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6 | Wednesday, February 3, 2021 HONG KONG EDITION | CHINA DAILY CHINA Commerce Huaqiangbei trades computer chips for lipsticks “China’s Silicon Valley” is getting a makeover as retailers ditch digital deals and opt for beauty products. Zhao Yimeng reports. n recent years, Huaqiangbei, a sprawling electronics hub and symbol of Shenzhen, Guang- dong province, that was once Each stall receives Idubbed “China’s Silicon Valley”, has about 3,000 orders a become the nation’s biggest whole- day. On the first floor, sale high-end cosmetics market. Covering several blocks in Futian the fee to reserve a district, Huaqiangbei is home to stall has risen to 1 dozens of markets packed with stalls that once sold cellphones and million yuan.” electronic components in bulk. The Huang Saibao, area also acted as a matchmaker for Huaqiangbei merchant businesses and suppliers across Guangdong, China and even Asia. By the end of last year, nearly 20 percent of the stalls that once sold “In 2014, we had to find a way out phones, computers and electronic as the markets were 30 percent components were packed with Lan- empty, which indicated that devel- come lotions, La Mer creams and opment in the cellphone industry MAC lipsticks. was limited,” said Lin Xu, manager The daily sales value of cosmetics of Mingtong Mall. can reach 4 billion yuan ($619 mil- Before entering the cosmetics lion), according to Huaqiangbei sector, many Mintong vendors tried merchant Huang Saibao. selling smartwear and trading via WeChat mini programs, but to no Crackdown avail. However, early last month, the “While doing research, we acci- area’s vendors were hit by a market dentally discovered that the people rectification campaign launched by who gathered to buy beauty prod- the local customs and police, which ucts in Japan and South Korea were forced the temporary closure of most mostly Chinese. We sensed the big of the cosmetics stalls. market and adapted our strategy,” On Jan 5, local customs started an Lin said. inspection of the cosmetics malls fol- The tide turned. The transforma- lowing a General Administration of tion of Mingtong started in 2017, Customs’ crackdown on gangs linked closely followed by several other to cross-border e-commerce plat- malls that had once focused on cell- forms, which smuggle goods into the phones and components. Chinese mainland to avoid import A cosmetics stall at Huaqiangbei in Shenzhen, Guangdong province, in late 2019. LIU YOUZHI / FOR CHINA DAILY taxes. Questions of authenticity Large amounts of goods suspect- “These cosmetics products are ed of being imported illegally — 1979 Jan 7, 2021 chants, inventors and entrepre- Statistics, cosmetics sales from Jan- cheap, but are they genuine?” including beauty products — were Three weapons manufacturers Most of the cosmetics stalls in neurs jostled in the hallways to uary to October totaled 256.9 bil- That’s the question almost every seized, while 36 suspects were merge to become the Huaqiang the area are closed under the shop for components to make new lion yuan, a year-on-year rise of 5.9 consumer asks. It’s a fair one, too, arrested, according to China Central ("Strong China") Group. crackdown. products. percent. Overall, retail sales fell 5.9 given the speculation a decade ago Television. In 2007 and ’08, when the dealers percent over the same period. that Huaqiangbei was full of “fake The total value of the goods 1980 Dec 28, 2020 only accepted cash, there were usu- “As Chinese people pursue high- phones”. exceeded 600 million yuan. The Shenzhen Special Economic CCTV reports local police and ally five or six people waiting in line quality lives, the demand for beauty Lin said Mingtong’s manage- A public relations official at one of Zone is established. The area customs seize large amounts of at each ATM to withdraw money, products is booming,” Huang said. ment insists that retailers immedi- the malls told online financial news near Huaqiang Group is called goods, including beauty products, sometimes extremely large sums. ately vacate the mall and even the platform 21jingji that stallholders Huaqiangbei. suspected of being imported In early 2019, Huaqiangbei’s flag- Focus shift entire Huaqiangbei area if even a had been ordered to fill in accounts illegally. ging smartphone market forced The initial success of Huang and single consumer complaint about books and provide purchasing Huang to adapt his business strate- other pioneers spread quickly in fake goods is upheld. records as required by the govern- 1981 gy, and the situation remained Huaqiangbei, which led retailers Huang Saibao agrees with the ment. Construction begins on a hub 2017 uncertain last year in the light of who had bought electronic goods harsh punishment. Veteran stallholder Huang was called The Electronic Mansion. Huaqiangbei fully reopens. demonstrations in Hong Kong and from them to follow them into the “All our products are genuine. No unaffected. “My goods are imported Two years later, more than 50 Imitation cellphones are trade frictions between China and beauty products sector. stallholder can afford to risk factories are built within the area through legal channels, but my trade disappearing from the scene. the US. Lu Lin, a merchant in Huaqiang- destroying their reputation and covering more than 1 square with stallholders in the cosmetics Mingtong Digital City Market “The electronic products we bei’s Yuanwang Digital Mall who business by bringing in even one kilometer. becomes the first to enter the malls has been suspended recently,” bought from the US, especially has worked in the area for 15 years, illicit product,” he said, adding that cosmetics and beauty products he said, adding that he had no idea business. iPhones, were seized by US customs said the retailers see no difference the cosmetics business is so lucra- when things would return to normal. 1988 as ‘sophisticated instruments’ (a between computer chips and lip- tive that there is no point cheating Located on a crossroads in Hua- The Seg Electronics Market in focus of US complaints),” Huang sticks. customers. qiangbei Commercial Street, Huaqiangbei becomes China’s 2013 said, adding that stricter border “They are all profitable goods. So Despite that, Lu Lin has adopted Huang’s stall is highly visible to pas- first electronics market. More controls resulting from the COVID- although the merchants, mostly a wait-and-see attitude toward the sers-by and retailers visiting the than 160 businesses from the Construction begins on a new 19 epidemic have blocked supplies. men, know little about cosmetics or transition. Since he started his area to replenish their stock. Chinese mainland and 10 from subway line for the area. The work Despite the problems, Huaqiang- beauty products, it’s still a profita- business in 2006, he has been sell- Hong Kong join the market. blocks access to roads for four “After several thousand orders years, severely hampering trade bei’s merchants are proud of their ble business,” he said. ing cellphone components and were placed at one time, last year’s at Huaqiangbei. Meanwhile, ability to spot opportunities and So far, at least seven multistory smartphones in Huaqiangbei. sales volume reminded me of the 1999 emerging local brands such as their fast reactions to ensure they malls in Huaqiangbei that used to “My strategy is relatively con- glory days,” the 42-year-old said. Huaqiangbei is transformed Xiaomi, Oppo, and Vivo begin to grab every one. sell electronics are now wholly or servative as I don’t have enough His customers include retailers from an industrial zone into a dominate the local smartphone Huang’s wife has been a daigou, partly occupied by cosmetics startup capital for a cosmetics stall from the nearby Mingtong Mall, commercial street. As the market. or freelance retail consultant, for 10 retailers. and it’s risky to lend money. which was the main target of the nearest mainland port to Hong years. As a former outbound tour- The first to make the change was Although the electronics market is rectification campaign, along with Kong, it quickly monopolizes the ism guide, she is familiar with over- Mingtong Mall, where merchants shrinking, I still make a profit,” he cosmetics’ livestreamers and ven- cellphone supply chain. 2011 seas duty-free shops and the in the 1,300 stalls work from 10 am said. dors from Alibaba’s Taobao stores. The Shenzhen Market Regulation market price of cosmetics. to 2 am catering to the huge “It’s hard to claim that every The COVID-19 epidemic has ham- 2003 Bureau launches a crackdown on “We decided to take advantage of demand for cosmetics to the exclu- beauty product in the market is cellphone copies. pered many independent buyers Chip card technology spreads our professional knowledge of cos- sion of all other goods. genuine. The merchants here who used to travel overseas to pur- within the area, starting the era metics products to advance within Cosmetics traders cram into always want to make money.” chase cosmetics at duty-free shops, of inexpensive, imitation 2008 the sector,” Huang said. Mingtong Mall, their stalls over- Having experienced Huaqiang- while the emergence of live- cellphones. At just several Huaqiangbei is awarded the title The couple bulk-purchase profit- flowing with famous imported bei’s ups and downs for more than streamed e-commerce has catalyzed hundred yuan, the phones of "China's No. 1 Electronics able goods from duty-free shops at products such as Chanel and Estee 20 years, Lin said cosmetics only the booming market in Huaqiang- quickly become popular with Street" by the China Electronics a wholesale discount and sell them Lauder. account for 20 percent of total busi- bei, according to Huang. purchasers. Chamber of Commerce, and is a far more cheaply than dealers at Sellers make phone calls, check ness at most, and despite the cur- He opened his stall, which has a popular electronics hub in China shopping malls on the Chinese WeChat records to confirm orders rent soaring demand and huge “golden position” at the corner, in and even across Asia.

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