Shanzhai is a Chinese term which refers to mountain stockades or villages that secluded bandits in need for a place to hide from authorities. These days, the word names particularly copycat electronic devices manufactured initially by small family owned factories (also referred to as shanzhai factories), developing to a disruptive and efficient ecosystem that filled up a gap for a market which could not afford the latest electronic trends.
The movement became popular when mobile phones hit the market, making the “shanzhai mobiles-phones ecosystem” acquire up to 20% of the sales worldwide. These phones were very similar to the original ones but faster to produce and cheaper to buy as they could be sold at very low prices compared to other phones.
Expectedly, manufacturing copied goods became a profitable yet innovative business, where factories collaborated and shared knowledge to come up with a product that would look exactly like an iPhone, but inside was made of hard-nosed hardware.
Xaomi is a great example of companies that took the shanzhai business model to scale. The company created a brand that expanded rapidly with their high-quality products made using the same principles, fast and low-cost production. Many experts agree this model will be very relevant to innovation in the hardware area. Big tech players like Intel are already investing in research and production of parts using as a base all the Shenzhen knowledge of the shanzhai ecosystem, hosting annually the Intel Developer Forum to explore this emerging market of the hackers of hardware.
Shenzhen became a hub for the shanzhai electronic goods. The massive HuaQuiangBei electronics market has become the most visited place to buy all imaginable electronic parts. Basically, heaven for anyone interested in building hardware.