Shanzhai (山寨)

Shanzhai (山寨) refers to Chinese knockoff and pirated brands and goods, particularly electronics.  Literally “mountain village” or “mountain stronghold”, the term refers to the mountain stockades of warlords, far away from official control.
The use of “shanzhai” becomes popular with the outstanding sale performance of “shanzhai” cell phone. According to Gartner’s data, in the year of 2007, the sum of cell phone sale across the globe is 1.15 billion sets, and according to another data provided by the Chinese government, the sale of “Shanzhai” cell phone in that year is 0.15 billion sets, thus making up one tenth of the global sale.
The market for “shanzhai” cell phone not only lies in China, but also in surrounding developing countries in Asia or even third world countries in Africa. The outstanding sale performance of “shanzhai” cell phone is usually attributed to its low price, (usually lower than $50), multi-functional 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. An example of such is that during Obama’s campaign, “shanzhai” cell phone companies started selling “Obama” cell phone in Kenya, which has 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.
Prior to the booming “shanzhai” cell phone industries, since the early 2000 knock-off electronic products like dvd players, 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. Yet the fact that “shanzhai” cell phones stands out to be the most successful and most frequently discussed “shanzhai” products among them is arguably because cell phone strongly symbolizes a sign of wealth in china, and yet it is much more affordable than other symbolic signs of wealth like cars and apartments.
“Shanzhai” cell phone factories are able to manufacture at a very low cost because of two reasons. First is that they don’t acquire the cell phone manufacture license from the Chinese government, thus saving all the related cost. The second reason is that 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 mega cell phone companies like Nokia and Motorola.