A new round of "trade-in" releases the new vitality of the home appliance industry

The new round of "trade-in" not only brings out new opportunities in the home appliance market and new vitality in home appliance consumption, but also lays a solid foundation for building a green, circular and sustainable consumption system. Industry insiders pointed out that in this process, e-commerce platforms with a huge user base, efficient logistics and distribution capabilities and data management processes have begun to play an important role.

"Trade-in" brings new incremental space

Not long ago, the State Council issued the "Action Plan for Promoting Large-scale Equipment Renewal and Consumer Goods Trade-in" (hereinafter referred to as the "Action Plan"), proposing four major actions such as trade-in and recycling of consumer goods, supporting home appliance sales enterprises to carry out trade-in promotional activities with production enterprises and recycling enterprises, opening online and offline home appliances trade-in zones, and giving preferential treatment to consumers who exchange old appliances for energy-saving household appliances.

The reporter noted that in response to the new round of "trade-in", home appliance companies have begun to act.

Haier said that home appliance companies should not only provide users with more intelligent and green new products through scientific and technological innovation and intelligent manufacturing, but also actively explore new service models, from "new home appliances" to "new home scenarios" for users. It is reported that Haier will continue to carry out green, energy-saving, intelligent and original technology research and development, provide home improvement consumer goods replacement services, and at the same time build a big data platform for home appliance recycling, and make efforts in the "recycling and reuse" of household appliances.

Midea has launched a series of trade-in activities for home appliances in various places, and set up trade-in convenience service points in some communities, communities, and administrative villages, providing residents with door-to-door evaluation of old machines, recycling of old machines, and simple household appliance cleaning services.

The home appliance industry attaches great importance to the trade-in, which is related to the current home appliance market facing great pressure on demand growth.

According to the data of the Ministry of Commerce, since the implementation of the trade-in policy of household appliances from June 2009 to December 2011, a total of 92.98 million new household appliances in five categories have been sold across the country, driving direct consumption of 344.2 billion yuan, effectively guiding the release of urban residents' consumption capacity.

At the same time, the household appliances purchased by urban and rural consumers are about to enter or have entered the elimination period, and if these household appliances are used beyond the time limit, they are likely to cause a series of problems.

Gree said that from the industry level, the mainland home appliance market has entered the peak period of upgrading, and the trade-in will further improve the enthusiasm of users to buy home appliances, stimulate the consumer market, and also help enrich the application scenarios of new technologies. Haier also believes that a new round of "trade-in" can not only effectively stimulate market consumption and accelerate future industrial development, but also effectively promote industrial technology upgrading.

Industry analysts believe that after years of development, the home appliance industry has entered the stock market, and the overall consumer demand is dominated by replacement, and the trade-in can break through the consumption blockage and provide a new incremental space with updated consumption as the main body, thereby driving the entire home appliance industry to improve quality and expand capacity.

E-commerce platforms will play an important role

After entering the digital era, the evolution of user demand has promoted the diversification of China's home appliance retail channels, which also indicates that in the new round of home appliances "trade-in", online platforms with diverse formats will play an important role.

In the face of the huge market space and the new needs of consumers, e-commerce platforms have begun to layout.

On March 13, Suning Tesco announced that it would increase the trade-in subsidy of 10 billion yuan, and will cooperate with home appliance brands to carry out large-scale trade-in activities for a long time. Jingdong also recently said that it will invest 3 billion yuan in 2024 in conjunction with home appliance brands to increase the trade-in subsidy and service experience upgrade of home appliances.

At the 2024 China Home Appliances and Consumer Electronics Expo held not long ago, JD.com joined hands with Haier, Samsung, Midea and other ten well-known brands at home and abroad to launch a number of "lightning new products". The person in charge of JD's retail home appliance home life division said that in JD's "lightning new season" activity, the above-mentioned related "lightning new products" can enjoy a discount of 10% off the trade-in.

It is understood that Jingdong launched the trade-in service for home appliances as early as 2016, and through a series of service upgrades, it helps consumers reduce the cost of buying new machines at the same time, and also provides a more convenient recycling and replacement experience. Up to now, JD's trade-in has covered more than 200 home appliance subcategories, and in 2023, JD will recycle more than 15 million home appliances through trade-in, and this number is expected to reach 30 million units in 2024.

It is worth noting that Jingdong also uses its own advantages in the supply chain to solve many pain points in the process of trade-in of home appliances.

The person in charge of Jingdong's relevant business said that many consumers do not have the concept of "life" for household appliances, and think that even if there is a failure, they can continue to use it if they repair it. In addition, many consumers think that the old phone is not valuable, the new phone is not cheap, and the replacement process is too cumbersome. It is precisely because of the fear of trouble that many users endure old household appliances again and again, use them when they can, or put them away for a long time.

To this end, in addition to cooperating with major brands to provide trade-in subsidies, JD.com also actively focuses on the production end and recycling end, and cooperates with upstream and downstream partners to improve the waste household appliance recycling system from the front-end old product valuation and new product subsidy, to the mid-end collection and delivery of the new, and then to the back-end old product treatment, optimize the trade-in experience, and form a complete closed loop of the whole industry chain.

According to industry insiders, in the face of a new round of household appliances "trade-in" one after another, the entire home appliance industry is poised to go. The mainstream home appliance channels led by JD.com, through the continuous optimization of the service system, accelerate the construction of a complete industrial chain cycle with upstream and downstream partners, and lay a solid foundation for a new round of large-scale home appliance replacement.

Guo Zhaofen, Chief Analyst of China International Electronic Commerce Center, said: "As a bridge between brand manufacturers and consumers, e-commerce platforms are important participants in the 'trade-in' initiative based on their huge user base, efficient logistics and distribution capabilities, and data-based management processes. She pointed out that on the one hand, e-commerce platforms can help "trade-in" activities reach more consumers more quickly and effectively, and on the other hand, the "one-stop trade-in" of e-commerce platforms not only improves consumers' trade-in service experience, but also stimulates consumers' willingness to trade in their old ones.

Xu Dongsheng, vice chairman of the China Household Electrical Appliances Association, also believes that the e-commerce platform has a large sales scale and strong digital management capabilities, and the "Internet + recycling" model can effectively implement management, achieve transparency and traceability throughout the process, and help solve the problem of recycling order management.

Promote the home appliance industry to go "green".

As household appliances tend to be high-quality, intelligent, and green, "the replacement of green and intelligent home appliances" has become the protagonist of the large-scale trade-in of the home appliance market.

It is understood that in the process of landing the "Action Plan", "replacement" and "renewal" are the focus. Therefore, to promote a new round of "trade-in" in the home appliance industry, it is necessary to promote production, supply and marketing, upstream and downstream, government, enterprises and people, online and offline coordination and linkage, and comprehensive policies. Among them, a standardized recycling system will be the key.

At present, the recycling system of waste household appliances is still in the process of standardized development. According to the relevant person in charge of Jingdong, in the past, most of the people engaged in the recycling of waste household appliances were "roadside guerrillas", and now through the recycling and decomposition of formal channels such as Jingdong, it not only effectively avoids the pollution of waste household appliances to the environment, but also gives birth to the vigorous development of the dismantling industry of waste household appliances. In the future, more market players will take advantage of the policy dividends and work together to build a fast, convenient, controllable, and efficient standardized recycling network.

In the view of Zhou Yunjie, chairman of the board of directors of Haier Group, a new round of "trade-in" will bring opportunities in three aspects: first, with the release and implementation of policy details, users' enthusiasm for purchasing household appliances will be effectively improved, thereby driving the entire industry to usher in new market opportunities; In addition, the trade-in of the home appliance industry will accelerate the development of circular economy and provide a new opportunity for the green transformation of the entire industry.

The industry believes that household appliances are important bulk consumer goods, which not only play an important role in improving the quality of life and enhancing life satisfaction, but also help stabilize the recovery trend of consumption, fully release the potential of domestic demand, and promote economic development. As an important part of expanding domestic demand and promoting consumption, a new round of "trade-in" in the home appliance industry will stimulate market vitality, improve the efficiency of the industry, promote the consumption growth of green and smart home appliances in the mainland, and promote the transformation and upgrading of the home appliance industry to green and low-carbon. (Reporter Fu Yong)

Source: Economic Information Daily