The Knockoff Effect: Entrepreneurialism in China

 

Me and Baby at AP Plaza

Me and Baby at AP Plaza

A couple of months ago, I told my friend Jim Arpin that I needed to get a watch.  And he said:  “Howard, I know a watch guy,” because Jim has a “guy” for everything.  “And best of all,” Jim added, “he makes house calls.”  Of course he does, because this is China.  It may be a one-party, communist country, but the Chinese make the rest of us real capitalists look like complete slackers.  They hustle hard to sell pretty much anything you could ever want from the West.  Jim’s watch guy showed up at his apartment and it was suddenly like a Mary Kay party — guys oohing and aahing over Rolex, Brequet, Tag Heurer, and Patek Philippe watches.  I bought an Omega Seamaster Planet Ocean GMT44 that retails for $5,100 in U.S. Dollars.  I paid just under 3,000 RMB, or about $475 USD for it.  Now, I have no idea if my new Omega is real or a knock-off, but it looks and works like the real deal.  If it’s a knockoff, then it joins many things that we have purchased here in China that are fake.

Fake markets abound in Shanghai.  They are usually massive in size and contain lots of small stalls and shops, often within a maze of mind-bending corridors, and sell everything from clothes to electronics, toys to kitchen appliances.  And much of it is fake.  The products are manufactured to look like the real thing, but really they are just knock-offs.  I recently bought a pair of beats by dr. dre headphones for my oldest daughter from our favorite fake market, Shanghai’s Asia-Pacific (AP) Plaza.  Like my watch, they look like the real thing and perform well, though they recently suffered an unaccounted-for crack that has me questioning their authenticity.  Of course, the fact that they were dirt cheap should have tipped me off.

The Dr. Dre Beats in question, and the crack….

The headphones in question, and the crack….

AP Plaza is typical of many of Shanghai’s fake markets.  It takes up almost 6,000 square meters of space and is located beneath the Shanghai Science and Technology Museum, adjacent to Metro line 2 (2000 Shijie Da Dao).  There are hundreds of vendor stalls in the subterranean market, and on weekends it can be crazy crowded.  We go there mostly to have clothes made for the girls by our favorite tailor, Liz (lizdream@163.com, #K2-18).  She has made incredibly beautiful clothes for the girls, including traditional Chinese Qipao’s, fancy dresses for holiday’s, and even a Mexican-style dress for Stephanie to wear in her school play.  Sometimes we just walk in with a picture of a dress the girls want from a magazine, hand it to Liz, and by the next week the girls are wearing it out and about in Shanghai.

Cassidy and our amazing tailor, Liz

Cassidy and our amazing tailor, Liz

Which is the beauty of the fake markets here.  You can literally walk into any vendor’s shop with a picture of what you want, and within a week you will have a knockoff of whatever-the-hell it is.  Want a $4,000 Giorgio Armani tuxedo for an upcoming wedding?  Bring a picture of it to Samth’s Tailor at AP Plaza, then ask for Baby (I’m not kidding).  She will then measure you, have the tux made, and sell it to you for a few hundred bucks (zhouhai50@yahoo.cn, #K1-50).  Need a Ghurka Cavalier leather carry-on for an upcoming flight?  Head to the Hongqiao New World Pearl Market where they have that, and all the knockoff jewelry you will ever need (3721 Hongmei Lu, Hongqiao).

My sweet new Omega, and Stephanie just happy I finally have a watch.

My sweet new Omega, and Stephanie just happy I finally have a watch.

My wife has a very favorite purse and bag vendor at AP Plaza and I have been told, in no uncertain terms, that I am not allowed to identify them in this blog.  “If they get closed down, I will blame you,” she has said, dead serious.  So I won’t.  Karen and the girls have bought many bags and purses from this vendor by design labels like Stella McCartney, Gucci, Prada, and Longchamp, among others.  Well, at least that’s how they are badged.  On the inside of Karen’s newest Longchamp bag, the stamped text identifies it as a “Longchamptype” bag.  But it looks really good.

Karen and her newest Longchamp bag

Karen and her newest Longchamp bag

Our relationship with this bag vendor has progressed significantly in our two years in Shanghai, as we have purchased more and more product.  I can gauge our relationship by how much they show us, and where it is hidden.  The first time we went, they saw fresh Westerners coming from a mile away and greeted us at the door, then scooted us into a back room where the “good stuff” was.  As we all became more familiar over time, they would take us into the back room and then pull out hidden suitcases and trunks that contained the “really good stuff.”  Now when we walk in, the woman just pulls a remote out of her back pocket, presses a button, and a set of shelves along the wall opens inward to reveal a hidden room containing the mother load of designer bags.  We are all very tight now.

With the push of a button, the motherlode appears

With the push of a button, the motherlode appears

When Karen and the girls have finally chosen their designer bag haul (I once bought a wallet…), it is barter time.  In China, you barter for almost everything and, in many instances, it is considered rude not to do so.  Though I’m always the one coughing up the cash, Karen does the heavy lifting when it comes to bartering.  The process is always the same:  The nice lady whips out a calculator and with blazing hand-speed starts hitting buttons for about 15 seconds;  Next, she shows the calculator to Karen who looks at it for a second then shakes her head no and counters with a price about 80% less than that on the calculator.  The key to bartering in China is to be ready to walk away, no matter what.  Karen has done so with these ladies in the past, so by the end of their back and forth over the price, everybody usually comes to an agreement, and my ladies leave with really nice bags, at ridiculous prices.  It’s a beautiful thing for all, including me.

There are many other fake markets in Shanghai including Han City Fashion and Accessories Plaza (580 Nanjing Xi Lu), which dwarfs AP Plaza.  There also are markets that we expats refer to as fabric markets, that sell nothing but material to make clothes.  We go to Qipu Lu Clothing Market (168 Qipu Lu), where you can buy whole bolts of fabric, and which makes Mood from Project Runway look like a mom and pop arts and crafts store.  And speaking of arts and crafts, there is a whole street in Shanghai full of markets that sell only art supplies, real and fake. (Fuzhuo Lu, The Bund).

The madness that is the Buy Now PC

The madness that is the Buy Now PC Mall

Unlike in the U.S., where competitors rarely ever share sales space, in China retailers selling the same or similar products tend to group their wares into a big marketplace, then turn it into a free-for-all sales brawl.  The Buy Now PC Mall is an immense, 5-story building that houses hundreds of computer and electronics retailers (721 ZhangYang Lu, Pudong).  Competitors like Apple and Samsung are side by side, and often located very close to their knock-off rivals.  Like so much else in China, Buy Now is loud and overwhelming, buzzing with electronics, but you can get any kind of product you need and, after bartering, walk away with it having paid a relatively inexpensive price.

Stephanie in the pretty, Mexican-style dress Liz made for her play.

Stephanie in the pretty, Mexican-style dress Liz made for her play.

I said the Chinese hustle, and that is an understatement,  They push as hard as they can, selling both real and fake products like their life depended on it.  Maybe their life doesn’t, but their family’s prosperity and well-being usual does, and that’s the driver for most of them.  For Westerners frequenting the fake markets, it is bargain bonanza time.  I have heard stories from friends who have had visitors from America arrive with an empty suitcase or two in order to fill it with a new wardrobe to take home.  They are literally giddy that they can purchase and use or wear products that would cost thousands of dollars more in the U.S.  For the Chinese, it’s a “if you make it, they will come” scenario.  Though they generally won’t say so, many Chinese are capitalists to their core, and like so much of what the Chinese do, they do it very well.  I have a cool new Omega watch to prove that, and I didn’t even have to go to a fake market to get it, because it was delivered.  And if it really is a fake?  Well then the real one is clearly overpriced.

 

POSTSCRIPT:  We have finished our second year in Shanghai and will be coming back to the United States in just a few days.  It will be great to see our friends and family, but it is also bittersweet as we have to leave our Chinese friends for two months.  Not sure how much blogging I will do when we are in Michigan, but I want to say thanks to folks for reading Lost in Shanghai and the incredible amount of support I have received from everyone.  Your blog notes, texts, emails, and Facebook comments have been incredibly supportive and helpful, and I look forward to year three of the blog.  It should be another crazy year.  Thanks.

Advertisements

4 thoughts on “The Knockoff Effect: Entrepreneurialism in China

  1. Hi, Now that you are leaving Shanghai, any chance of sharing the address of the bag seller ? My wife will be most grateful 🙂

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s