HAGC: Future Is The Point

Haier is transporting refrigerators for consumers. The picture is from www.haier.com.

It's inevitible to feel the chilly air in such turbulent circumstances for every country in the globalized chain. But China's problem is quite different from US and Europe, which is even much tougher——the problem of real economy is overriding that of virtual economy. To solve the problem, the most effective and probably also the most harmless solution, is to stimulate the domestic market, especially the potential rural market. Home Applicances Go Countryward (HAGC) is just one of what the Chinese government is doing to boost the rural market.

With the help of this plan, when every rural or suburban dweller buys an appointed type of applicances, he can enjoy an allowance granted by the government, which amounts to 13% of its total price. Since there's a big gap of ownership number on home applicances between urban and rural households, HAGC is supposed to help home applicances providers occupy the potential market in order to relieve the press on export decreasing.

Actually, it's really helpful to those providers, but perhaps indirectly, namely, for the future. "Although rural market is only a very small amount among our sales, we have to assure our products on the HAGC list," said Cao Chuancheng, vice chairman of supervisory board of Aucma, a Chinese home applicances provider, "because suburban market was always our major. If we lose the bid, our brand would be negatively influented to enter the rural market. And you know, it will be huge. With HAGC stimulating, some of our products was even out of sale during this Spring Festival."

Guo Qingcun, vice president of Hisense, another big provider, agreed very much. "HAGC can't make quick and big money for us now. What we concerns most is to let rural consumers know, like and be loyal to our brand. For this goal, we even offer allowances by ourselves for those products which aren't on the HAGC list. Moreover, rural market isn't the disposal area of inferior or lowend product. We must develop more suitable products." Mr. Guo's opinion probably denoted that the gap between rural and urban consumers is narrowing. "We noticed that the young rural consumers, especially those are ready to get married, prefer LCD TV to traditional CRT TV. It's a great change of the consuming trend. HAGC will have a huge impact on boosting the trend."