The accident took place at Xiangzhu Township, Yongkang City yesterday when the shop owner, surnamed Chen, set off a firecracker for trial but ignited the fireworks stored outside the shop, state-run Xinhua news agency reported.
The victims included three children and two adults.
Injured people have been hospitalised and are in stable condition.
Chen has been detained by police.
A total of 138 cities across China this year banned fireworks due in part to concerns over personal safety.
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