Shanzhai (Chinese:山寨; pinyin:shānzhài; Cantonese Jyutping:saan1 zaai6; Vietnamese:sơn trại) is a Chinese term literally meaning "mountain fortress" or "mountain camp", whose contemporary use usually encompasses counterfeit, imitation, orparody products and events and the subculture surrounding them.[1]Shanzhai products can includecounterfeit consumer and electronic goods, which can involve the imitation and trademark infringement of brands and companies.[2] The term's modern usage grew around 2008 whenshanzhaismartphones reached their greatest domestic use.[3][4][5] Today, some relate the term withgrassroots innovation and creativity rather than with falsehood or imitation.[6][7]
The termshanzhai was first used for its literal meaning, which referred to defensible mountain forts and strongholds, usually in areas on the outer reaches of imperial government control. During theSong dynasty (960–1279),shanzhai came to describe groups of bandits who opposed and evaded the corrupt authorities to perform deeds they saw as justified. One of the most well known uses ofshanzhai in this way is in the storyWater Margin.[1]
Shanzhai goods are often regarded as rebelling against the established commercial market, adopting the spirit of opposition and individuality that the term was originally associated with during the Song dynasty.[7][8] Someshanzhai products are created with the intent to deceive buyers,[9] although others are created with features not included in their respective authentic counterparts,[7] or are created out of jest or parody (such as theCCSTV New Year's Gala).[10] Unlike counterfeiters, producers ofshanzhai goods typically do not conceal the nature of their product and purchasers are generally aware of the true nature of the goods.[11]: 230
Typicalshanzhai products include imitators of high-end electronics and fashion products that imitate the visual appearance and function of leading brands.[11]: 34
During the early-2000s, early instances ofshanzhai production began, mostly with simple counterfeiting of electronic goods includingDVD andMP3 players in cities such as those in thePearl River Delta.[12][5]
In the mid-2000s, more advanced products such as smartphones were being created, with varying levels of skill and quality, leading to the termshanzhai being applied to counterfeit goods. By the end of 2006, it is estimated thatshanzhai mobile phone manufacturers accounted for around 30 percent of the domestic phone market in China.[13]
In 2009, it was reported thatshanzhai mobile phones could be sold for about $100 to $150USD, while production costs were only about US$20.[14]
In 2010, theFinancial Times estimated thatshanzhai phones accounted for about 20 percent of the global2G mobile phone market.[15] Demand for these 2G-erashanzhai mobile phones was not only in China, but particularly in developing countries inAsia,Africa, andLatin America as well.
The prevalence ofshanzhai phones is usually attributed to their low price, multi-functional performance, and imitations of trendy mobile phone design. Althoughshanzhai companies do not use branding as a marketing strategy, they are known for their flexibility of design to meet specific market needs.[1]
However,shanzhai is not limited to mobile phones. AsYu Hua explains:[16]
Once copycat cell phones had taken China by storm, copycat digital cameras, copycat MP3 players, copycat game consoles and other pirated and knockoff products came pouring forth. Copycat brands have rapidly expanded to include instant noodles, sodas, milk, medications, laundry detergent and sports shoes, and so the word "copycat" has penetrated deep into every aspect of Chinese people's lives. Copycat stars, TV programs, advertisements, pop songs,Spring Festival galas,Shenzhou 7 space capsules andBird's Nest national stadiums have all made a splash on the Internet, each revealing their own special flavor and gaining instant popularity.
Reflecting the interests of customers, someshanzhai companies reflect politics and culture through their products, often alongside parody. One of the most well-publicized examples of this was duringBarack Obama's 2008 U.S. presidential election campaign, when someshanzhai mobile phone companies began to include Obama-based themes in their goods and advertisements.[6] Also in 2008, some shanzhai products were based on theBeijing National Stadium andFuwa in light of theBeijing Olympic Games that year.
Since the 2010s, there has been a decrease in the prevalence ofshanzhai products within China. Although some groups and individuals do still make replica or fake versions of popular products, the growth of well-established domestic companies producing low-cost and/or high-quality electronic goods has eclipsed much of the market for counterfeit goods. Groups that do counterfeit domestic companies are also often subject to legal repercussions for their actions, while the counterfeiting of foreign goods is much more difficult to prosecute.[9][13]
Another reason involved in the decline in shanzhai electronics may be related to the transition ofMediaTek to producing chips for more established companies such asXiaomi andOppo, rather than just for the general consumer market. During the 2000s, manyshanzhai mobile phones used MediaTek chips, since they were inexpensive and were widely available.[15] This transition has made it more difficult for small groups to produce smartphones and other popular electronic products to the same extent that was possible from 2003.[5]
Shanzhai manufacturers are often attuned to the local market and add features to their products consistent with local needs.[11]: 230 The addition of these grassroots features has helpedshanzhai manufacturers increase the public's perception of their legitimacy.[11]: 231
Due to the growth of internet access in China, websites have been created that attempt to spoof real ones, some with the intent to scam. In 2019, theMinistry of Public Security reported that since 2016 more than 5,000shanzhai websites had been shut down, alongside 16,000 online groups, and 20,000 accounts. Some of these were said to include deceptive wording in their names, with terms such as "Central" (中央;zhōngyāng) "China" (中国;Zhōngguó or中华;Zhōnghuá) and "National" (全国;quánguó) used to imitate real government websites and users.[20]
The legality ofshanzhai products varies.[11]: 230 Many products involve illegal forms of copying or design appropriation.[11]: 230 Others exist in a grey area where it is unclear whether they violateChinese intellectual property law.[11]: 230 Part of this lack of clear legal status results from China's first-to-filetrademark registration system.[11]: 230 Trademark registrants do not need to demonstrate their prior use of a trademark.[11]: 230 Manyshanzhai manufacturers have registered their trademarks and until such marks are challenged in court by the more well-known brand, their legal status is arguable.[11]: 230 In some cases brought by foreign brand owners like New Balance, Air Jordan, Brooks, and Muji, theshanzhai manufacturers have prevailed because they registered their similar trademark first.[11]: 230
In January 2011, the ChineseMinistry of Industry and Information Technology and theState Administration of Industry and Commerce announced a crackdown onshanzhai phone sellers and manufacturers. The administration blamed "money-stealing" services that used the cheap phones to steal services using customers' SIM cards. Industry commentator Liu Sheng said that it was more likely to be linked to the country's intellectual property rights protection campaigns.[21]
E-commerce platformPinduoduo has been significantly criticised in domestic Chinese media for sellingshanzhai products.[11]: 34 After it was listed on theNasdaq stock exchange in 2018, China'sState Administration for Market Regulation announced probes into the firm based on reports of counterfeit materials available on the platform.[11]: 34
China's 2018E-Commerce Law makes platform companies jointly liable for counterfeit goods sold through their platforms if they have prior knowledge of such sales.[11]: 231 These liability risks have caused platforms to be stricter in their view ofshanzhai products.[11]: 231
The subculture surroundingshanzhai both covers the subculture that developed among groups producingshanzhai goods, such as in the Pearl River Delta, as well as a more generally-supported subculture based on parodying popular franchises and trends.
Some of the most well-known events include theCCSTV New Year's Gala, Shanzhai Lecture Room (山寨百家讲坛), Shanzhai Olympic Torch Relay (山寨奥运火炬传递), and Shanzhai Nobel Prize (山寨诺贝尔奖). One thing these events have in common is that they all imitate high-end, popular yet authoritative events in which grass-roots power usually has no participating role.[22]
Shanzhai movies are another profit-drivenshanzhai phenomenon. These movies usually have low budgets, yet achieve commercial success byparodying, making fun of or borrowing elements from high-endHollywood blockbuster movies. One of the firstshanzhai movies isNing Hao'sCrazy Stone. It imitates the multi-angle shooting, rapid cutting and stunts that are usually used in Hollywood action movies, yet it retains a grass-roots set up.[citation needed] With only a $3 millionHKD budget,Crazy Stone achieved a box office revenue of $22 million HKD.[23]
In theWestern world in countries such as theUnited States,shanzhai products are often viewed as humorous fakes due to their common use of misspelled or comical names imitating those of real companies. Generally, shanzhai products are viewed in the West as low-quality, cheap, and fake.[4] The influence of this view ofshanzhai goods has led to the perception among some that all Chinese-produced goods are low quality or are fakes of foreign goods.[6]
Shanzhai products are negatively perceived by many companies whose products have been counterfeited, both in China and abroad. Within China, companies such asHuawei andLenovo have faced issues of smaller companies and groups counterfeiting of their goods. Although electronics companies are most prone to this kind of counterfeiting, other industries have faced competition fromshanzhai companies as well.[24]
However, philosopherByung-Chul Han describesshanzhai products as having their own value and benefits:[25]
[Shanzhai cellphones] are actually anything but crudeforgeries. In terms ofdesign and function they are hardly inferior to the original. Technological or aesthetic modifications give them their own identity. They are multifunctional and stylish.Shanzhai products are characterized in particular by a high degree of flexibility. For example, they can adapt very quickly to particular needs and situations, which is not possible for products made by large companies because of their long production cycles. Theshanzhai fully exploits the situation's potential. For this reason alone it represents a genuinely Chinese phenomenon.
In 2019, the Jinhongye Paper Group successfully won a lawsuit against the Hangzhou Fuyang Paper Company for theirshanzhai version of one of Jinhongye's products, which was regarded as an improvement in commercial protections. Jinhongye produces high quality paper marketed as Qingfeng (清风;qīngfēng), which Hangzhou Fuyang imitated in their sale of paper similarly marketed as Qingfeng (清凤;qīngfèng). After a ruling by theHangzhou Internet Court, Hangzhou Fuyang was forced to pay 1 millionRMB to Jinhongye and to stop marketing their paper as Qingfeng.[26]
Business analyst Michael Zakkour believes the phenomena ofshanzhai reducesforeign investment in China, discourages foreign companies from marketing copyable products there, and deters them from using Chinese services and technologies that might result in theirintellectual property being copied.[27]
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