China’s annual 618 shopping festival has kicked off with robust consumer activity, particularly in trade-in purchases boosted by expanded government subsidies. Unlike previous years when financial institutions relied mainly on cash rewards and interest rate cuts, this year’s event highlights the crucial role of national subsidies and interest-free installment plans.
Financial Institutions Embrace Shopping Festival Opportunities
Various financial service providers including e-commerce lending platforms, banks, and consumer finance companies have launched targeted promotions. JD.com’s Baitiao offers 12-month interest-free installments with offline payment integration, while Ant Group’s Huabei combines 12-month interest-free vouchers with direct discounts and government subsidies.
Subsidy-Driven Consumption Breakthroughs
The combination of national subsidies and flexible payment options has significantly boosted spending. During Tmall’s first 618 phase, government-subsidized categories like home appliances and electronics saw GMV grow 283% compared to last year’s Double 11 event. JD reported installment orders accounting for over 35% of appliance sales on opening day, with new energy vehicle financing up 70% year-on-year.
Digital Finance Amplifies Policy Effectiveness
Yang Tao, Director of the Payment and Clearing Research Center at CASS, observes that the integration of subsidies with digital finance creates network effects. “Digital payment tools have evolved beyond transaction channels to provide compliant credit services, enhancing policy-consumer matching and improving consumption experiences,” he noted.
Banks Shift From Price Wars to Scenario-Based Services
Major banks have introduced interest-free installment options without engaging in destructive price competition. Industrial Bank’s auto financing grew 8.5% month-on-month while Agricultural Bank’s home renovation loans increased 22.78% annually, demonstrating effective stimulation of big-ticket purchases.
Industry Experts Advocate Sustainable Strategies
Tian Xuan, Dean of Tsinghua’s National Institute of Financial Research, suggests moving beyond rate competition: “Financial institutions should innovate in product design, offering customized credit limits, flexible repayment terms, and expanded service scenarios.”
Supplementary Players Enhance Market Vitality
Consumer finance firms are activating demand through creative marketing. Haier’s finance unit launched nationwide promotions featuring zero-down, zero-interest appliance purchases, while Qifu Technology offers 50% interest rate discounts for major purchases like cars and travel.
Policy Framework Supports Sustainable Growth
Aligned with 2025 government priorities, recent regulations encourage prudent expansion of consumer credit. Liu Ying from Renmin University highlights the emerging win-win dynamic: “The synergy between fiscal policies and financial innovation is transforming trade-in programs from temporary stimuli into sustainable upgrading mechanisms, with potential for further expansion into essential goods and service consumption.”
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