3. E-commerce a new force of distribution

Chinese telecom operators have been cutting down subsidies on smartphones since the second half of last year, in part to improve financial performance as the subsidies are not tax exempt. As a result, the IDC expects the market share dominated by carriers to reduce to 31 percent by the end of 2015, while e-commerce platforms will sell more than 20 percent of smartphones. Retail outlets will share the leading role in cellphone sales with online shopping sites.

A Chinese netizen browses the website of the Redmi Note, Xiaomi smartphone in Tianjin, Mar 19, 2014. [Photo/IC]