New subsidy plan for digital products drives up consumption, boosts demand for industrial players

With the launch of a new subsidy plan for mobile phones and digital products on Monday, domestic enterprises from cell phone manufacturers, and retail stores to industry chain players have reported a surge in consumer demand and favorable market feedback.

The daily sales of Xiaomi mobile phones in recent days have quadrupled compared with pre-subsidy levels, with in-store foot traffic rising by 55 percent, Lu Weibing, president of Xiaomi, posted on his official Sina Weibo on Wednesday.

A salesperson at a mobile phone store in Joy City in Beijing's Chaoyang district told the Global Times on Wednesday that store traffic has noticeably increased since the subsidy plan was introduced, since consumers can receive subsidies of up to 500 yuan ($68.76) on mobile phones priced under 6,000 yuan.

Chinese authorities previously unveiled an action plan of subsidy measures for purchasing new smartphones and other digital products, which cover products of both domestic and foreign brands.

Under the plan, individual consumers purchasing smartphones, tablets, smartwatches or wristbands priced below 6,000 yuan per item will receive a subsidy covering 15 percent of the product's sales prices. Each consumer can receive a maximum subsidy of 500 yuan per item, with a limit of one subsidized item per category starting on Monday.

Apple's flagship models, such as the iPhone 15 and iPhone 16, qualify for national subsidies. A consumer who ordered a 256GB iPhone 16 with a subsidy price of 5499 yuan compared to prices in the US market, found the iPhone 16 is currently the most affordable globally at the subsidized price, domestic news outlet Jiupai News reported.

Wang Chaotong, a marketing director at home appliance retailer Suning in Beijing, expected the store sales may increase five to ten times while the current inventory is prepared based on 10 times the previous amount, the China Media Group (CMG) reported on Tuesday.

The implementation of the subsidy plan will likely drive up electronic sales by more than 300 billion yuan, per the CMG report, citing Jin Xiaoqing, an engineer at China Academy of Information and Communications Technology.

Beyond boosting consumer spending, the implementation of the subsidy plan has also stimulated demand across industrial and supply chain sectors.

Since the announcement of the policy, many electronics manufacturers reported a significant increase in order volumes, especially those involved in the manufacturing of smartphones, tablets, and laptops, and their production lines are operating at full capacity, with some factories having shifted to a 24-hour shift production mode, according to the CMG report.

Chen Rui, a representative from an electronic component company, was quoted in the CMG report that their order volume has risen by 37 percent month-on-month, with orders scheduled through April 2025.