Xiangyang Market Redux -- China Counterfeiting Keeps On Ticking
Xiangyang Market lives.
Though Shanghai's original Xiangyang Market was shut down in March of this year, it appears it has sprung up again, in a more upscale form, right on Shanghai's Nanjing Road. I learned of this from a comment left on China Law Blog by the West Peavine blog, which did this post, entitled, "Like Bopping Gophers," rightfully analogizing the shuting down of Chinese counterfeit markets to bopping gophers in the amusement park game.
According to West Peavine, the new market quarters are "bigger and better:"
Most of the counterfeiters have moved into a modern multi-storied building on Nanjing Road, the center of the shopping district in Shanghai. The same retailers and ripped-off intellectual property is now for sale in air-conditioned comfort instead of in the crowded lanes of Xiangyang. Trying to put an end to the counterfeiters business is like playing the popular amusement park game where you bop plastic gophers that pop out of holes - others just pop up somewhere else.
I won't give the address of the new location because I don't want to help them but one can easily spot the place by the super-aggressive fake Rolex, DVD and handbag touts that descend upon foreigners who happen to walk by. The touts assume foreigners are in the area to visit the "New Xiangyang" and want to beat the brick & mortar counterfeit dealers to the prey. I discovered the new location when I visited a restaurant in the area and couldn't get out of the taxi because the Xiangyang-style touts surrounded the car before I could even open the door.
West Peavine goes on to note that since "China is awash in fake products. One new Xiangyang is just a drop in the ocean." Not surprisingly, Xiangyang's Market's old location still has some curbside vendors selling counterfeits to foreigners who go there without realizing it is no longer there.
Comments (8)
Read through and enter the discussion by using the form at the endlance Webel - October 18, 2006 5:55 AM
Yes, I was there last week ... they're holed up into apartments in the back alleys too. Instead of directly advertising themselves or coming to find customers, they have an intricate system of "agents" out on the streets. From what I gathered, these agents are independent ... they'll gladly take you to as many shops as they can until you buy something, at which point they probably make a preset commission.
The shop owners are also quite sly ... they hired fake shoppers, played good cop/bad cop, knew enough English to dupe somebody, and even were smart enough to change tactics when they noticed that you were onto them. They were much smarter than your average retail salesman, that's for sure.
I spent about two hours one day with a couple "agents" who took me and a friend into about 8 different shops. We didn't buy anything, but I had a blast testing the water, bargaining and getting a feel for how this underground economy and culture worked. It's fascinating!
Hubert Shea - October 18, 2006 8:18 AM
It is extremely difficult, or impossible, for the government to shut down counterfeit markets in Shanghai and other cities in mainland China. Significant problems exist with enforecement of intellectual property laws because of lack of coordination amongst government ministries and agencies, inadequate administrative penalties, lack of civic education and the prevalence of corruption. Leaders from the Central Government have already emphasised the importance of intellectual property protection to economic development.
Brand owners from the West are expected to continue playing the cat and mouse game with counterfeiters.
China Law Blog - October 18, 2006 11:28 PM
Mr. Webel --
Thanks for checking in.
Fake shoppers? What will they think of next? Actually, I know, and it is going to be the subject of an upcoming post.
China Law Blog - October 18, 2006 11:29 PM
Mr. Shea --
Thanks for checking in. I concur.
David Li - October 19, 2006 2:05 AM
taobao.com is the new Xiangyang market. One can find almost all counterfeit, third shift and other goods on Taobao.com. Taobao has outperformed Eachnet (eBay's Chinese branch) so much rumors were flying around about eBay's retreat from China and Meg Whitman had to address it. (http://today.reuters.com/news/articleinvesting.aspx?view=CN&storyID=2006-10-18T220413Z_01_N18407740_RTRIDST_0_TECH-EBAY-CHINA-URGENT.XML&rpc=66&type=qcna ). However, when a CEO of public company uses the statement "We are committed to China for the long term." That's Wall Street speak for "We have no idea when we can turn profit?" ;)
Taobao is a subsidiary of Alibaba which Yahoo! just invested $1 billion for 40% of the stake. I think this is the underhyped Internet story. Yahoo! Japan's auction is also full of counterfeit goods. As it turned out, it's legal for Japanese to bring home small number of counterfeits from oversea.
Speaking of the central government's ability to enforce IPR. One thing can't be found in counterfeit market or Taobao is the merchandises for 2008 Olympic. The problems with enforcing the IRP for foreigner companies are there is nothing to gain for the governments. The MNC are coming out with their own way to deal with IRP problems in China like Warner releasing DVD for $1.50 (http://www.gizmodo.com/gadgets/home-entertainment/warner-combats-chinese-pirates-with-150-dvd-169000.php ) or two French firms suing each other (http://www.forbes.com/business/feeds/afx/2006/04/19/afx2682374.html ).
China Law Blog - October 19, 2006 8:31 AM
Mr. Li --
Thanks for checking in. Sounds to me as though you are fluent in Wallstreetese.
Counterfeiting online is, of course, very hard to police. I read somewhere once that something like 75% of all "Tiffany" jewelery being sold on eBay is fake. It is interesting how the Chinese government seems to be doing such a good job in stopping Olympic counterfeits.
David Li - October 23, 2006 4:53 AM
Well, as long as we are on the subject of fakery and piracy... Can you guys in the US write to your government restrict official visits to China? The recent string of visits by Gutierrez, Villaraigosa, and Rice has forced Beijing and Shanghai governments to put on a anti-piracy show. DVD shops are getting bursted and a couple DVD shop bosses are retained. I just had a chat with the neighborhood DVD shop keeper, she said the raid parties are mostly lead by foreigners this time but expect life to get back to normal in a week.
David Li - October 23, 2006 5:08 AM
Speaking of online piracy sales in the US, I had a conversation with a friend while in L.A. He put the complete X-File collection he got in China on eBay. He got an email from Fox's legal department with in hours of posting the auction asking him to take down the auction and my friend did. The inconvenience of dealing with that outweigh of the money. He used to work for a P2P company and they also encrypt all their personal stash of MP3, whether they ripped from their own CD collections or downloaded. I think Hilary Rosen of RIAA's legal strategy of taking the poor grandma to court has worked well to create a widespread shadow of fear. RIAA will go after individual instead of just the P2P business and that really makes people think twice before download illegal media.
The same widely broadcasted shadow of fear has worked for Beijing's control to the piracy of Olympic goods. All pirates expect Beijing to come down with harsh treatment for Olympic piracy and collectively not to pirating them.
Or it may be those Olympic figures are just simply too ugly to have a good market value. I got a set for my daughter and she won't even play with them. Only Bo and Laa-Laa (of Teletubbies fames) get to go to her tea party.