The new round of &#34;trade-in for new&#34; subsidies has brought strong sales growth to e-commerce platforms. Citigroup expects that JD.com and Alibaba's revenue growth in the fourth quarter of last year will exceed expectations, with further growth anticipated in the first quarter of 2025.
According to data from the Ministry of Commerce on January 16, 2024, over 36 million consumers used government subsidies to purchase more than 60 million home appliances across eight categories, driving sales exceeding 260 billion yuan. Following the government's announcement on January 8 to expand and extend the coverage of the trade-in subsidy program, the subsidy activity officially launched on January 20, leading to strong growth in sales of smartphones, tablets, and smartwatches on JD.com and Tmall.
In its latest report, Citigroup conducted a forward-looking analysis of JD.com and Alibaba's fourth quarter of 2024, noting:
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The trade-in program supported JD.com and Alibaba's revenue growth in the fourth quarter of 2024 exceeding expectations, and the extension of the program along with the expansion of more 3C categories is expected to continue driving growth in the first quarter of 2025.
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Citigroup highlighted the following points regarding the first-day sales performance:
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JD.com: 1) According to a report by Jiemian News on January 21, the trade-in subsidy activity has been launched on JD.com in Beijing, Hubei, Jiangsu, Zhejiang, and Shaanxi. JD.com data shows that as of 12:00 PM on January 20, in provinces and cities where the trade-in program is available, mobile phone sales increased by 200% month-on-month, tablet sales increased by 300% month-on-month, and children's smart watch sales increased by 100% month-on-month.
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<li>Offline channels - According to a report by Sina News on January 21, JD.com's home appliances, JD Mall, and JD's Five-Star Appliances have welcomed the first wave of customers driven by government-subsidized mobile phones in self-operated stores across 19 provinces and cities. Reports indicate that the average foot traffic of customers visiting stores on January 21 increased threefold.</li>
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Tmall: According to DoNews on January 20, as of 24:00 on January 20, the overall transaction volume of mobile phones, tablets, and smartwatches (smart bands) on Tmall increased by over 300%, with mobile phones increasing by over 300%, tablets increasing by over 300%, and smartwatches (smart bands) increasing by over 80%.
According to DoNews, popular models in the categories of mobile phones, tablets, and smartwatches (smart bands) include Redmi K80, Xiaomi 15, OPPO Find X8, Xiaomi Tablet 7, Honor Tablet 9, and XiaoTianCai Z8A
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Citigroup believes that the trade-in program has supported JD.com and Alibaba's revenue growth exceeding expectations in the fourth quarter of 2024. The extension of the program and the expansion into more 3C categories are expected to continue driving growth in the first quarter of 2025

- The new round of "trade-in" subsidies has significantly boosted sales for e-commerce platforms, with Citigroup predicting that JD and Alibaba's Q4 2024 revenues will exceed expectations and continue to grow in Q1 2025.  
- Over 36 million consumers utilized government subsidies to purchase more than 60 million home appliances in 2024, generating over 260 billion yuan in sales.  
- The trade-in program's expansion and the strong sales performance of smartphones, tablets, and smartwatches on JD and Tmall indicate a positive impact on revenue growth for both companies.

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The new round of "trade-in for new" has a strong start, with robust sales on Tmall and JD.com