The consumer potential in the home appliance market is witnessing a remarkable expansion, driven by proactive government policiesAccording to forecasts, in 2024, a central initiative to promote the replacement of old appliances with new ones will see over 62 million units sold across eight major categories, significantly stimulating consumption by nearly 270 billion yuanRecently, the range of categories eligible for subsidies in the "trade-in" program has increased from eight to twelve, with maximum subsidies reaching up to 20% of the sales price for individual items.

As the government ramps up the "trade-in" policies, the recycling and dismantling of old appliances are experiencing a double boostProjections estimate that the quantity of discarded home appliances collected is set to rise by 14.83% year-on-year, with regulated dismantling seeing a notable increase of 20%. This raises pertinent questions: What happens to the old appliances once they are handed in? And what challenges remain in the recycling process?

The effort to enhance recycling is becoming increasingly importantThe majority of old appliances traded in under these policies go to specialized recycling facilitiesThese institutions meticulously categorize and dismantle the devices, extracting valuable components and materials for reuseData indicates that a striking total of 4.5 million tons of old appliances were recycled in China in 2023. Some of the collected appliances undergo repairs and refurbishments before re-entering the market, while those deemed irreparable are dismantled responsibly to ensure that the processing of waste materials is environmentally safe.

The metals and plastics within these widely used appliances are often referred to as "urban minerals." If not handled properly after disposal, these materials can lead to soil and water pollutionAccording to statistics, recycling just one ton of outdated appliances can lead to a reduction of approximately 4.7 tons in greenhouse gas emissions like carbon dioxide, a formidable contributor to global warming.

Li Ning, deputy secretary-general of the China Household Appliance Service and Repair Association, emphasizes that appliance recycling not only mitigates the negative ecological impact of electronic waste but also minimizes production costs by allowing businesses to repurpose components from old devices, thus conserving resources.

Yuan Hui, a supervisor in the plastics project team at Changhong Electric’s waste recycling division, elaborated on the automated processes involved in dismantling old appliances

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These processes effectively separate metals from non-metals, where the scraps and components are handled in eco-friendly manners to prevent pollutionFor instance, the outer casings of old appliances can be processed through automated dismantling and crushing, then further refined to form recycled plastic pellets, which can be reused as raw materials in the production of new appliances.

By 2027, there is an ambitious target for the collection of discarded appliances to increase by 30% compared to 2023 levelsAdditionally, to promote the sales of appliances, enterprises are encouraged to collaborate with manufacturers and recycling companies to facilitate trade-in events, featuring designated online and offline promotional areas where consumers can receive discounts for exchanging old appliances for energy-efficient replacements.

Experts in the industry posit that benefits from favorable policies will gradually unlock the demand for appliance upgrades and replacementsConsequently, the questions surrounding the fate of old appliances are likely to find resolutionMoreover, the trade-in initiatives are prompting Chinese appliance manufacturers to accelerate the development of products that meet international green standards, such as those with higher energy efficiency ratings, environmentally friendly materials, and design features that facilitate recyclingThis transition augurs well for boosting the competitiveness of Chinese appliance brands within the larger international market, paving the way for a comprehensive green transformation in the global appliance sector.

Nonetheless, navigating the complexities of the recycling process poses several challengesIn major appliance retail outlets, promotional signage for trade-in programs is ubiquitousStaff members not only assist consumers in selecting new appliances but also handle the collection of old devicesAlthough the recycling chain for old appliances is improving with various stakeholders’ efforts, there are still notable bottlenecks that hinder smooth transactions

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The abrupt rise in collected obsolete appliances has not been paralleled by an increase in formal recycling channels, leading to ineffective resource utilization and exposing severe environmental and safety risks.

Li Ning points out that recycling old appliances constitutes a systemic endeavor that encompasses accurate valuation of old units, logistics, dismantling, safe handling, and effective communication with usersEstablishing a scientifically sound, standardized process is essential yet challenging for many smaller recycling enterprises, necessitating clear roles and coordinated planning across different sectors.

The trade-in process encompasses various elements, such as purchasing, collecting, customer service, and recycling, creating ample market potential for the recycling industryThe coordination efficiency among manufacturers, retailers, recyclers, and processors is crucial for the overall fluidity of trade-in operationsOften, the lack of effective information sharing and cooperative mechanisms results in cumbersome processes and low productivityFor instance, manufacturers may not be fully aware of market dynamics, leading to unreasonable pricing for recyclables; retailers may lack clear information about recycling options, hindering their ability to provide consumers with convenient services; and imbalances in profit-sharing between recyclers and handlers can discourage active participation in the recycling chain.

However, a significant number of consumers remain unaware of the trade-in policies or are hesitant to participateConsequently, several appliance manufacturers are exploring new operational modelsFor instance, Xu Ming, head of planning at Changhong, noted that the company is providing a "one-stop" service for users throughout the home appliance recycling processBy offering comprehensive pre-sale, in-sale, and post-sale services, Changhong is simplifying the "trade-in" process for usersUtilizing a mini-program, consumers can easily evaluate old appliances and book collection services online, streamlining interactions.

Enhancing the entire industry ecosystem is crucial for the recycling and repurposing of old appliances

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This endeavor plays a vital role in boosting consumer spending, minimizing environmental impacts, and conserving resourcesIt requires concerted efforts from the government, various enterprises, and society to establish a robust recycling framework that enhances efficiency and processes, promoting sustainable industry growth.

Between February 2024 and 2025, plans are set to establish model cities nationwide focused on recycling obsolete appliances and furniture, nurturing prominent recycling enterprises, and aiming for a 15% increase in the collection of discarded home appliances compared to 2023, alongside notable improvements in standardized recycling levels.

Research conducted by AVC projects that the total number of household appliances in China has surged beyond 4 billion unitsGiven the typical safety lifespan of eight to ten years for most home appliances, we are approaching a significant wave of upgrades and replacements in the coming years.

Zhao Chenxin emphasizes the need to accelerate the development of a "replacement + recycling" logistics system and innovative models, encouraging e-commerce platforms and manufacturers to fulfill extended producer responsibility by providing door-to-door collection services for outdated consumer goodsMoreover, enhancing the recycling network is vital, targeting the establishment of 2,000 standardized collection points in large and medium-sized cities, along with the construction of 200 green sorting centers.

Li Ning also shared that the China Household Appliance Service and Repair Association is working intensively with its members to promote the "refreshing trend" of appliance recycling, encouraging enterprises to engage in local communities and explore new business models, positioning the trade-in programs as enduring, sustainable, and stable practices to facilitate a long-term upgrade in services within the appliance sector.

In addressing existing challenges in the recycling industry, Li suggested establishing a consumer-friendly recycling system that guides users to transfer old appliances to qualified and capable enterprises, thereby fostering a healthy and orderly development of the appliance recycling framework.

Industry voices are calling for relevant departments to expand the outreach of trade-in policy promotions, enhancing consumer awareness and acceptance

Furthermore, it's imperative for businesses to continue refining "trade-in" procedures to elevate the consumer experience during the purchasing and recycling processes.