Inside China's biggest gadget market

Most of the world's consumer electronics are produced in the Chinese city of Shenzhen. CNN's Matt Rivers tours the bustling shopping district Huaqiangbei with hardware hacker Andrew 'Bunnie' Huang.

Posted: Nov 25, 2018 3:07 PM
Updated: Nov 25, 2018 3:17 PM

At the Huaqiangbei Market in Shenzhen, you can build a smartphone from scratch in a couple of hours.

Spread over several floors and covering hundreds of thousands of square feet, the market is home to vendors selling the parts that make up your standard phone — cameras, motherboards, frames, screens and so on. All you have to do is buy the right bits and know how to put them all together.

And it's not just smartphones. You can find the parts here for almost any consumer electronics device you can think of, like portable power banks and drones.

To be sure, there is copycatting going on here. The designs of Apple (AAPL) or Samsung devices are regularly ripped off. Intellectual property rights, one of the US government's biggest bugbears with China, are nonexistent. But there's invention at work, too. Some people are trying to use the parts to come up with new and improved versions of existing gadgets.

The whirling, chaotic market highlights how innovation sometimes works in China. Experts say viewing the country as just a vast manufacturing base for products designed by foreign companies is outdated and misguided.

"There's a ton of innovations at a huge scale that are happening in China," said Christian Grewell, a business professor at NYU Shanghai. "They are just happening very, very quickly and without the knowledge of the rest of us."

He pointed to how smartphone maker Xiaomi has updated its software based on user feedback, and China's rapid adoption of digital payments through Tencent's (TCEHY) WeChat app and Ant Financial's Alipay.

Hardware hub

Once a tiny fishing village in the shadow of nearby Hong Kong, Shenzhen is now a glittering metropolis of more than 12 million people.

Along with other cities spread across Southern China's Pearl River Delta, it rose to prominence in the 80s and 90s as the world's factory floor, pumping out boatloads of industrial and consumer products. But today it's also widely known as China's answer to Silicon Valley, the home of tech giants like Tencent and Huawei.

Shenzhen has become a magnet for ambitious young entrepreneurs seeking to take advantage of the city's position at the heart of global tech supply chains. It has produced startups like DJI, the world's top maker of non-military drones.

"If you have an idea, you can quickly evaluate this idea and find factories to manufacture the product for you," said Jasen Wang, CEO of tech education startup Makeblock.

The company produces kits that kids can use to build things like race cars and walking robots — and then program them. Makeblock's products and software are designed to teach children the language of computer programming in a fun way.

Shenzhen provides a ready supply of the hardware needed by his company, which was valued around $350 million in its last fundraising round. And it also has the human talent.

"There are so many big companies here, it's very easy to find hardware development engineers," Wang said. "You don't have that kind of advantage in Beijing or Shanghai."

Moving fast

Shenzhen also gets things done quickly.

"If you really want to develop products in a fast pace, I think you have to be in China — and practically have to be in Shenzhen," said Steven Yang, CEO of battery technology company Anker Innovations. "Anything you have to do in days or weeks elsewhere can be done in hours here."

Yang, a 36-year-old former Google (GOOGL) employee, has built Anker into one of the top makers of portable power banks for smartphones and other devices. It generated revenue of well of over $500 million last year, and its products sell on Amazon (AMZN) and at Walmart (WMT).

Ten years ago, Shenzhen was 90% about copycatting and 10% innovation, according to Yang. Now, it's 70% innovation and 30% copycatting, he suggests.

Foreign businesses agree that Chinese companies are upping their game.

In an annual survey by the European Union Chamber of Commerce in China, this was the first year that a majority of respondents said they view Chinese companies as "equally or more innovative than European firms."

Counterfeiting still rife

While genuine innovation is happening in Shenzhen, so are trademark infringement and intellectual property theft. The counterfeiting industry is still massive, with fake iPhones and Nike (NKE) sneakers prominently on sale.

Anker suffered from knockoffs in its early days, but authorities are gradually taking a tougher line on copycats, according to Yang.

"I think it's getting better year over year," he said.

The Trump administration remains unconvinced. It has cited Chinese theft of American intellectual property as one of the main reasons for the trade war between the two giant economies.

Experts say the Chinese government needs to do more if it wants to become a global tech powerhouse.

"China does want to see a few of their local firms take on world markets. And they are making lot of bets in various places" such as electric vehicles and artificial intelligence, NYU Shanghai's Grewell said.

"For China to go send its innovations overseas," he added, "I think it's got to fully join the international community in protecting some of that intellectual property."

Huntsville
Broken Clouds
79° wxIcon
Hi: 83° Lo: 68°
Feels Like: 81°
Florence
Few Clouds
80° wxIcon
Hi: 85° Lo: 70°
Feels Like: 83°
Fayetteville
Broken Clouds
77° wxIcon
Hi: 82° Lo: 68°
Feels Like: 79°
Decatur
Scattered Clouds
78° wxIcon
Hi: 83° Lo: 68°
Feels Like: 80°
Scottsboro
Broken Clouds
81° wxIcon
Hi: 82° Lo: 67°
Feels Like: 85°
WAAY Radar
WAAY WAAY-TV Cam
WAAY Temperatures

Alabama Coronavirus Cases

Confirmed Cases: 18766

Reported Deaths: 651
CountyConfirmedDeaths
Mobile2284118
Jefferson1884103
Montgomery182343
Tuscaloosa82216
Marshall7059
Franklin5788
Lee55834
Shelby52220
Tallapoosa43266
Butler41918
Walker3812
Elmore3729
Chambers35926
Madison3464
Morgan2981
Unassigned2972
Baldwin2929
Dallas2873
Etowah26212
Lowndes25912
DeKalb2573
Autauga2395
Coffee2391
Sumter2287
Houston2265
Bullock2156
Pike2080
Colbert1872
Hale1799
Russell1770
Barbour1771
Marengo1746
Lauderdale1692
Calhoun1653
Wilcox1547
Choctaw15310
Cullman1501
Clarke1492
St. Clair1311
Randolph1287
Marion12411
Dale1230
Pickens1215
Talladega1175
Limestone1080
Chilton1051
Greene954
Winston910
Macon874
Jackson833
Henry812
Covington811
Crenshaw783
Bibb761
Escambia753
Washington726
Blount631
Lawrence510
Monroe452
Geneva440
Perry420
Conecuh411
Coosa401
Cherokee383
Clay282
Lamar260
Fayette160
Cleburne151

Tennessee Coronavirus Cases

Confirmed Cases: 24833

Reported Deaths: 388
CountyConfirmedDeaths
Davidson542965
Shelby5428119
Trousdale13944
Rutherford132128
Hamilton93516
Sumner93146
Lake8350
Bledsoe6101
Williamson57711
Putnam5196
Robertson5165
Tipton4593
Wilson4428
Knox4365
Out of TN4264
Bedford2954
Montgomery2833
Rhea2140
Hardeman2010
Madison1732
Bradley1611
Unassigned1610
Macon1583
Loudon1570
McMinn14414
Cheatham1350
Fayette1252
Cumberland1191
Dickson1180
Maury1050
Sevier942
Blount933
Washington750
Coffee740
Monroe692
Wayne640
Gibson631
Sullivan602
Lauderdale591
Hickman580
Dyer570
Franklin541
Greene522
Unicoi480
Obion433
Hamblen432
Marion421
Anderson411
DeKalb380
Smith371
White340
Hawkins342
Marshall331
Lawrence330
Haywood332
Overton320
Cannon320
Grundy311
Henry310
Lincoln290
Jefferson280
Carroll281
Meigs270
Weakley260
Warren260
Perry240
Hardin222
Cocke210
Sequatchie190
Carter191
Johnson190
Jackson190
Polk180
Campbell181
Morgan170
Roane160
Crockett162
Humphreys151
McNairy150
Henderson150
Stewart130
Claiborne120
Chester120
Fentress120
Giles120
Scott120
Grainger110
Clay80
Houston80
Benton71
Moore50
Decatur50
Van Buren40
Union40
Pickett30
Lewis30
Hancock10

 

 

Community Events