Huiyin Household Appliances (Holdings), a mainland electronics retail chain operator and distributor, said its sales increased nearly 75 per cent in the first three days of the National Day holiday compared with the same period last year.
'Though the mainland economy is slowing down, we are confident demand for electronic products will keep rising rapidly in third- and fourth-tier cities,' chairman Cao Kuanping said yesterday. Huiyin's operations are focused on rural areas.
The government last month said a scheme to encourage villagers to buy home appliances would end on November 30 in Shandong, Henan and Sichuan provinces. The scheme will be terminated in other provinces gradually, though there is no timetable.
Cao said that although authorities started winding up the stimulus package for the subsidy scheme early this year, sales would not be affected. 'I don't think it will impact us, as rural demand is still strong,' he said.
The cause of the demand, he said, was the mainland's rapid urbanisation, income growth among migrant workers and the ongoing upgrade of the manufacturing sector in southeastern coastal areas.
'In rural areas, living standards keep rising and what farmers need are barrel washing machines,' Cao said, adding that the subsidy scheme made little difference.
'Farmers no longer need the products that the scheme covers. In the first- and second-tier cities, demand is weakening but in the third- and fourth-tier cities, it is not.'
He said the company's performance in the second half of this year should be similar to that of the first half, when it clocked up revenues of 1.44 billion yuan (HK$1.75 billion).
Beijing launched the stimulus programme in December 2007 to tackle the global economic crisis by boosting domestic demand. Under the scheme, farmers buying certain types of televisions, refrigerators, washing machines and mobile phones would be given a discount of 13 per cent of the price.
Ministry of Commerce statistics show that by the end of August, 180 million electronic items had been sold in the 'home appliances to the countryside' scheme, with the government providing 46 billion yuan in subsidies.
Industry analyst Luo Qingqi said the stimulus scheme's impact on demand was obvious, but that Beijing was confident that even without the package, domestic demand would still be strong.
'The rural market is a huge consumption engine as the country's 800 million farmers are entering a phase of electronics consumption,' he said.
Luo said sales of electronic items in the week-long National Day holiday should see a substantial increase from last year.