very difficult to mine, energy consumption and carbon emissions, and do a good job of recycling and reuse, which can meet the resource needs of 20% lithium, 25% cobalt and 11% nickel for new energy vehicles in mainland China every year, which is not only conducive to exchanging the old for the new, but also alleviates the dependence of key raw materials on new energy in mainland China.
At present, Geely and other car companies are building a power battery recycling network, and it is hoped that the relevant departments of the industry will formulate standards as soon as possible to form a large platform to make the recycling of power batteries more formal and efficient.
Again, let the people who are willing to change their cars really get the benefits and convenience brought by the new one, which is the source of power for the car trade-in action.
In the past two months, taking advantage of the heat of exchanging equipment and consumer goods for the new, many places have successively launched the policy of "exchanging the old for the new" for housing, and since last year, more than 60 cities or regions across the country have supported the housing "trade-in", mainly "helping to sell" and "buying" two models.
During the May Day period, Shanghai launched the "old for new" activity of commercial housing, and the first batch of more than 20 real estate enterprises, nearly 10 real estate agencies, and more than 30 commercial housing projects participated in it, distributed in Jiading, Songjiang, Qingpu, Fengxian, Lingang and other areas.
Shanghai has adopted a "help-selling" model this time, that is, real estate companies and intermediaries give priority to the sale of old houses, sell the old houses within the time limit, and then buy new houses according to the process.
According to media reports, at a meeting of the Shanghai Real Estate Brokerage Industry Association, 10 intermediary companies reached a consensus to give discounts on intermediary fees to owners who participate in the "trade-in", and the discount is determined to be 7-8% off, and the intermediary companies will "mainly promote" the second-hand houses participating in the trade-in activities.
A salesperson told reporters that the owner who intends to change the new house pays a deposit, if the old house is not sold within the agreed period, the unconditional check-out refund, the sale will not be refunded, and the deposit can only be used to buy a new house; If the owner can make a profit on the sale price of the old house, he can also get a new house subsidy of up to 60,000 yuan.
Wuxi, not far from Shanghai, has adopted an "acquisition" model, that is, local urban investment platforms or real estate companies directly acquire second-hand houses held by residents, and the money from old houses is directly used to replace new houses in designated real estate.
As of the end of April, the first batch of houses in Wuxi has been transacted 25 sets, with a transaction amount of nearly 100 million yuan, which is better than natural transactions.
On May 11, Wuxi Liangxi Urban Development Group released version 2.0 of commercial housing trade-in, version 1.0 only supports one old house for one new house, and version 2.0 can be "one for many", that is, a stock of second-hand commercial housing for a new house or multiple new houses; In addition, the scope of old houses has also been expanded, as long as it is a commercial residence in Wuxi urban area, you can participate in the trade-in.
The "destocking" of real estate is a difficult problem in the puzzle, and compared with home appliances and automobiles, the factors to be considered in "changing houses" have risen from "life" to "life".
According to a person from the China Real Estate Network, the nationwide housing "trade-in" is in its infancy, and some cities have implemented it for a period of time to go to single-digit inventory, and the effect of "destocking" still needs time to observe.
Zhengzhou is the first in the country to carry out housing "trade-in" of the big city, the two models at the same time, from the end of March to the present, a total of 3,676 groups of registrations have been received, 1,629 groups of valid registrations, and 199 groups of new housing intentions have been completed.
First, there is less choice of high-quality improved real estate in the city. The core appeal of most homeowners is to improve their living conditions, but most of the new homes with good locations and reasonable prices are sold out.
Second, some developers are not actively involved in the "trade-in" and do not offer additional discounts to the owners of the new houses.
Third, the "acquisition" model is more popular with property owners than "helping to sell", but it also puts greater pressure on local finances.
The "trade-in" of housing is still in the testing stage, and these three problems will be encountered in other cities across the country, and it depends on the joint efforts of the policy, finance and construction departments to solve them.
From the perspective of the people, policies to obtain benefits and improve their lives have always been welcomed, and the key is to always put the benefits of the people in the first place in implementation.
But the more important thing is to increase everyone's income, and when the pockets are bulging, many problems will naturally be solved.
[1] "New Cars Are Hot and Old Cars Are Cold, Second-hand Car Battery Residual Value Assessed as "Blocking Point"", Beijing Daily
[2] "What are the pain points and blockages faced when home trade-in? CCTV News
[3] "Zhengzhou, which took the lead in launching the housing "trade-in", how is it doing".