Anyone For A Bucksstar Coffee?

On his latest trip to China Mark Hedley discusses the impact of the brand names of the western world and how the growing market of copycat products is helping to reinforce these global brands.

On one wet and rainy Sunday afternoon in Beijing last month, I decided to go and try to pick up a local Chinese gifts for friends and family back in Britain. Unfamiliar with the best shopping locations in the city, my hotel concierge recommended I take a stroll down to the pearl market, located just a few blocks away from my hotel. The market was overwhelming – a five storey building the size of a multi-storey car-park, packed full of small stalls selling all manner of traditional Chinese ornaments, memorabilia, clothing, jewellery and so on. This was the kind of place where you could buy everything from Chinese teacups, to aviator shades, knock-off golf clubs and a laser telescope.

Anyone that has ever visited China will be familiar with the noisy and irritating cajoling from sales girls with a minimal grasp of English and pushy attitude. Feeling like I’d walked onto on the floor of the New York Stock Exchange, I hastily beat a retreat towards the exit, until I was stopped in my tracks by what seemed to be an I-pad (that most coveted of modern gadgets) being sold for a draw-dropping $150 (about 5 times cheaper than those in the UK). Fumbling for my wallet in hasty excitement, I suddenly noticed that I was not looking at a genuine bona-fide I-pad, but was actually something called an ‘A-Pad’…

What is an A-pad? Well, to briefly explain, over recent years, China remarkable economic expansion has led to the gradual opening up of the consumer economy to a whole host of global consumer brands, from Apple, and Microsoft, to designer brands like Burberry and Louis Vitton. This booming appetite for branded consumer goods has also been accompanied by the rise of ‘Shanzhai’ phenomenon. A fairly recent phenomenon, ‘Shanzhai’ can roughly be translated as ‘Mountain Stronghold’ or ‘Mountain Village’ refers to near copies of famous brands or products, but where the brand name or design has been slightly altered or modified slightly from the original brand. The easiest place to spot this Shanzhai phenomenon is in China’s countryside, where many of the products are produced and sold at prices far below the original brands.

Originally shanzhai was mainly used to refer to the cheap mobile phones and digital devices produced in and around the manufacturing hub of Shenzhen. However, over time the concept has developed to refer to anything that imitates or spoofs a famous brand, and often contains more than a dash of rebellious humour. Some of the more amusing examples of include a southern fried chicken chain store named ‘KFG’, the ‘Buckstars’ coffee chain, and a search engine with a vaguely familiar web address: ‘Goojje.com’. There have been Shanzhai versions of Hollywood movies, Shanzhai celebrities and a Shanzhai version of the 2008 Beijing Olympic opening ceremony.

Although the Shanzhai phenomenon no doubt terrifies the vast majority of Western corporations keen to protect their intellectual property rights in China, if nothing else it does serve as an ironic reminder of the power of the brand to penetrate even the most remote and insulated of markets without any real marketing. In actual fact, rather than diluting the power of the brand, the Shanzhai versions actually serve to help to reinforce these global brands by duplicating and popularizing them with a large group of potential future consumers.

Over the next few years we will see rising incomes in developing markets like China, with more and more people lifted into the middle classes, and this should result in a growing number of companies shifting from Shanzhai consumption towards mainstream consumer culture. Although part an ironic rebellion at the high cost of luxury brands to the majority of Chinese people, more importantly the shanzhai phenomenon expresses the deep aspiration for material wealth among the Chinese peasantry that will one day reap huge rewards for Western brands that can learn to position themselves correctly.

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