Since the beginning of this year, a number of home appliance distributors have emerged in the market, especially individual operators and husband-and-wife store owners in rural markets, who continuously call for and hope that the government will cancel the "national subsidy" policy for home appliances. Why is this happening?

In the last four months of 2024, the home appliance market brought countless hopes and a favorable "national subsidy" policy for many enterprises and businesses. However, just a short 2 to 3 months into its implementation in 2025, it quickly faced a wave of "complaints" and "criticisms" from a large group of dealers in rural markets, with many businesses even publicly calling for the cancellation of the home appliance "national subsidy" policy.

The emergence of this phenomenon is believed by the home appliance industry to be a "side effect" of the ongoing implementation and triggering process of the home appliance "national subsidy" policy, which is accelerating the reshuffling of numerous small and weak businesses and enterprises in the home appliance market. There are two main reasons:

First, the home appliances "national subsidy" policy has accelerated the reshuffling, elimination, and squeezing of small and medium-sized manufacturers by large and medium-sized companies in the market. This has resulted in a large number of manufacturers that either do not have "national subsidies" or have them but lack brand strength and product quality, thereby failing to benefit from the policy. As a result, their businesses have become more difficult and profits harder to achieve. The mainstream consumption is rapidly concentrating on leading large and medium-sized manufacturers, which naturally impacts and sidelines a large number of small and medium-sized manufacturers' businesses.

Secondly, during the process of disbursing central government subsidies, there are a series of standardized and stringent procedures and documentation requirements, which also impose clear demands on consumers redeeming coupons. This has placed significant constraints and regulations on many home appliance businesses, especially rural dealers, who were previously operating in a more lax and arbitrary manner. Some merchants wanting to receive the subsidies they have previously advanced must submit a large amount of paperwork and documentation. Moreover, the varying lengths of funding disbursement cycles across different regions have caused merchants to harbor grievances and concerns.

Currently, there are differing opinions among the numerous dealer groups in the rural market regarding the favorable "national subsidy" policy for home appliances. As sales in the first-tier markets decline and competition intensifies, a price-cutting frenzy has emerged, making it difficult for many manufacturers to operate. The home appliance circle has discovered that many rural dealers secretly hope the "national subsidy" policy for home appliances will be canceled; some dealers even candidly express that they do not want the "national subsidy" policy to be extended after it expires at the end of this year. Furthermore, a significant majority of the dealer group cannot even imagine what they would do if the "national subsidy" policy for home appliances continues into 2026.

In fact, for many large and medium-sized manufacturers in the home appliance market, the "national subsidy" policy that started in September last year has had a significant impact on the operating performance of manufacturers and the activation of demand from the main consumer groups. It is equivalent to the government providing an additional discount of up to 20% to stimulate the public to buy home appliances, on top of the existing discounts offered by home appliance companies and retailers. Although this "real cash" benefit is given to consumers, it has improved and revived the business of home appliance companies and retailers. It can be said that the entire supply chain of home appliance manufacturers has generally benefited.

Regarding the numerous voices in the market calling for the cancellation of the home appliance "national subsidy" policy, the home appliance industry believes that while this can be understood, it cannot be agreed upon.

On one hand, the central "national subsidy" policy has a significant and far-reaching impact on the high-quality development and transformation of the home appliance industry. This time, the home appliance "national subsidy" policy mainly provides subsidies for energy-saving home appliance products, rather than all home appliance products. This clearly aims to guide consumers to purchase energy-saving quality products, encouraging home appliance manufacturers to focus on quality product management and development, and to avoid falling into the "price competition" of inwardly-focused competition.

On the other hand, the "national subsidy" for home appliances is merely a temporary industrial policy, designed to support the development of the entire industry in a special period and environment. It aims to guide companies and businesses in the industry towards a healthier, more standardized, and sustainable direction. In particular, for a large number of strong, branded, and product-capable enterprises and merchants, this is the best time for transformation and change. If they remain stuck in the inertia of past development and the comfort zone of operations, home appliance manufacturers will never find a way to the future.

In addition, it should be noted that among the current group of manufacturers calling for the cancellation of the national subsidy for home appliances, there are several categories that are either being eliminated by the market or have been forgotten by users. The speculative and deceptive business strategies that were once common have now failed in the current competitive market environment. For example, businesses that are not eligible for the national subsidy, as well as a large number of companies engaged in "parallel imports," and a significant group producing and selling "counterfeit and substandard" products, originally had no survival space.

In the past two years, the introduction of the home appliance "national subsidy" policy has only accelerated the process of "survival of the fittest" in the first-tier market. In simple terms, it has diminished the original profit margins of a group of weaker manufacturers, allowing a large number of capable manufacturers to "earn a living based on their abilities."