Shanzhai

Description

From the Wikipedia:

"Shanzhai (simplified Chinese: 山寨; pinyin: shānzhài) (alternative spelling shanzai or even shan zhai) refers to Chinese imitation and pirated brands and goods, particularly electronics. Literally "mountain village" or "mountain stronghold", the term refers to the mountain stockades of warlords or thieves, far away from official control. "Shanzhai" can also be stretched to refer to people who are lookalikes, low-quality or improved goods, as well as things done in parody." (http://en.wikipedia.org/wiki/Shanzhai)

Example

"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.

The market for "shanzhai" cell phones is not only in China, but also in the surrounding developing countries in Asia, and Third World 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. First, they do not buy cell phone manufacture licenses from the Chinese government, thus saving all the related costs. Second, the Taiwanese company Mediatek has developed a complete chain of core technology support for cell phones to sell at a much lower cost than the traditional suppliers of large cell phone companies like Nokia and Motorola.

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." (http://en.wikipedia.org/wiki/Shanzhai)

Discussion

See Kevin Carson at http://blog.p2pfoundation.net/shanzhai-flexible-manufacturing-for-the-next-generation/2009/09/28

How Shanzai manufacturing is related to the minipreneurial Maker Revolution

Chris Anderson:

"The term shanzhai, which derives from the Chinese word for bandit, usually refers to the thriving business of making knockoffs of electronic products, or as Shanzai.com more generously puts it, “a vendor, who operates a business without observing the traditional rules or practices often resulting in innovative and unusual products or business models.” But those same vendors are increasingly driving the manufacturing side of the maker revolution by being fast and flexible enough to work with micro-entrepreneurs. The rise of shanzhai business practices “suggests a new approach to economic recovery as well, one based on small companies well networked with each other,” observes Tom Igoe, a core developer of the open source Arduino computing platform. “What happens when that approach hits the manufacturing world? We’re about to find out.” (http://www.wired.com/magazine/2010/01/ff_newrevolution/all/1)