As China’s annual 618 e-commerce shopping festival kicks off, the expansion of “state subsidies” has ignited a surge in trade-in consumption. Unlike previous years, when financial institutions primarily relied on red envelopes, layered subsidies, and reduced loan rates, this year’s promotions feature prominent “state subsidy price cuts” and extended interest-free installment options.
Financial players—including e-commerce platforms’ lending arms, commercial banks, and consumer finance companies—have launched targeted campaigns around the shopping festival. Central to these efforts are installment-based financial products, which serve as key levers to stimulate spending. For example, JD BaiTiao (JD’s installment service) is promoting market expansion through “12-month interest-free + offline payment integration,” while Ant Huabei (Alipay’s installment product) combines “12-month interest-free coupons” with “official price reductions” and state subsidies to create attractive consumption scenarios.
The synergy of state subsidies and long-term installments has significantly boosted consumer activity. Data shows that during the first phase of Tmall’s 618, GMV for state-subsidized categories like home appliances, furniture, and mobile electronics grew 283% compared to last year’s Double 11, with over 3,000 brands doubling their year-on-year sales. On JD’s first 618 day, installment orders for home appliances accounted for over 35% of sales, while new energy vehicle installment disbursements increased 70% year-on-year, reflecting strong growth in big-ticket and emerging sectors.
Yang Tao, a researcher at the Chinese Academy of Social Sciences’ Institute of Finance and director of its Payment and Clearing Research Center, notes that the combination of state subsidies, platforms’ massive user bases, and digital financial tools has created economies of scale and network effects. Digital payment tools, he explains, not only facilitate fund transfers but also serve as critical customer engagement channels. Their convenience enhances the matching of subsidies with consumers, improving both the shopping experience and willingness to spend. Additionally, digital payments now go beyond mere transaction “pipelines” to offer value-added credit services within regulatory boundaries.
Bank Strategies Shift: From Interest Rate Wars to Scenario-Driven Services
Banks are also participating in 618 with installment promotions. The Ningbo Bank app offers 3, 6, 12, and 24-month interest-free installments for multiple 3C products, while China Guangfa Bank’s online mall promotes “0 interest, up to 24-month installments” for selected items. Notably, the intense “price wars” in consumer lending seen in previous years have subsided. In Q1 2025, consumer loan rates dipped below 3%—even lower than the LPR—prompting regulatory scrutiny. This 618, banks have shifted from volume-driven low-rate competition to deepening scenario-specific services, focusing on higher credit limits, longer tenures, and large-ticket consumption loans. For instance, ICBC’s auto installment loans grew 8.5% month-on-month, while ABC’s home renovation loans rose 22.78% year-on-year, demonstrating how low rates effectively stimulate demand for major purchases.
Tian Xuan, Dean of Tsinghua University’s National Institute of Financial Research, emphasizes that while credit policies play a key role in boosting consumption, “chasing lower rates is not sustainable.” Financial institutions should instead compete through “product and service innovation,” such as tailoring loan limits, tenures, and rates to individual credit profiles and needs, offering flexible repayment plans, and developing personalized credit products for niche consumption scenarios.
Consumer Finance and Fintech: Innovating Scenarios and Engagement
As complements to traditional banks, consumer finance and fintech companies are focusing on interactive marketing and scenario penetration. Haier Consumer Finance, for example, is launching “Smart Home Installment” campaigns in Shenzhen, Guangdong, and Tongren, Guizhou, with dozens of Haier stores participating. During the promotion, consumers can enjoy “0 down payment, 0 interest, 0 fees” for 6 or 12-month installments on smart and energy-efficient home appliances, overlay state subsidies.
Qifu Technology’s Qifu JieTiao is offering up to 50% rate discounts and daily full discount coupons for major consumption scenarios like home appliances, cars, and travel, expected to benefit over one million users.
Policy Backing: From Short-Term Stimulus to Long-Term Structural Upgrades
The 2025 Government Work Report highlighted boosting consumption and investment to expand domestic demand. Recent policy documents, such as the Special Action Plan for Stimulating Consumption and Guidelines on Developing Consumer Finance to Support Consumption, encourage financial institutions to increase consumer loan disbursements—within risk limits—and optimize loan terms.
Liu Ying, a researcher at Renmin University’s Chongyang Institute for Financial Studies, notes that the coordinated use of fiscal subsidies and financial tools has created a win-win for businesses and consumers. The deep integration of subsidies and financial innovation is transforming trade-in campaigns from short-term stimuli into long-term engines for consumption upgrades. Expanding policy coverage to include essential goods and service-based consumption, she adds, could further unlock endogenous momentum for quality-driven consumption growth.
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