In front of home appliance shops, clusters of farmers crowd about the shop assistants. Some were discussing with their spouse while others were carefully taking out the money but still grasping it in their rough hands before giving it to the assistant.

“The TV sets are great. Sharp images make them worth the money. Look, I just bought one for only 668 yuan,” said 72-year-old Xu Guiling excitedly. “It will be easier for me to kill time when my children are making their living in big cities.”

Wang Xiaoming, owner of a small appliance shop named Minghong, called the government’s plan to stimulate rural spending “inspiring”. “Six televisions, four refrigerators and one icebox sold out within half a day. It was common to have no appliances sell out for several days before the subsidy policy was introduced.”

Sales figures for Sichuan Changhong Electric Company revealed more than 2,500 appliances were sold to farmers on January 15 — the first day on which the province started to implement the preferential policy.

“The sales figures of our more than 1,000 distributors are on the rise. The purchasing power of the rural population is amazing, ” said Deng Xiaohui, the company’s marketing manager.
Special presents

For farmers living in rural areas, the rebate offer was considered a surprise and a special present from the government with the Spring Festival, the country’s most important traditional holiday, approaching.

The Ministry of Finance declared last month it would offer farmers a 13 percent subsidy on the prices of home appliances. This was done to stimulate sluggish rural consumption and improve their life quality.

Huge foreign direct investment and fast-growing exports have long been major contributors to

“The urban market for household appliances has been saturated. Continuous price wars in cities are tragic. It is the time for us to cast eyes to the rural markets, where farmers want high quality products,” said an expert with

“

Such potential spending power was obviously not lost on the government as its subsidy offer touched the pulse of the market.

A pilot program to test this was initiated in three major agricultural provinces of eastern Shandong, central Henan and southwestern

In the pilot,

The three listed manufacturers all saw their share index rise recently. The government’s subsidy policy was considered to be the direct driving force behind the booming business.

“The government subsidies give rural residents great incentives to buy and it also provides appliance makers excellent opportunities to make breakthroughs in rural areas,” said Wang Zhen, a Guotai Junan Securities analyst.
Customized design and guaranteed after-sale service
The major concern of the farmers before the pilot was implemented were after-sale service and whether the appliances were out-of-date.
Their worries, however, proved unnecessary.
“All the goods have just rolled off the production lines. Actually, we promote the performance of products to make sure the images on the televisions will not fluctuate even when the voltage is unstable,” said Deng Xiaohui, Sichuan Changhong Electric Company marketing manager.

Like Changhong, Meiling Co. Ltd has also made some considerations to better its customers’ lives.

“They made a mouse guard on the back cover of refrigerators so that mice can not build nests there. It’s a subtle change but it will extend the life of the refrigerators in rural places where there are more mice than in cities,” said a shop assistant surnamed Wu.

Zhang Xing, Qingdao Aucma Group general manager, said his company was reaching out to rural areas and had so far established more than 10,000 sale terminals in country areas of the three pilot provinces. “Aucma will send not only products but also fashion, energy saving and the best services to the countryside.”

The Ministry of Finance said the central and local governments would pay 80 and 20 percent of the subsidy, respectively. An insider said recently that the central and local governments’ budget of the pilot had reached 10 billion yuan.

In Shangdong, one of the pilot provinces, 178 million yuan in subsidies from the the central and provincial government had been allocated to counties and townships in advance. A villager in the city of

“Money is not a problem. The more villagers who buy, the more subsidies we would like to pay,” said Yu Guoan, Shangdong Provincial Department of Finance deputy director.

The pilot ends on May 31. If it continues to sail smoothly, it will be spread throughout the country as all the rural population and more appliance makers are expected to benefit from the preferential agricultural policy. 

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