Tracking the products, trends and reach of China's local to global tech culture.
DEFINITION: Shanzai [San-zai -alt. sp.Shanzhai] 1. mountain fortress/bandit 2. a vendor, who operates a business without observing the traditional rules or practices often resulting in innovative and unusual products or business models.
DEFINITION: Shanzai [San-zai -alt. sp.Shanzhai] 1. mountain fortress/bandit 2. a vendor, who operates a business without observing the traditional rules or practices often resulting in innovative and unusual products or business models.
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While most Chinese multinationals are focused on the larger international distribution channels to get their wares on shelves and into homes, the shanzhai distribution model has found success in the micro distribution model of traditional Chinese markets. Visit one of Shanzhen's bustling tech markets or digi-shopping centers and you'll find it heaving to the rafters with customers looking for clone phones, cheap notebooks, netbooks and above all, a bargain-priced piece of technology.
As of late 2008 and so far in 2009, we've witnessed these manufacturers increasingly turn their attention and manufacturing expertise to the mobile PC space, most notably the mini-note or netbook form factor. Despite some negative press about the rise of the shanzhai PC, this summer has seen record sales of these devices in China, and rising exports to India and other BRICK countries. This has tempted some major Taiwanese manufacturers to try the shanzai distribution model, opening stores in the markets in Shanzhen itself. Three Taiwanese companies have so far opened up stores in the key tech markets of Shezhen; MSI, Pegatron and MiTac. Without sounding disparaging, neither of these companies have torn up the stock market of late and they probably represent a growing coven of Taiwanese players who have suffered tremendously in the recent economic downturn - companies who are willing to dip a toe in the shanzhai waters across the strait. Taking advantage of this distribution model, these products are apparently available at lower prices to customers and dealers in the markets, available with or without branding. These devices will no doubt end up in China's smaller cities and rural areas via the dealers who service those areas. It would appear that shanzhai-style distribution is one sure way to penetrate China's markets. [Image Source] Related articles |
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All good points. It will be interesting to see what enrolls in this battle
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