Shanzhai - Shanzhai Products

Shanzhai Products

The use of "shanzhai" became popular with the outstanding sale performance of "shanzhai" cell phones. According to Gartner’s data, 1.15 billion cell phones were sold worldwide in 2007, and according to data provided by the Chinese government, 150 million "Shanzhai" cell phones were sold in the same year, thus making up more than one tenth of the global sales. In 2010 the Financial Times estimated that Shanzhai phones accounted for about 20 per cent of the global 2G mobile market.

The market for "shanzhai" cell phones is not only in China, but also in the surrounding developing countries in Asia, and developing countries in Africa and Latin America. The outstanding sales performance of "shanzhai" cell phones is usually attributed to their low price, multifunctional performance and imitations of trendy cell phone design. Although "shanzhai" companies do not use branding as a marketing strategy, they are known for their flexibility of design to meet specific market needs. For example, during Barack Obama’s 2008 U.S. presidential election campaign, "shanzhai" cell phone companies started selling "Obama" cell phones in Kenya, with the slogan "yes we can" and Obama’s name on the back of the cell phone. They also designed "Bird Nest" and "Fuwa" (福娃) cell phones in light of the Beijing Olympic Games.

Before the booming shanzhai cell phone industries, since the early 2000s, imitation electronic products like DVD players and MP3 players were already manufactured in the Pearl River Delta ("珠三角") area. Many shanzhai cell phone companies accumulated their capital in that process. After understanding that many buyers like lookalike phones, but didn't need blaring fake logos, many manufacturers adopted a practice of not using fraudulent logos, instead opting for a generically designed logo. So while an overseas buyer can easily find a lookalike phone, some sellers only sell those without the fake logo.

Shanzhai cellphones can be sold at very low prices compared to normal cellphones. On average, the imitations sell at retailers at about $US100-$US150, while production costs are about $US20.

Shanzhai cell phone factories are able to manufacture at a very low cost for two reasons, they do not buy cell phone manufacture licenses from the Chinese government, thus saving all the related costs.

Although there many fake garments, watches, bags, and shoes in China, they are not called "shanzhai" products, perhaps because these fake products came into existence earlier than fake cellphones and the newer use of the term "shanzhai". "Shanzhai" cell phones may stand out as the most successful and most often discussed "shanzhai" products, because cell phones strongly symbolize wealth in china, but they are much more affordable than other symbolic signs of wealth like cars and apartments.

Quite a few shanzhai cell phone companies tried to exploit the market by making shanzhai Netbooks, but these gained little market acceptance and sales.

"Shanzhai" electric cars, which run on lead-acid batteries and sell for as little as $US2000-$US3000, are being produced in the Shandong province.

In January 2011 the Chinese Ministry of Industry and Information Technology and the State Administration of Industry and Commerce announced a crackdown on shanzhai phone sellers and manufacturers. The administration blamed "money-stealing" services that used the cheap phones to steal services using customers' SIM cards. Industry commentator Liu Sheng said that it was more likely to be linked to the country's intellectual property rights protection campaigns.