Huaqiang North Siege

Shenzhen, Huaqiang North. In a counter on the third floor of the digital city, the boss Dayrong coldly to receive a customer who came to pick up the goods.

"This phone, 500 units, outside the single, how much money can take?" "The customer stands outside the counter, launches the film in the hand, exposes a handset."

Dayrong stretched his neck and glanced at it: "235."

"Not interesting enough!" I asked somewhere else only 233. You give a 230. ”

Daronglen smiled: "230 do not come down." ”

After a few haggling and a client pretending to go, Dayrong jerked out his cell phone and made a phone call. After a minute, the phone hangs up: "How much do you want?" ”

"500 units. "Customer answers, Dayrong on the calculator quickly pressed a few, casually nodded, said can press 230 yuan a deal."

"For Indonesian and Thai." "The customer points the counter with the right index finger and turns away.

This is China's largest shanzhai distribution market daily hundreds of thousands of transactions in the ordinary one. It can be expected that, after one months, the 500 phones will appear in the hands of users in Southeast Asian countries.

For the past five or six years, such scenes have been happening every day. Just past the front desk customers crowded, now become empty. The overall sales of Shanzhai machine is not reduced, according to market research company ISUPPLI Statistics, 2010 China's mobile phone total shipments will reach 175 million, the past few years has maintained growth. But the industry has now become oppressed and dynamic.

This change is basically synchronized with the rise of the iphone and Android smartphone. When the user needs only a mobile hardware itself, the cottage to use a beautiful shell, the use of fancy, exaggerated some of the features, coupled with low enough price can win the market. But when smartphones attract customers through a set of ecosystems, the Shanzhai machine has yet to find a solution. At present, Huaqiang North more than 85% of the Shanzhai machine, are sold abroad, the Chinese users of the market share, only about half of the peak period.

The word "shanzhai" comes from "Shenzhen". Early because manufacturers dare not on the phone on the department name, can only print sz two letters, over time was shouted into a cottage. And there is no doubt that Huaqiang North is the main nest of mobile phones. The industry rough estimate, currently in Huaqiang North has about 2000 cottage hand manufacturers, the highest peak of more than tens of thousands of homes.

In all the "Made in China" label products, Shanzhai machine is also called a unique business phenomenon. Part of its behavior is the edge of the law, but its industrial chain is no lack of such a legitimate, regular large companies, but also from the Shanzhai machine manufacturers to have their own mobile phone brand of Tianyu Lanton. In the low-end mobile phone market, Shanzhai machine manufacturers to understand the needs of users, functional innovation, production cost control capacity, but also enough to make Nokia and other mobile phone giants embarrassed.

Both in China and in the international market, Shanzhai machines have a staggering market share. According to the consultancy Gartner Report statistics, in the domestic unknown g-five mobile phones, 2010 years of sales to become the world's top 10 mobile phone sales, beyond the many domestic well-known brands. In the Indian market, G-five is ranked second in the market share, after Nokia.

Shanzhai machines are losing the Chinese market. Now rely on the international market when demand weakened, to huaqiang north of the cottage industry chain will be a fatal turning point. Shanzhai is bound to shift to intelligence, but as of now, MediaTek has yet to come up with a smart-phone solution that combines performance and price advantages. Huaqiang North, which started out as a creative spirit, has entered the most innovative practice, most of the company's day-to-day products, or to imitate the iphone shell, built-in a spent years of the non-intelligent movement.

In this boring time period, also is brewing the phenomenon of the emergence of cottage machine the biggest changes since the birth. When the market finds a way out, Huaqiang North will also redefine the player rules. In the current strain, stick to the market waiting for change to come, wash the white identity of their own operating legitimate brand.

Repented

such as Dayrong, such as the counter of the self-employed, is huaqiang north of the important stronghold of gold, but also the most characteristic business model. As long as one of the most humble calculator, an accounting book will be able to form a business façade, although only 35 square meters, but does not affect the small owners to sell their mobile phones to Pakistan, Dubai, Bangladesh and other countries. In Huaqiang North, there are more than 20 electronic shopping malls, each layer of the mall has been divided into hundreds of counters, forming a honeycomb-like structure.

But Huaqiang North has become the national and even the world's focus of the electronic Business circle, not in the store culture, but in the Dayrong behind the hidden a large and complete electronic industry chain, but also here is connected to Zhongguancun and other electronic shopping circles do not have a large number of manufacturing base. 2007, Huaqiang North defeated Zhongguancun, wearing the "China Electronics First Street" Laurel. In the range of statistics, the annual turnover of Huaqiang North is already more than hundreds of billions of yuan, but hundreds of billions of revenue there is no one can calculate how much.

Shanzhai economy is difficult to make a language clear, but this industry chain of innovative elements have been frequently mentioned. Handset makers are one of the leading actors. They rented an electronic building in Huaqiang north of some obscure room, but the series of mobile phones from the scheme design, ID design, mold development, procurement, assembly, such as the entire industrial chain, the threshold for the integration of cell phone manufacturing greatly reduced.

Cheng is one of the CEO of a mobile phone integration company. He and his peers have received the Shenyang government to the local operation of the invitation, but not willing to leave this seemingly crowded, but have the most perfect mobile phone manufacturing matching business circle. "Large to the motherboard, shell, small to screw, label, in Huaqiang north of a circle a mobile phone came out, not a local industry mature, perfect degree can exceed here." ”

"The cottage is not the ultimate way out, one day will be on the right track, or sooner or later be eliminated." "After 2 years of cottage business, Cheng has" gone straight ", to the mobile phone license plate into the net, and registered two trademarks, foreign trade once done booming.

If the Chinese cottage industry, can overnight from the operation to the brand completely "see light", and still maintain its efficient, innovative ability, nature is a good thing. But the transformation of hundreds of millions of industries is not just a part of the bosses ' decision to change. And every process is out of the legal fuzzy zone, whether it can bring price competitiveness, still full of doubt.

Business is not so good to do, otherwise no one will want to make a change. Seeing has arrived at noon, the small boss in the electronic market Cai Caixicai into the first floor of million Shang Hui. At this point, most of the counters in the mall have been opened, but there is no customer. Three or four years ago, the mall would be a lot busier than it is now. The aisles are crowded with customers, and every business is booming. After the store closes, they have to be at the factory at two or three O ' night, waiting in line to grab the goods, otherwise they won't sell. The so-called factory, but also located in a building in Huaqiang north of a residential.

The prosperity has been maintained for two or three years. After that, Cai Kaisi's business gradually faded down. He clearly did not expect a lucrative business 5 years ago, and now faces the risk of being eliminated from the industry at any time.

Dayrong in 2007 years ago, Agent brand Computer lost a sum of money, he was anxious to find another way out, a look around to do a mobile phone business all hair, think also didn't want to plunge in-do this line, very few people have complete business plan. In his words, he has been revolt, "where to think of the future of mobile phones, can quickly make money on the line." ”

Now in Huaqiang north to sell mobile phones, the vast majority of such as Dayrong, such as small businessmen. Do not know the industry prospects, do not care about technology development, which products sell to go into which kind of goods, drift. Dayrong Lucky, in the beginning when the mobile phone, reportedly the rise of the entire Huaqiang north of the mobile phone's mobile phone no less than hundreds of, peak period tens of thousands of potential, but who also can not tell the number, "mobile phone manufacturers are not registered, their own casually up a name, convenient for customers." The company went bankrupt and got a purse to go at any time. ”

Despite the sale of mobile phones, but Dayrong himself with a Nokia brand, "the signal is not good." ”

Like Cai Kaisi, Dayrong's business is harder to do every day, but he is not in the industry's decline, "the competition is too fierce, now 20% of the mobile phone profit will be fatal." "Dayrong said," Now are doing a few dollars of business, even sell 100 units a day, can only earn hundreds of yuan, and now there is no that amount, the former more than 10 pieces of 20 profit, a day to earn thousands of dollars. ”

Cottage Paradise

In Huaqiang North Business district, any industry has no secrets, a new product listing good sell, a few days later there are a number of imitation, self-employed these opportunistic gold, can only rely on sensitive reaction to follow the market direction. "People who sell products will never be eliminated, and we will sell what the factory produces." "Dayrong also do not know that they do not do this line what can be done," business is like gambling, do a few more years to see it. ”

His intentions are not long term, but they are practical. Huang Jianhei, chairman of the Huaqiang North Chamber of Commerce, counter business model has tended to fall, but also restricts the development of China's north one of the short plate, to maintain sustainable competitiveness, the "China Electronics First Street" signs, one is the change of business model, we must minimize the proportion of counter operations, from the scattered counter to centralized counters, Thirty or forty counters are made into several counters to cancel out the duplicate varieties.

People who have been to new Asia, Huaqiang, or any one of the electronic shopping malls may be maze in the counter, and it is difficult to find what they want, because the brand overlaps, the types of goods repeat, can only be asked around luck.

But if according to Huang Jianhei idea, take the road of the brand counter, this will undoubtedly sacrifice a large number of small bosses, Dayrong not happy. "To be withdrawn?" "He was surprised to ask, silent for a while, shook his head," so for many years so, really let us out, "he sneered, seems to comfort himself," is expected to be chaos, can not be removed. ”

"The self-employed do not have long-term consideration, I have been talking to them, now the transition pains do not make money, a few years later, you survived the family, and began to make money." "The self-employed have developed habits that will not change easily," Huang Jianhei said. However, large shopping malls can be planned in advance, do not do is your decision, the store to attract investment without counter form there will be no counter operation exists, one aspect of the pain is a variety of interests intertwined. ”

These self-employed players, more than they can dominate the future of the cottage industry. Cheng-Gao's mobile phone company is located in a building in the north of Huaqiang office. Seven hundred or eight hundred square meters of space, gathered forty or fifty employees, research and development, procurement, sales, administration, finance departments readily available. The company officially registered in Gongshangsuo, with two registered trademarks, hundreds of thousands of mobile phone sales, the export of Dubai, Yemen, Bangladesh, India and other countries, is Huaqiang North, a small number of relatively formal mobile phone integration manufacturing company.

But Cheng is low-key and unwilling to be open to outsiders because the company also started out as a shanzhai phone.

Before 2006, Cheng engaged in the petrochemical industry. A chance in 2006, he heard a friend say that the cottage was very good to sell, the profit is very high, then to Huaqiang North turn a few laps, soon be crowded, each other grab goods of the enthusiastic trading scene shook, although he did not know anything about the electronics industry, but he decided to plunge into the mobile phone industry. He had only studied in three years and did not understand English, but claimed to be particularly sensitive to the term "money".

"Do not know can learn, but business opportunities can not be missed." "Cheng just entered the time, from morning to night in the market, no one to teach him, while doing business while learning," you can only deal with them, while their own groping, in this industry soaked, naturally understand. What we do is integrate business, but it's very simple. ”

The emergence of Shanzhai phones, all relying on MediaTek, Taiwan, they provide the main control chip of the mobile phone, MTK put the key components of the mobile phone-chip, OS and application software triple packaged marketing, for handset manufacturers to provide the most convenient one-stop solution, so that the technology threshold for mobile phone manufacturing plummeted. "With this chip, in Huaqiang North, making mobile phones becomes as easy as saving computers." Farmers can do as long as they have the money. ”

But at the end of 2006, Cheng-Gao's mobile phone company was just beginning, still limited by the design company. The early scheme design company, only Mirs, Himton and so on a few. As the industry has just started, the project design of the industry is not mature, the most critical technical personnel are basically the two companies monopolized. "To do business with them, you have to take the money before delivery." Before doing business, you need to pay a deposit in good faith, the other take the goods need to give 30% of the deposit, the goods must be in the agreed time in batches, each need to pay a batch of money. Otherwise sincerity gold may be deducted. ”

At that time the project design company in the industrial chain of the right to speak a lot. Because even a small design company, the technology is not mature. Cheng dare not take this risk, at least large companies abundant supply, to ensure timely delivery, small companies can not guarantee. At that time, speed is money. Mobile phone replacement quickly, large companies can guarantee 3 days that delivery, Cheng know the money price.

The situation to the end of 2007 has improved, the first batch of mobile phone program designers trained staff, began to come out of their own business. In the 2008, Mirs and other advantages gradually replaced by some small companies, Cheng no longer need to look mirs their face. The competition in the design company's industry has made mobile phone integration manufacturing companies pick up the bargain. Not only the product stability is guaranteed, but also the speed, the price, the output has the superiority.

The design of the scheme is the most important part of the mobile phone's integrated manufacturing, but it does not make a steady profit in this industry. Into the project design, failure is also the scheme design. Program Company is responsible for the design of the motherboard and procurement parts, if sold well, manufacturers are going to take the goods, if not sold, procurement costs, technical staff pay a fee for this money dozen water drift. If the technology is immature, the handset sells out two or three months to have the problem, so the real loss is the mold, the fitting. In addition, the reputation of the industry has become worse, the company's future is worrying-in this industry, plagiarism or imitation of others, will not have any impact on your credibility, but if you mess up the client's list, your reputation will stink.

Profiteering is difficult to continue

Mobile phones three or four years ago, because the cost of cheap low-cost, strong demand, market participants are still not much, the profit can be as high as 200%. But the rich-north-China model is controversial. The origins of Shanzhai machines are not clean, and those who make their fortune seem to be entangled in criticism. But in private, do the Chen Yantao and Cheng mobile phone line High, do not think there is nothing wrong with mobile phones.

Although 2008 is still the heyday of mobile phones, but compared with their peers, Cheng the feet. Do not always make money in the business, the lucrative mobile phone industry will not continue, see around the body jumped into the industry more and more people, he has a sense of crisis, decided to jump out of the cottage, the brand. But even on the normal development track, the company's operation as before the "original ecology."

Now, the company has completely withdrawn from the domestic market, the main foreign trade business, monthly shipments to the Middle East, South America, Southeast Asia mobile phone hundreds of thousands of units. But this industry, not in the early, money can be victorious, sometimes with a penny want to come in to gamble a person, also may be because of the one or two best-selling mobile phone and embark on the road of Fortune. Also some veteran will be in several mobile phone on the somersault, win or lose only in the line between. Cheng Hand also out several failed works, because "the appearance is not good enough." ”

A high exit does not affect the enthusiasm of the newcomer. A mobile phone is the easiest game for a capital chaser with a surplus of cash and a chance to take risks, MTK let entry threshold lower, mold development cost also from the initial five hundred thousand or six hundred thousand down to a hundred thousand of, supporting supply chain more and more perfect, in a small scale industrial park, can even be equipped with a mobile phone all the spare parts needed. At this point, the mobile phone industry involved in the competition is only the appearance of design and other technical content is not high link. As long as the appearance of beautiful, is the best-selling and profit protection.

Most of the mobile phone is imitation Nokia, Samsung and other brands, nothing more than the shape of a button to change the position of the antenna and other small changes. However, Shanzhai phones also open the door to personalized customization. Only 10,000 special orders, small companies can also design production, they rely on the style of impulse, low-cost, earn more and less can be flexible regulation. But for Lenovo, Tcl and other brands of mobile phone manufacturers, this is almost impossible. The cost is huge, no hundreds of thousands of or even millions of the amount, the profit can not guarantee, will not start production line.

Unlike Cheng, Chen Yantao has made up his mind not only to create a brand, but even to do it for another two years. His mentality is similar to the vast majority of Shanzhai businessmen who have fished fast. Buy a network card needs six months to a year, but also to hundreds of thousands of yuan, not to mention, the application of a licence, brand also need a strong capital base, to make a brand at least hundreds of millions of of the capital. This is obviously too inefficient for a combat style accustomed to fast forward and fast forward. It is not because the industry is not good, he even thought that the cottage has at least more than 10 20 years of development time. "It's too much trouble." He gave a compelling reason.

Huaqiang north of the public secret is that the Shanzhai machine is basically all in Shenzhen or the surrounding factory production. A cottage machine from the development to the real listing, only need 1.5 months. In 2002, this process will take six months, 8 months or even 1 years. Before making a mobile phone, hit the mold to 1,800,001 pairs, two or three months, now 12 days, 100,000 pieces can come out a new mold, there was No 10 million can not do, now 1 million will be able to start. Huaqiang North Business Way, is more than a few friends know the partnership, each out of a two hundred thousand or three hundred thousand, seven or eight people can get together to do mobile phones.

At least it sounds like a very simple business, even with the garment-processing industry across the Pearl River Delta and the Yangtze River Delta, where the players in the chain of Shanzhai industries have faded their aura from the technology-tinged handset industry. After they pulled down the barriers to the manufacturing of big mobile companies, the entire cottage industry became completely competitive. But Huang Jianhei that the Chinese cottage industry itself has the ability to build new competitiveness, but for practitioners, "the unconscious will fail and the conscious will succeed." ”

JONGSI, global entrepreneur Reporter

Source: Global Entrepreneur Magazine