Consumers find white goods trade-in a bad deal
The State Council's consumer trade-in initiative – launched in March – is falling well and truly flat.
- That’s according to a reporter for the Workers' Daily, who surveyed online platforms and retail stores in Beijing to assess the success of the trade-in program.
The main issue is that customers are being offered extraordinarily low prices for goods traded in.
- Online platforms offer prices as low as RMB 60 for customers to trade in their fridge, and RMB 35 for a television!
Retail stores offer a fixed price for trade-ins, regardless of the goods' age, brand, or model.
- The price offered for the trade-in is also conditional "on the price of the product you purchase," revealed one sheepish salesperson.
Workers' Daily said there are several reasons for the low prices offered:
- First, the second-hand market for home appliances is poorly developed, meaning most used white goods have to be recycled.
- Second, dismantling and recycling costs are high, and profits are slim.
- Third, there are no unified industry standards to value second-hand appliances.
Get smart: This report was widely reposted by state-run outlets, including Xinhua, indicating that policymakers want to see this issue resolved.
Get smarter: For retailers to offer attractive prices for trade-ins, authorities need to provide more direct subsidies to retailers and recycling firms.
The upshot: Unless the central government provides a fiscal injection, the trade-in initiative will fail to engineer the consumption rebound policymakers are hoping for.