From booming to barely surviving: The downfall of China's mom-and-pop phone retailers

June was the worst month for Xu Xuefeng, owner of a phone shop in Huzhou, Zhejiang. It used to be the peak season for him with families buying new phones for their kids after school exams.

His shop also used to be frequented by workers from nearby factories and construction sites, places where phones break often. Their incomes might be low but they buy basic phones or budget smartphones regularly.

However, Xu’s business has struggled this year. Before the Lunar New Year, he had stocked up around 800,000 yuan (US$111,000) worth of phones and parts. Now, the value of his inventory fell down to just 200,000–300,000 yuan.

Official stores in urban areas are slowly replacing small phone retailers in China. Photo by Pexels

Feng Xiaoyi also had a profitable mobile phone store in Huilai, Guangdong. In the past it was common for young people to gift phones to elders, and children often used their lucky money to buy new smartphones, Feng told the Chinese newsletter QQ. "It was so busy ... that the store was constantly packed," she said. Now business is down and she is uncertain about the future.

A store owner in Shandong told Sina Finance: "Running a small phone shop before 2017 was great. "I used to source products myself. It was exhausting, but customers would come in as soon as the phones are in stock."

"Now I can barely sell a few phones a week. I have been doing this for over a decade, but the last two years have been the slowest. I want to quit, but I’m too old to find other work, and so I just hang in."

Chengdu’s Taiheng South Road was once a major phone retail hub that was packed with stores selling Apple, Huawei and Oppo products. It also had small shops offering phone accessories and repair services.

At its peak this short stretch of road accounted for 70–80% of Chengdu’s mobile phone sales, and often seen as a counterpart to Shenzhen’s Huaqiangbei electronics market. The vibrant scene is now a thing of the past, with empty stores and not much footfall.

The small phone shops spread rapidly from cities to rural areas, helping domestic brands like Oppo, Huawei and Xiaomi reach remote regions and drag people into the smartphone era.

The sudden spike in smartphone demand also fueled the rise of massive retail chains like D.Phone. In 2015 D.Phone had over 3,000 stores nationwide and saw 100 million visits a year. But its store numbers have steadily declined, falling to 1,500 by 2019 and just 600 as of July 2025.

Jiang Hui, a mobile shop owner in Zhejiang province, told Sina Finance that profits per device had dropped from over 400 yuan to just over 100 yuan, and his profits fell as a result from over 500,000 yuan annually to just 100,000 yuan.

"Around 30% of small and mid-sized phone shops have shut down [in his county]."

Fei Fan, brand director of a phone company in Zhejiang, told QQ that he believes the era of brick-and-mortar phone retail is ending. "Many stores opened in the past year and have already shut down. They rush in, then rush out."

According to Titanium Media, while the pandemic did slow consumer demand, a shift in how people shop is what phased out small phone shops across China.

They are unable to compete on price with online sellers. With pricing becoming more transparent, their older and dubious sales tactics are failing to exploit customers’ lack of knowledge: For instance, a store might list a phone at 1,000 yuan but charge an uninformed buyer 1,500 yuan.

Brands like Apple, Samsung and Huawei are also switching to sales via malls and online platforms. Mall stores stand out more and offer a premium shopping experience to younger customers.

Consumers in rural areas are also turning away from local shops. As local economies evolve, more people from small towns prefer to buy big-ticket items like phones in the city.

Retailers like Xu have been forced to adapt. He began by matching online prices and livestreaming to sell products. He also began to focus more on customer service, paying attention to shoppers' needs, explaining product features in detail and recognizing returning customers. For loyal customers, he even offered loans or took phones as collateral.