Legend has it that over 50 self made Chinese billionaires bootstrapped their ways to success starting from 3 feet counters in Huaqiangbei, the emerging Silicon Valley of China.
Huaqiangbei, the legendary global electronics base with a fantastic maker’s ecosystem, how does the magic work?
The answer is quite simple: within half an hour of walking up and downstairs sourcing iphone parts you can easily build a new one from scratch.
A saying goes that a traffic jam in Huaqiangbei would cause price fluctuations in mobile phone, phone accessories markets in China, sounds like Butterfly Effect, isn’t it?
The legendary “First Electronics Street in China” has witnessed ups and downs of China mobile phone industry. During the “Gold Rush”, the first batch of self made Chinese billionaires starting humbly from 3 feet tiny counters, have bootstrapped themselves to self made billionaires along the way, including founder of Hasee Haijun Wu, founder of TP-Link Jianjun Zho, etc.
Today, after decades of striving for progress, Huaqiangbei is gradually getting rid of its “Shanzhai” culture that greatly contributed to its early success. With shift on technical innovation, now it’s not only a makers’ paradise, secret backyard of eCommerce players and also the forefront of “Huami OV”.
The war of flash sale: wholesale refurbished iphones
Feiyang Times Mansion, the largest refurbished iphone market in China, is consisted of four floors with the first floor dedicated to iphone parts, the second to ipads, the third to refurbished iphones and the fourth to second-hand iphones.
In Feiyang, as a rule of thumb, you have to rush to snag up some good deals. Once a batch of high quality refurbished iphones arrive, seller would send group notifications to their regular customers. Awei, a seasoned buyer and reseller in Huaqiangbei, stormed out immediately to the seller’s one meter counter, still was outpaced by other two competitors who have already made the purchases. Luckily there were still 30 pieces iPhones left that were stacked on the counter, Awei started to inspect every phone carefully and took the ones that qualified. More and more buyers rushed into the counter but in vain as the good deals were already snagged up, only refurbished iphones of poorer grades were left. This happens everyday in Huaqiangbei.
“A keen business sense plays a decisive role in profits”, said Awai. On 13th September, 2018, one day after Apple New Product Release Conference, Awai predicted that iPhone X would be soon a hot staple and snagged up almost all good quality iPhone X in the markets before other buyers came. As expected, in the afternoon, the price of iPhone X has skyrocketed and ran out of stock.
The legend of 3 feet counters
A tiny 3 feet counter with a one meter length, a safety deposit box, a calculator, an accounting journal and samples, you would definitely underestimate the prevalence of such counters in Huaqiangbei and the massive profits they generate. It’s estimated in average the daily transaction amount started from hundreds of thousand dollars. In 2008, when Huaqiangbei was in its heyday, the monthly rent of a good location 3 feet tiny counter could rent out at $40k per month. In 2009-2012, the electronics markets in Shenzhen were flourishing, everyday the markets were fully stacked with people and sellers didn’t stop working till midnight.
The killing of “Shanzhai” practices
Shanzhai, a reminder of Shenzhen electronics’ early success and a disgraceful tag entrepreneurs in Huaqiangbei are striving to get rid of, was prevalent in over 5,000 mobile phone dealers in 2008, with new Shanzhai phones appearing in the market almost everyday.
The “Golden Age” of Shanzhai started in 1995 when Nokia setup its first facility in Dongguan, the brand had over 40 suppliers in its heyday. The powerful ecosystem of mobile supply chain in Pearl River Delta has breezed a nutritious birth ground for Shanzhai phones. Shanzhai phones with multiple SIM cards, speakers and systems have sprung up. In 2010 when SamSung W899 was debuted, it came with an exorbitant price of US $2,099 while a Shanzhai phone from Huaqiangbei with similar functions and appearance cost only US $150.
Now, Shanzhai phones are gradually disappearing and rarely do people mention the word as frequently as before. There’re many factors leading to the crack down of Shanzhai phones.
* Chinese government’s crack down on counterfeiting products. In 2011, Shenzhen government has carried out a series of stringent measures, over 2,000 sellers involved in Shanzhai phones were dispelled from the market.
* The constant decreasing of prices by established Chinese smartphone brands like Huawei, Xiaomi, etc.
* The affordability of smartphones has gradually placed feature phones out of the markets.
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