Mobile phone manufacturing and retailing in China is developing strongly.

Rapidly accelerating technology, new product innovation, and increased consumer purchasing power are behind the growth according to data from IBISWorld.

In the five years to 2013, revenue for the communication equipment retailers industry in China has been growing at an annualised rate of 29.6 per cent to an estimated $40.1 billion, IBISWorld says.

Wired communication retailing has entered the mature stage of its life cycle, whereas mobile communication equipment retailing continues to develop rapidly, it says. Most recently, the mobile communication equipment product segment – which includes smartphones – has stolen market share from the wired communication equipment segment.

The communication equipment retail industry is characterised by a large number of small-scale stores scattered in third and fourth-tier cities and many outlets retailing industry products in department stores and supermarkets.

The top four retailers – China Unicom, China Telecom, Suning, and 360buy Jingdong Mall – account for 38.9 per cent of total industry revenue, says IBISWorld.

The researcher anticipates that the industry concentration level will increase gradually as well-established enterprises set up more outlets and expand their distribution networks and the rising penetration of online shopping adds to the revenue shares of major online players.

Large chain stores and online platforms are both more competitive than small and single-store retailers.

As the overall Chinese economy continues to develop, mergers and acquisitions will also occur with larger retailers expanding by acquiring smaller ones.

Future growth trends include falling mobile phone prices, gradual growth in demand from China’s central and western regions, strong demand for smartphones in the developed eastern and northern regions, further market liberalisation policies, the expansion of 3G mobile networks and the construction of a 4G network.