Ant Group's interest-free installment plan boosts Double 11, offering merchants a new way out of price wars.

Original @新熵 Author 丨 Siyuan Editor 丨 Jueying

This year's Double 11, "national subsidy" became the most frequently mentioned term. In the live streams of major home appliances and furniture brands, almost every host tirelessly repeated the phrase "national subsidy."

Attentive consumers also noticed that alongside "national subsidy," "interest-free installment with Huabei" was frequently mentioned.

In fact, since "Huabei installment" officially became part of Double 11 in 2015, it has been one of the most popular promotional measures among consumers every year. Many shoppers are even willing to place orders specifically because of the interest-free installment option.

During this process, more and more merchants have recognized the consumption potential unlocked by interest-free installments and have joined in. Data shows that over 5 million merchants have used interest-free installments to boost sales growth.

As a digital financial tool, "Huabei interest-free installment" has become a "must-have" and a "growth coupon" for merchants.

A Standard for Double 11 Merchants

This year's Double 11 saw a clear trend: more products offered interest-free installments, and not just from flagship stores but also from small and medium-sized merchants. Even many products in live streams were eligible for interest-free installments.

Behind this trend lies the heightened importance that platforms and merchants place on interest-free installments—it's not just a preference but a necessity.

Frankly, interest-free installments aren't a new tool; they've been around on online platforms for years. However, their significance among merchants and live streamers has noticeably increased. Many merchants now consider "interest-free installments" as crucial a promotional tool as "price cuts," and from a long-term value perspective, they prefer investing in interest-free installments.

This shift is tied to the never-ending price wars.

In today's market, where promotions are constant, merchant profits have been squeezed to the extreme, with margins as thin as a razor blade—a reality across almost all industries. Merchants are stuck in a quagmire: "Cut prices too much and you won't make money; cut too little and sales won't move."

With traffic growth plateauing, relying on paid traffic for growth is no longer effective, and it's increasingly hard to attract consumers to place orders. A marketing expert in the consumer sector bluntly stated, "E-commerce has moved past the era where buying traffic guaranteed big sales. It's tough to make a splash just by throwing money at ads, but not buying traffic is like slow suicide—sales can't be guaranteed either."

As a result, merchants of all sizes across industries urgently need new tools and strategies to drive growth. Huabei interest-free installments have become a new lever.

The logic is simple: Compared to indirect price cuts, every penny merchants spend on interest-free installments translates directly into GMV. More importantly, merchants can sell their products without slashing prices excessively, maintaining reasonable profit margins.

Currently, brands across industries are highly willing to support interest-free installments. In the 3C sector, interest-free installments are particularly well-established as a marketing tool. It's almost a given that 24-month interest-free installments are a must for smartphone launches. Brands like Xiaomi, Honor, OPPO, vivo, and even Apple have offered 24-month Huabei interest-free installments during new product releases.

Beyond high-ticket categories, interest-free installments are rewriting the "rules of the game" for marketing across industries.

Categories like cosmetics, apparel, and daily necessities—typically with lower price points—are also joining the trend. Even a piece of clothing under 200 yuan may now support 3-month interest-free installments. Data shows that during the first wave of this year's Double 11 sales, the number of merchants offering Huabei interest-free installments grew by 17% year-over-year.

This year, merchants supporting Huabei interest-free installments also exhibited a new trend: more products offering longer installment periods. In categories like home appliances, electronics, furniture, smartphones, sports, and outdoor gear, many bestsellers provided 12-month interest-free installments. Data indicates that the number of products supporting 12-month and 24-month interest-free installments increased by over 20% year-over-year.

Changing Consumer Mindsets

Of course, Huabei interest-free installments aren't just a one-sided push from merchants. More consumers are adopting interest-free installments as a savvy lifestyle choice, especially among younger generations. Planned consumption is on the rise, with greater emphasis on healthy cash flow—embracing the mentality of "pinching pennies where you can, splurging where it counts."

Surveys show that over 90% of consumers who've used interest-free installments consider them a money-saving tool, and over 60% prefer interest-free installments even when they can afford to pay in full upfront.

This reflects a broader shift in consumer attitudes: Installments are no longer tied to affordability but are seen as an essential tool for smart spending. When merchants and platforms subsidize interest, it doesn't add to consumers' costs. Instead, "interest-free installments" lower the barrier to consumption, avoid sudden large expenses, and reduce the burden on consumers' cash flow.

"Since interest-free installments cost me nothing extra, why not spread out the payments and earn returns by parking the money in wealth management products?" said Wang Yuan, a young white-collar worker. Nowadays, even for items he can afford to buy outright, he leans toward installment payments. "I may not need it, but the option should be there." To him, interest-free installments offer a more flexible and economical way to spend compared to paying in full upfront.

The advantages of Huabei interest-free installments are even more pronounced for big-ticket purchases like smartphones, home appliances, and furniture. One consumer did the math: Buying a 10,000-yuan computer with a 12-month interest-free installment plan means paying less than 1,000 yuan per month. With a 24-month plan, the monthly payment drops to just 416 yuan. Meanwhile, parking the remaining funds in Yu'ebao could yield dozens of yuan in returns over a year. The reverse-consumerist attitude is clear: "Don't ignore small savings—every bit counts."

For most consumers, avoiding excessive short-term cash outlays allows for better financial planning—"the more interest-free installments, the better."

Some consumers even apply an accounting mindset akin to "depreciation accrual." They reason that durable goods like refrigerators, TVs, and furniture are meant to last for years, so the cost should be spread over time. Survey data shows that when 24-month interest-free installments are available, over 30% of consumers opt for this payment method.

This consumer behavior is backed by theory. From the perspective of the time value of money, a given amount of cash today is worth more than the same amount in the future.

On social media, some financially savvy users have already recognized the benefits of interest-free installments for optimizing cash flow and consumption across time periods. They've taken to spontaneously "recommending" this service to more netizens.

Fueling the Growth Engine

The growth benefits of interest-free installments are also tangible.

A 2023 iResearch report, the "Interest-Free Installment Tool Value Research White Paper," found that nearly 70% of merchants reported noticeable sales increases after offering interest-free installments. On average, sales of products with interest-free installment subsidies rose by 30%, while overall store sales increased by 15%.

Huabei installments have evolved from a financial tool into a comprehensive solution for merchant growth. Ant Group has opened the interest-free installment feature to merchants, allowing them to independently configure their digital operations backend and choose marketing tools like interest subsidies based on sales strategies. Across three key stages of the sales funnel, Huabei installments help merchants boost conversions, drive growth, and increase average order values.

Previously, Huabei partnered with Honor for a new product launch, creating a dedicated sales channel within the Huabei app to leverage its traffic. Unlike traditional "spray-and-pray" traffic approaches, Huabei applied its data intelligence capabilities and powerful algorithms to the commercial scenario, targeting the new product to audiences with the highest conversion potential.

He Jinqiu, head of Honor's e-commerce business, explained, "Huabei's precise audience targeting and computing power have transformed our product launches. For example, during the Honor Magic 6 series launch on the Huabei channel, UV increased by 30%, but sales and GMV surged by 400% and 500%, respectively. This data shows that effective operations aren't just about flooding traffic but improving conversion rates. Moreover, GMV growth outpacing sales growth indicates higher average order values—the biggest takeaway from our collaboration with Huabei."

In May of this year, Hangzhou Stomatological Hospital partnered with Huabei to upgrade its real-time medical consumption credit solution. By offering industry-specific merchant credit lines, the hospital enabled patients to spread high medical costs over multiple months, reducing single-payment pressure. This improved payment willingness, provided more flexibility for patients, and enhanced the hospital's service capacity and efficiency.

Bai Yang, deputy general manager of Tongce Medical, noted, "Installments not only improve user experience but also increase accessibility and acceptance of dental services among consumers."

In recent years, both online and offline markets have struggled to escape the price war trap. However, years of practice have proven that competing solely on price isn't sustainable for merchants or platforms—it's essentially a race to the bottom that leaves everyone worse off.

Interest-free installments offer an alternative. They allow merchants to avoid the endless profit erosion of price wars, maintain healthier pricing systems, and support sustainable operations. Today, this is a crucial driver for merchants to continuously stimulate demand and boost consumption growth.