Chinese Consumerism – Death of the Knockoff Culture

A recent LA Times article explores the phenomenon of plummeting knockoff phone sales as the number of smartphones skyrockets. While this article examines the economics of this shift, it fails to capture the shift in Chinese culture that has led to this outcome.

Anyone who has visited China is familiar with the 山寨 (shan zhai) culture. The clothes that most lower and middle class Chinese wear are simply imitations of Western styles from 5 years ago, made in local shops and sold at significantly lower prices. Popular tourist destinations include places like the Museum of Science & Technology subway station in Shanghai. Here, vendors hawk row upon row of knockoff goods.

“Hello friend! We have special deal for you! Gucci, Prada, whatever you want, we have!”

The products they sell are as fake as their enthusiasm and English abilities. Out of curiosity, I purchased a fake IWC watch for $10. What a surprise it was, when it stopped ticking and the minute hand became dislodged less than a month later.

However, the Chinese knockoff culture extends beyond just fake luxury goods. It permeates throughout the Chinese lifestyle. Fake food scandals are seemingly a daily occurrence, with news stories about tainted milk and reused cooking oil dominating the news. When Chinese people encounter a good deal, it is assumed that the deal is fake in some form or fashion. The inevitability of these scandals in daily life is deeply rooted in the frustration of a populace unable to accomplish social change.

The shift from acceptance to avoidance of the knockoff consumer culture stems from the differing viewpoints of Chinese society. The younger generation, brimming with optimism from increased opportunities, is no longer willing to accept the fake culture their parents resigned themselves to. While the stratified social classes still promote the worship of big brand names, the willingness to accept substitutes has all but disappeared.

I traveled to Shanghai for the first time in 2010. During this trip, it was plain to see the awe on the locals’ faces when they saw my authentic iPhone. When I lost my phone in a cab, I was distraught. However, I was somewhat mollified by the recognition that the relative value for me was significantly lower than its value to whoever found it. For many (such as a taxi driver), the value of this item was equivalent or greater than an entire year’s salary.

When I returned in 2011, I noticed the googly eyes I once got using the iPhone in public had all but disappeared. Many of my friends in Shanghai had purchased their own authentic iPhones and looked forward to their next luxury purposes. One thing the LA Times article fails to capture is the level of sacrifice made by many of these people to afford these items. One lower-middle class friend of mine spent over 1/10th of her annual salary on an iPhone. This shouldn’t come as much of a surprise, as China’s GDP per capita was approximately $7,500 in 2010 according to the IMF.

While it is true that the relative price of smartphones has dropped over time, the insistence of the younger generation for quality over cost is a marked departure from Chinese culture which has dominated in the past. Expect the youth of China to affect social change in all of China over the next decades through traditional capitalist means, their wallets. As China continues to embrace consumerism and capitalism, expect a resurgence in use of the Chinese idiom,

一分錢一分貨。

Simply put, you get what you pay for.

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