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Trade-ins giving shot in arm to retailers

Incentives boost switch to electric vehicles amid China's green drive

By FAN FEIFEI | China Daily | Updated: 2024-05-17 09:52
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People browse trade-in services for home appliances at a mall in Shanghai on May 12. [Photo/China Daily]

Chen Zhiguang, an employee from an internet company in Shanghai, bought a new air conditioner during the recently concluded May Day holiday, saving more than 1,500 yuan ($208) thanks to current trade-in stimulus policies.

"I participated in the old-for-new promotional campaign as I can enjoy subsidies equivalent to 10 percent of new product prices, as well as discounts and shopping coupons from home appliance retailers," Chen said. "Green and energy-saving household appliances containing innovative technologies are very cost-effective."

Chen is also considering replacing his gasoline-powered vehicles that have been used for more than 10 years with a new electric car as local authorities have rolled out favorable policies and offered subsidies of up to thousands of yuan per vehicle to encourage drivers to place orders and cut their carbon footprints.

In addition, a string of Chinese automakers including BYD, Xpeng and Nio have provided subsidies for consumers who scrap old cars in exchange for new energy vehicles.

Chen is among millions of Chinese shoppers who are increasing expenditures on consumer goods under the new round of trade-in program, which experts said will further unleash consumers' purchasing potential, bolster consumption recovery and inject new momentum into the country's economic growth.

According to online service platform Meituan, search volume for "trade-ins" has surged more than 110 percent year-on-year since March, with the "old-for-new" campaign allowing electric vehicles, automobiles, home appliances, gold and mobile phones to gain popularity among consumers.

"Trade-ins have recently accounted for 40 to 50 percent of our orders every day," said Zhao Hongfu, manager of a store owned by Chinese retailer giant Suning in Shanghai, adding that the new plan has largely unleashed consumer vitality in the home appliance market.

Data from Suning showed that the orders for "trade-ins" soared 70 percent year-on-year across the nation during the May Day holiday break, while sales of green and energy-saving household appliances skyrocketed 110 percent compared with the same period last year. The orders for the replacement of old air conditioners with new ones jumped 78 percent from a year earlier, Suning said.

China has rolled out a raft of specific measures to facilitate and encourage trade-ins of consumer goods — nearly 15 years since the last such round of renewals, according to an action plan jointly released by the Ministry of Commerce and 13 other government departments in April.

By 2025, the recycling of scrapped automobiles will increase by 50 percent compared with 2023, and recycling of used home appliances will increase by 15 percent from 2023, while the market share of energy-efficient appliances will be further increased, the plan added.

The plan stated that subsidies will be given to consumers who scrap high-emission passenger cars to buy energy-efficient NEVs, so as to promote trade-ins for automobiles.

The country will also provide financial support to establish recycling systems for discarded home appliances. Local governments and home appliance companies are encouraged to offer subsidies or preferential policies for consumers who buy or trade for green and intelligent home appliances.

The plan includes encouraging the upgrading and renovation of old homes and bolstering the consumption of smart household products. Industry analysts said China's intensified push to promote trade-ins of consumer goods will help facilitate the scrapping of used goods in exchange for smart, green and low-carbon alternatives.

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