By Daniel Hui and Fang Gong

From push to pull: That, in a phrase, defines the evolution of China’s mobile phone retail market.

In the “push” era—up to about 2005— people just wanted a phone, and there were few choices of brands and technology. Consumers basically bought a famous brand and went home. If it was not exactly shooting fish in a barrel, it was about that simple. The retail situation was relatively straightforward; the key was to get consumers to see your product and then to execute at the point of sale.

But with the introduction of the smartphone and the emergence of major new brands into the market—think Apple, Samsung and LG, as well as local players such as Oppo—phone makers began to have to pull consumers in. The cycle time between purchases has also shortened, putting a premium on brand loyalty.

Retail conditions on the ground are also changing, in particular the way that people buy their handsets. In 2008, as much as 71% of handset sales were sold at fragmented retailers such as small telecom store chains or independent and small mom and-pop electronics stores. By 2014, we estimate that these channels, at most, will account for less than half. Who is likely to pick up market share? Operator stores, consumer electronic stores, and—fastest of all—e-commerce.

Let’s take a look at each of these.

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