BOCOM INTL: Government subsidies continue to drive or boost the stable growth of GMV on e-commerce platforms. It is expected that revenue will grow at a rate of 8-14% by 2025.

BOCOM INTL released a research report stating that on January 8th, the National Development and Reform Commission and the Ministry of Finance issued a notice on the implementation of a large-scale equipment upgrade and old-for-new policy for consumer goods by 2025, expanding the 8 major categories of consumer electronics in the 2024 market to 12 categories. Looking ahead to 2025, the revenue growth rate of e-commerce platforms is expected to be between 8-14%, with Alibaba's Taobao revenue expected to accelerate growth under the recovery of GMV growth and increase in realization rate, and JD's realization rate remaining stable. The focus is on the continuation of the old-for-new national subsidy policy's impact on electrical goods category. BOCOM INTL's main points are as follows: Event: On January 8, the National Development and Reform Commission and the Ministry of Finance issued a notice on the implementation of a large-scale equipment upgrade and old-for-new policy for consumer goods by 2025, expanding the 8 major categories of consumer electronics in the 2024 market to 12 categories, adding microwave ovens, water purifiers, dishwashers, rice cookers, and increasing the subsidy for air conditioners to 3 units, still following the subsidy standards of 20% for level 1 energy efficiency and 15% for level 2 energy efficiency, and implementing new subsidies for mobile digital products, providing a 15% subsidy (see original text and subsidy details) to individual consumers purchasing mobile phones, tablets, smart watches, and wristbands (with a unit price not exceeding 6000 yuan). Old-for-new data in 2024: Since the implementation of the old-for-new subsidy policy in August 2024, according to data from the Ministry of Commerce, it has stimulated over 240 billion yuan in sales of household appliances and related products throughout the year, with the bank estimating the subsidy amount to be approximately 50 billion yuan. According to Xingtu data, the sales scale of household appliance categories on e-commerce platforms during the Double Eleven period increased by over 20%, compared to only 2% for large appliances and 5% for small appliances in the first three quarters, indicating significant policy-driven effects. The bank estimates that online platforms account for 60%+ of the national subsidy, with Tmall/JD channels estimated to account for 35-40%, and Tmall/JD's fourth quarter sales of household appliances driven by the national subsidy were approximately 42.4 billion/48.5 billion yuan, accounting for around 10%/7% of the platform's 3C household appliance transaction scale for that quarter. Expectations for the first quarter of 2025: According to the briefing, considering the consumption demand during the New Year and Spring Festival period, 81 billion yuan in subsidy funds have been allocated for old-for-new consumer goods. Compared to last year's 50 billion yuan and 20% subsidy rate for household appliances, it is expected that the first quarter will stimulate sales of household appliances, digital goods, and other categories of over 150 billion yuan, compared to the total sales of communication equipment and household appliances in the social retail sector in the first quarter of 2024, which was 383.2 billion yuan. The bank still assumes that online sales channels will account for 60%+, with Tmall/JD estimated to account for 35-40%, and Tmall/JD's first quarter subsidy-driven sales growth for household appliances and digital goods is estimated to be around 31.5/36 billion yuan, potentially further boosting platform transaction volume growth (the bank currently predicts Alibaba/JD e-commerce GMV to increase by 6%/8% year-on-year, compared to Visible Alpha's forecast of 4%/9.6%).