Shanghai Bund - photo courtesy melissatreek.com
Landed in Shanghai on Monday evening and took in a night stroll along the Bund. Then a fun glass elevator ride up to the Vue Room Bar for a look at the Shanghai skyline. Impressive. A veritable rainbow of Bund lights shimmer across the water as the glimmering tour boats glide by.
Tuesday I hired a guide and did a bit of sightseeing. I dropped by JG Ballard’s former childhood home (some background > here) and opened my wallet at the Shanghai Silk Museum. They give you an excellent “hands on” tour of silk making, from cocoon to the final product. Naturally there’s an incredible showroom with elaborate silk fabric designs and screens. I’m not a big shopper but I couldn’t resist. I’m shipping back a gorgeous emperor’s comforter cover and pillowcases. They saw me coming.
Wednesday was back to iPhone market research in Shanghai. Rebecca, my Shanghai guide, dove me to a Suning Store with a Gome Store across the street. Neither had the iPhone, and the managers of the electronics departments could not tell me whether there was any future plan to sell the iPhone in their respective stores. This response is mostly par for the course, Carrefour and Best Buy in Beijing the noted exceptions. My take is that Unicom likely has plans to expand iPhone distribution beyond their Wo Stores and Unicom mall store affiliates, but only in select cities (NOTE: Non-Unicom distribution partners will only sell non-subsidized off-contract iPhones). Update: It’s now clear why Gome and Suning are not selling iPhones > READ
Next stop in Shanghai was the flagship Wo Store located in the Unicom Tower. I attempted to snap a photo once we entered but the guard insisted we respect the “no pictures” rule and I holstered my camera. That’s too bad as this store had really superb iPhone signage, banners and marketing materials prominently on display. Apple would be happy and all other handset manufacturers perhaps a bit miffed.
The staff in the Unicom Tower store were friendly and answered Rebecca’s (my) questions as best they could. We followed the same basic mystery shop ruse as in the Beijing tour … Rebecca was interested in upgrading her iPhone 3G to a new 3GS. Since I was buying the iPhone we both needed to learn more about the features/benefits. Rebecca translated all questions and answers.
The Unicom flagship store staff gets high marks for congeniality and clear/direct responses to questions … but they score a bit lower in salesmanship. As in Beijing, the Unicom staff are not doing much to counter the sticker shock of the official iPhone. I had to ask three different sales staff about the complete list of apps that would come pre-installed on the iPhone for China. Not one employee at any of the dozen or so Wo Stores or Unicom affiliates that we visited in China was able to answer this question … but finally success. An employee opened a drawer and produced a spec-sheet (not a customer brochure) apparently for internal use only. I asked if I could have a copy and she was gracious enough to provide it to me. There are fifty (50) total apps, specially focused on China users, that are pre-loaded on the iPhone for China. Very cool! In my opinion China Unicom should take this spec-sheet, redesign it a bit and make it into a sales piece or large banner.
I asked the Unicom store staff again about downloading apps, the Apple App Store and iTunes accounts. The good news (and this goes against reports some weeks back) is that the Apple App Store is indeed very easy to find on the official China Unicom iPhone. There is no need to change settings to find the App Store icon and/or to launch the Store. The bad news is that there are no alternative means to pay for app store purchases other than the current mode … you must set up an iTunes account using a major credit card. Most in China do not use credit cards. Many are beginning to use debit cards but the majority are issued by banks not covered under iTunes. My guide Rebecca is one of new generation in China who are not intimidated by online purchases and credit cards. She proudly showed me her own credit card.
Despite Rebecca’s relative savvy, she had never set up an iTunes account and had only the factory installed apps on her legally unlocked (albeit smuggled into PRC) iPhone from Hong Kong. When I showed her the many dozens of apps on my iPhone 3GS her eyes lit up. Yes, there’s a whole new world out there. It has been my observation that the majority of Chinese who have grey-market iPhones have yet to download a single new app. China is a land of Microsoft XP users, and they’ve learned to fear downloads as they’re often the source of malware and viruses. This fear is largely irrational when it comes to iPhone … but the fear still exists.
As we were grilling (in a nice way) the Unicom store employees, a young man appeared from another part of the store. It was evident that this gentleman was the most technically adept member of the staff. He and Rebecca exchanged a few words in Mandarin. He sensed that we were not typical iPhone shoppers and wanted to know if we were from Apple. I smiled when she translated. “No, I explained, I have some interest in Apple and iPhone and doing some writing about it, but we are not from Apple.” He smiled and then asked to see Rebecca’s iPhone. He explained that he could check the settings and IME and determine if her iPhone could be ungraded without the risk of “bricking” (a problem for many jail-broken iPhones). A few screen taps and he delivered the good news. He could help her right here and now to load the latest iPhone software update – 3.1.2. He then tethered her iPhone to a (excuse me while I gag) Dell computer and launched iTunes. I remarked how “beautiful this flagship store was, but I think it would look so much better with the new 27-inch iMacs.” He again smiled and responded in English “Yes, I know MacIntosh computer very beautiful.”
All and all our one-hour stay at the flagship Unicom store was a very positive experience. Knowledgeable and friendly staff and they went out of the way to answers our questions and provide service.
Now it was time for some fun … Off in search of Shanzhai and grey-market iPhones. We hopped in a taxi and Rebecca directed the driver to an old Shanghai theatre that often featured Chinese acrobatics shows. The theatre doors were all open and I could see some petite leotard clad girls on stage in the midst of rehearsals. This was a truly strange venue for a black-market operation … My guide must be mistaken (or so I thought). Rebecca directed me to follow her upstairs to a balcony area. There were several non-distinct (unmarked) side doors. She knew right where to go and knocked on a rather inconspicuous looking door. A young Asian woman opened up. We struck gold! This backroom had several adjacent rooms and was much larger than I expected. It was completely filled with Shanzhai goods. All of the brand names had a knock-off version in this makeshift store. I am woefully ignorant as to the top end brand names but there were several European tourists picking over the Shanzhai designer goods (purses, women’s accessories, etc). “You wan Rolex watch?” the young saleswoman asked. “No thank you … I use my cell phone to tell time.” … “Do you have iPhone?” I asked “Ah, no problem,” the sales woman responded in surprisingly good English. She directed us to an adjacent room were the electronics were housed. She showed us a glass case with the “iPhones.” I only saw one iClone in Beijing, but I encountered many in Shanghai. This store had it all. Some of the most laughable iPhone wannabes you can imagine, including an iPhone nano. The sales woman explained that these were “not real iPhone … they fake, but even better than real one.” I bit my lip and resisted a reply. She then opened the glass case so that I might have a “hands on” look at a USD $266 iClone.
Shanzhai iPhone Nano in Shanghai
The problems with all of these “iPhones” were immediately apparent. The most glaring deficiency is the touch-screen. They all had latency issues, and often did not recognize a touch, even with significant pressure. The model I was inspecting also froze (screen lock up) almost immediately. The saleswoman took the “iPhone” (iClone) from my hand and performed an elaborate series of corrective measures to unfreeze the screen before handing me back the phone – “You see I fix … no problem.” Oh really? A few more swipes and the screen froze up again. She was trying so hard to make an effective sales pitch, but she too had to smile at how horribly the demo was going. In a word, these iClones suck! The UIs are abysmal, the screens are unresponsive and they are very evidently prone to lock-up on a whim. I can’t imagine people owning these junk heap knock-offs.
Pirated software aplenty
Realizing that an iClone sale was not likely in the cards, my sales lady asked, “You wan software?” She then opened up a drawer containing all manner of pirated software – XP, Vista, Windows 7, Adobe, etc. You name it they had it. I said thanks, “I’m an Apple user” … “Sorry, we no have Apple” she replied. Well thank goodness for that.
Just at that moment something interesting happened. The wall opened. That’s right, the wall that was stacked to the rafters with knock-off goods, was actually a secret doorway. It opened up to reveal another room. “Holy moly, what’s this?” Rebecca explained that this secret room, about the size of your typical Starbuck Store, is where they kept the really good quality Shanzhai goods … the ones that you could not tell from the real thing. Thankfully there were no “iPhones” in that hidden room.
The theatre black-market was fun, but the day was not done … Off to Cybermart in Shanghai. Glad we made this trip. The Cybermart is a large warehouse store filled with many different sub-stores. Electronics goods everywhere! The infamous Apple “Authorised” Reseller stores (they are NOT authorized by Apple) had their own area and plenty of iPhones were on display. Just about every other electronics/mobile phone sub-store had an iPhone on display.
We sat though a particularly good demo of a real grey-market 16GB iPhone 3GS. The sales rep was the best I had encountered thus far on my trek through China. He answered all questions and gave a very effective pitch as to why we should buy his iPhone versus the “official” China Unicom iPhone. WiFi and price were his leading sales points, but he also made a compelling case as to why his store would back up the iPhone with their own warranty. They had been in business for 11 years at the same location and had a record of good customer service … or so he claimed. He almost had me believing.
Shanzhai iPhone at Cybermart Shanghai
We also saw a very good iClone at Cybermart. You can’t tell by the photo (at right) because the icons/UI are very evidently not Apple. Yet, when the phone is powered-off, and you hold it in your hand, it looks very much like the real thing. Only a trained eye can tell the difference. To his credit the salesman explained up front that this was not a real iPhone.
Sidebar: Interesting that Cybermart had sub-stores selling Shanzhai iPhones … Why? Because Cybermart is owned by Apple’s manufacturing partner Foxconn.
And thus ended another day of official + black/grey market iPhone sleuthing. Off for some sightseeing.
Special thanks to Rebecca for being a delightful and knowledgeable guide/interpreter.
Next stop is Hong Kong!
iPhonAsia Travelogue series (Beijing, Shanghai and Hong Kong):
- iPhonAsia Travelogue Part 1: Wheels down in Beijing
- iPhonAsia Travelogue Part 2: Getting Oriented in Beijing
- iPhonAsia Travelogue Part 3: Into the heart of darkness – shopping the Beijing iPhone blackmarket
- iPhonAsia Travelogue Part 4: No stop signs in Beijing – The Shanzhai ji counterfeit culture
- iPhonAsia Travelogue Part 5: Secret rooms with hidden Shanzhai treasures (Shanghai)
- iPhonAsia Travelogue Part 6: Warming up in Hong Kong
- iPhonAsia Travelogue Part 7: The Hong Kong iPhone market
