US home appliance giant, Best Buy, is leaving the Chinese market, selling its Five Star subsidiary there to a local group.

Five Star, which Best Buy acquired in 2006, operates 184 stores in China. They are identical to the ones that have made the company a fortune in the United States but face stiff competition from online outlets.

Five Star will be bought by real estate developers the Jiayuan Group.

Best Buy did not disclose terms of the transaction but said on Thursday the sale should not have a significant impact on its earnings.

The Wall Street Journal reported months ago that Best Buy was reconsidering its future in China and said Five Star was worth about $US300 million ($A324.59 million).

Best Buy will however keep a foot in China by continuing to market its house brands such as Modal (mobile phone accessories), Dynex and Insignia (TV sets).

The sale will allow Best Buy to concentrate more on its North American activities, Best Buy said in a statement.

Best Buy has long been dominant in the US market but is fighting online outlets which have lured away many of its customers.

AFP