On January 27, a subsidy plan for purchasing new mobile phones and other digital products was launched nationwide, triggering a surge in customer inquiries over the weekend. The Department of Commerce in Hainan province announced its subsidy policies for purchasing three categories of digital products – smartphones, tablets and smartwatches or wristbands. These digital products priced below CNY6,000 per item will be eligible for a one-time subsidy covering 15% of the product's sales price after the retailer's discount, according to the plan. Each consumer can receive a maximum subsidy of CNY500 per item, with a limit of one subsidized item per category for each customer. The Beijing Municipal Commerce Bureau also released detailed subsidy rules for digital product purchases on the Bureau's official WeChat account. The subsidy policy is the same as the MOFCOM's and Hainan's plans.
An employee at a smartphone retail store in Beijing, who declined to be identified, told the Global Times that the store has seen a surge in customer inquiries over the weekend. “Most customers are specifically asking about smartphones, with some expressing concerns about inventory levels and the possibility of stock shortages once the subsidy policy is implemented. For that, we have adequately prepared our inventory to meet the demand,” the employee said. In the first 11 months of 2024, China produced 1.504 billion mobile phones and launched a total of 393 new models, which can meet users' personalized upgrade needs, Xu Wenli, an official with the Ministry of Industry and Information Technology (MIIT), said at a press conference introducing the digital product subsidy plan. “As of the end of 2023, China's mobile phone users reached 1.727 billion. If 10% of these users participate in a phone purchase subsidy program, it would generate a CNY100 billion market for new device purchases,” said Xu. Wang Peng, Associate Research Fellow at the Beijing Academy of Social Sciences, told the Global Times that the subsidy can stimulate consumption, and increase sales in the digital product sector. It can also boost consumer confidence, encouraging greater willingness to spend. This helps establish a virtuous cycle that further invigorates the consumer market. “Such a digital product subsidy plan will create more development opportunities for the relevant industrial chain,” Wang said. MIIT's Xu also said that a single mobile phone contains thousands of components and parts. The sales increase driven by the purchase subsidy will also create new growth for the upstream supply chain, leading to business expansion in related fields.
Apart from the digital product subsidy policy, MOFCOM also unveiled the trade-in plan for home appliances this year, increasing the number of eligible categories from eight in 2024 to 12 in 2025. Under the new trade-in plan, each consumer can receive subsidies for one piece of each type of product (the maximum subsidy for air conditioning products is three pieces), with the subsidy of each piece not exceeding CNY2,000, the Global Times reports.
