Subsidy boosts rural home appliance sales

China's Ministry of Industry and Information Technology says home appliance sales in the countryside are increasing. The surge is mainly the result of the country's rural home appliance subsidy program. The program has also helped domestic manufactures combat the global financial crisis.

Figures show that during the first 10 months of this year, sales of home appliances under the scheme reached over 27 million units. The total revenue was 50 billion yuan.

Industry insiders say the increasing sales in the countryside have offset the impact brought on by the global financial crisis. Meanwhile, manufacturers have also changed their marketing and sale strategies to meet the surging demand from the home market.

Although China's home appliance industry has reported a 20 percent drop in exports this year, the sector's total output remains unchanged from a year earlier.

Huang Wei, Vice President of TCL Corp. said "Our company is shifting its sales focus. In 2007, nearly 60 percent of our products were sold overseas. The rate dropped to 50 percent in 2008, and 40 percent this year."

Xu Dongsheng, Deputy Secretary General of China Household Electrical Appliances Assoc. said "During the first 9 months of this year, the combination of profits earned and taxes paid by the country's home appliance sector hit nearly 30 billion yuan. This number has increased 34 percent year on year. We have hardly seen a rise like this in recent years. "

The China Household Electrical Appliances Association says cooling appliances are the most popular products in the rural market. During the first 10 months, the pre-tax profit of China's cooling appliance manufacturers stood at 7.6 billion yuan, up 46 percent year on year. Meanwhile, the sector's net earnings hit 4.6 billion yuan, a jump of 43 percent from a year earlier. The growth rate was the fastest among all types of home appliances.