Government subsidies have spurred a surge in digital and home appliance consumption during the Labour Day holiday. Producer: "Store traffic doubled this Labour Day holiday!"

The national subsidy continues to take effect, with the trade-in policy gaining momentum in the home appliance and 3C digital markets.

During the Labour Day holiday, Caixin reporters learned from offline stores in Guangdong, Guangxi, and Anhui that the national subsidy has significantly increased foot traffic in home appliance stores. "When you asked just now, there was still a white one available, but now it's out of stock," a staff member at the Huawei counter in JD Digital's offline store told the reporter. Caixin learned from ST Suning (002024.SZ) that from May 1 to May 5, foot traffic in Suning's nationwide stores increased by 110% YoY, trade-in orders for home appliances grew by 57%, and sales of home appliances priced above 10,000 yuan rose by 79%.

Some market participants believe that the trade-in policy implemented in H2 last year has released some demand in advance, and the growth rate of related consumer product shipments may slow down this year. However, several industry insiders interviewed by Caixin believe that structural opportunities still exist. In the future, the release of policy dividends and the advancement of consumer demand will drive further growth in sales of high-end home appliances, health, and smart products.

The "national subsidy" is unprecedented in its intensity. In Q1 this year, many regions expanded the implementation of the trade-in policy for consumer goods, which has had a significant boosting effect on related categories. According to data from the Ministry of Commerce, as of April 27, the implementation of the trade-in policy has boosted consumption by over 720 billion yuan. So far, more than 120 million people have enjoyed real cash subsidies.

A domestic robot vacuum producer revealed to Caixin that in Q1, the company's domestic sales increased by 40%-50% YoY.

ST Suning told Caixin that from the perspective of consumption trends, consumer demand for home appliances has shifted from "basic functions" to "quality experience," with trends in large screens, built-in appliances, and smart consumption becoming prominent. In Q1, Suning's sales of built-in refrigerators increased by 125% YoY, sales of TVs with screens larger than 75 inches grew by 107% YoY, and sales of high-suction, self-cleaning range hoods rose by 160% YoY. As consumers' recognition of smart and healthy home appliances increases, sales of air purifiers, water purifiers, and coffee machines increased by 211%, 160%, and 217% YoY, respectively.

As the Labour Day holiday approached, the "national subsidy" wind blew even stronger, with the subsidy combined with store discounts attracting consumers to make purchases.

According to Chang Meng, the store manager of Suning's Yangqiao store in Beijing, a customer purchased 10 home appliances with a market price of over 50,000 yuan, and after combining the national trade-in subsidy, factory discounts, and platform subsidies, they were able to save over 10,000 yuan.

ST Suning further revealed to Caixin that during the Labour Day holiday, Suning's home appliance package orders increased by 10% YoY, with more and more consumers choosing to purchase a full set of home appliances in one go.

Since the beginning of this year, benefiting from the national subsidy, the structural upgrade of most home appliance categories has been significant. AVC monitoring data shows that in Q1, the product structure of high-end price segments in the online markets for TVs, washing machines, range hoods, microwave ovens, and rice cookers has improved significantly.

ST Suning stated that during the Labour Day holiday, sales of high-end brand air conditioners such as COLMO and Casarte increased by 280%, sales of large-capacity washing machines over 12 kg grew by 155%, sales of high-end wine cabinets rose by 281%, and sales of home appliances priced above 10,000 yuan increased by 79%. "The demand for mid-to-high-end home appliances has seen a concentrated outbreak, and the penetration of quality home appliances is accelerating; consumers are more willing to pay for brand premiums, technical performance, and quality experience."

Industry chain producers have also benefited. Jinko Electronics (02551.HK) told Caixin that since the national trade-in policy was implemented in August 2024, it has significantly boosted the company's market demand and shipments for TVs and high-end backlight products, especially for products like Mini backlights and high-dynamic-range dimming. Until Q1 2025, the TV and new-type display markets have continued to grow. With the continuous optimization of the policy, consumer demand for high-quality and smart products will continue to drive the growth potential of related products.

In the consumer electronics sector, after mobile phones and other 3C digital products were included in the national subsidy for the first time on January 20, sales have also increased significantly.

Caixin reporters learned from JD Digital Mall during the Labour Day holiday that Huawei and Apple phones, which rarely participated in promotions before, have offered unprecedented discounts in this year's national subsidy. For example, the Huawei Mate70 256G and Apple 16 256G are both priced at 5,499 yuan after the subsidy. "The Mate70 256G is currently out of stock, but I recommend the Pura70, with the Beidou version 512G priced at only 4,699 yuan after the subsidy."

ST Suning told Caixin that during the Labour Day holiday, sales of computers, mobile phones priced above 6,000 yuan, and tablets increased by 104%, 117%, and 232% YoY, respectively.

Liu Jiyuan, Deputy Director of the Research and Innovation Department at AVC, stated that the national subsidy's boost to the home appliance market has shifted from high growth to stable growth. The characteristics of each category vary by stage, with cleaning products leading, while washing, environmental appliances, TVs, kitchen appliances, and small kitchen appliances saw slight increases, and air conditioners and refrigerators declined.

A relevant person in charge of Jinko Electronics also holds a similar view, stating that with the rapid advancement of the trade-in policy in the home appliance sector, some sub-markets may face structural challenges such as saturation of replacement demand and capacity adjustments by companies. However, from an overall trend perspective, the continuity of the policy and the release of emerging demand will continue to inject momentum into the industry.

Yan Zhengkun, head of Suning's Store Management Center, stated that from the perspective of user demand, consumers are increasingly focusing on lifestyle creation and tend to choose high-end and smart digital products and home appliances. Driven by the dual forces of consumer policy dividends and user demand upgrades, the market penetration rate of mid-to-high-end home appliances is expected to continue to rise in 2025, especially for green, smart, and healthy home appliances, which will see rapid growth.

"The country is actively planning a new round of subsidy policy optimization, which is expected to further stimulate consumption enthusiasm for product categories that have not yet fully launched, such as in the NEV and in-car intelligence directions, where the policy also shows clear support," said a relevant person in charge of Jinko Electronics. The NEV trade-in subsidy policy has been gradually implemented, and the continuous expansion of supporting demands such as in-car displays, smart cabins, and smart interiors will bring new incremental space to industry chain segments such as high-end backlight modules, in-car displays, and in-car interior ambiance.