China market: Beijing Dixintong to expand handset retail shops to 5,000 in 5-7 years Tweet

Beijing Dixintong Electronics Communication Technology, the largest handset retail chain in China, plans to spend two billion yuan (US$292.91 million) to expand its retail outlets from the current 1,200 to 5,000 in the next 5-7 years, according to company chairman Liu Donghai. Dixingtong accounts for a 35-40% share of China's roughly 200 million handsets per year market.

Liu pointed out that the company is currently working with China-based carrier China Mobile, and plans to sell handsets with service packages from China Unicom and China Telecom as well.

Though the three telecom service providers have established thousands of outlets in the country, their operations are still less efficient than handset retail chains, Liu said. Handsets sold with telecom service packages represent about 20-25% of Dixingtong's total revenues.

The biggest opportunity of China's handset industry will come from urbanization of agricultural areas. With the spending power of rural population on the rise, Liu is seeing people from the regions willing to pay more for quality. It is apparent when looking at China's white-box market, which saw annual sales decline from 60 million units to about 30-40 million units annually, he said.

In the past, handset channels in agricultural areas consist of small independent retailers and their offerings were mostly low-end white-box devices, Liu noted. As product quality and services rise in importance, there are opportunities for national retail chains such as Dixingtong in the exploding market by providing better handsets and services, he added.

According to the company, 75% of China's population will live in urban areas in 2050.

Labels: