Your Phone Might Be a Knockoff, But Should You Care?

From iPhones to sneakers, Chinese imitations are everywhere—but these products could actually be good for innovation


About a year ago, I joined frog's Shanghai studio on a personal mission to better understand the Chinese market, a market that has intrigued and inspired me for almost a decade.

China is in the midst of a modern-day Industrial Revolution, where the fortunes and reputations of the next generation of Carnegies, Mellons, and Rockefellers are being forged. But instead of the steel and oil of the past, you'll find tightly integrated circuit boards. Instead of steam, there is intellectual property and the Internet. And as with the Industrial Revolution of yore, old rules don't apply.

One important element of the innovation space in China today is shanzhai culture. The literal translation of the word is "mountain stronghold," an ancient holdover, but these days it refers to knock-off goods and imitation electronics. The quality of these counterfeits ranges from horrible to superb. You could find nothing more than a branded sticker placed on an outrageously badly designed product, or you could find a device that's you-can't-tell-the-difference excellent. The practice has been going on for long enough so that the shanzhai manufacturers are starting to outpace the markets that they originally aspired to. They're also bringing with them a degree of innovation that any futurist would be proud of.

Shanzhai is making perhaps its biggest impact in the mobile phone industry. As a whole, the industry sells 1.6 billion devices each year, and I have no doubt that shanzhai cell phone manufacturers in the Pearl River Delta are taking a healthy chunk of the share. But here's where it gets interesting: They're not satisfied with just copying. Shanzhai manufacturers are actually driving experimentation in the marketplace.

For example (and this has been going on for a number of years), shanzhai manufacturers are making dual-SIM-card devices that enable their users to support two operator networks on one phone, making communication cheaper for the user because he or she can bypass roaming charges. Mainstream manufacturers have only recently started offering these types of devices on a large scale. The result has been a global ripple effect, since dual SIM cards undermine the business models on which many operators are based.

Another area where shanzhai is pushing the boundaries is in speed to market. I've heard reports of products that are announced by western companies in China, where the shanzhai version has beaten the official product to market. This means bringing a knock-off product to market in a time window measured in days, whereas it might take the official version 12 months to produce and ship. By the time it turns up in retail channels, the official version, rather than the shanzhai copy, can be perceived as the fake.

The shanzhai spirit presents a conundrum for officials in China: On the one hand it plays to the strengths of local manufacturers, but on the other it reinforces the "anything goes" attitude that undermines China's desire to be treated seriously on the world economic stage. Shanzhai's next step is to stake a claim as one of innovation and ingenuity, unbound by the status quo. Over time, our assumptions about "Made in China" will evolve in the same way we thought about "Made in Hong Kong," "Made in Japan," and "Made in Taiwan"—not just in terms of what is made, but also how it's made.

The shanzhai spirit has pushed my fellow designers in Shanghai and I to reframe our assumptions about innovation, and how we work. It also leads us to ask the question, "At what point do the old rules not apply?"

Image: Bobby Yip/Reuters