DISPENCE

Counterfeiting merchandise is something China does well. From name brands on Silk Street in Beijing to US$1 DVDs on the street to electronics, China offers deal-seekers something of a candy store. But a good shopper in China will understand you get what you pay for. That 30 Yuan hat will probably not last until next winter and there’s no guarantee the DVD inside the case is what the cover indicates. Electronics share a big chunk of the counterfeit market but at the same time China is emerging as a world leader in computer development and manufacturing. Lenovo Group has grown to the fourth largest personal computer manufacturer in the world. But I could still find a questionable webcam for 50 Yuan.

In China, the manufacturing of electronics clash between world-class companies like Lenovo, to cheap unknowns selling everything from webcams to hard drives. Buyers expect expensive computers coming from reputable companies to fully function. The same can’t be said for cheap and/or counterfeit goods.
In my electronics life journey, I’ve come in contact with several Chinese goods. Right now I’m typing on a laptop bought form Lenovo. I just backed up my entire system on an external hard drive I bought from a Chinese electronics mega mall. There’s a headset and webcam sitting on my desk for Skype calls – bought here in China. And for bumping to good tunes, I have a three speaker setup I bought from the Lotus Center nearby.

Before I review the functionality of these Chinese electronics – be them counterfeit or just plain inexpensive, let us learn a little about China’s electronic behemoth: the Lenovo Group.

Lenovo stems from a combination of IBM’s legendary personal computer business and China’s own computer company, Legend. Legend is a legend in its own right. The company pioneered personal computing in China. From its conception in 1984, Legend brought the PC into Chinese homes and sold one million units by 1998 – undoubtedly helped by a nationwide network of retail stores. Legend also made western software available to the Chinese by creating a user oriented translation of English into Chinese characters.

In 2004, after a name change to Lenovo, the company bought IBM’s PC division making it, at the time, the world’s third largest PC manufacturer. The acquisition cost US$1.25 billion and included IBM’s desktop and notebook business, research and development and manufacturing divisions. (China Daily 12/9/04)

Since then, Lenovo has seen success. Its IBM ThinkPad notebooks with their signature solid keyboard, no-frills black look and red pointer mouse is a respected by notebook users everywhere. Lenovo holds a 29 percent market share in China and is establishing itself as a world player in the notebook and PC market. It has strategic partnerships with the Olympics and the National Basketball Association. In its third fiscal quarter ending December 31, 2008, Lenovo posted a sales increase of 15 percent year over year at US$4.6 billion. Lenovo also passed industry peers with year over year PC shipment growth of 22 percent. That’s well ahead of the industry average 16 percent. Sales in China outpaced those in the United States with US$1.8 billion of sales in China – up 16 percent over the same period in 2006. (US sales were US$1.2 billion, up 15 percent).

Today, Lenovo sees over two billion dollars of gross profit, showing 9.6 percent growth, nearly matching the total economic growth of China.

As far as the Lenovo’s actual products go, I must say they’re pretty good. I’ve been using my ThinkPad for about 18 months and I have little to complain about. It takes a while to start up but once it’s running this machine is a beast. It also has a nifty fingerprint reader so I’m the only one who can use the computer.

Countering one of China’s great business successes is the prevalence of cheap, sometimes counterfeit electronic goods. I’ll briefly list and review each item I’ve bought here in China.

Micro SD memory card – My phone has a spot for a Micro SD card but I’ve never used it. I figured I may be able to buy one here in China and I found some on the cheap at Silk Street. Silk Street sells everything at super low prices, trouble is: it’s all fake. So I bought a fake 2GB Micro SD card, I guess. If I remember correctly, I paid 150 Yuan for it. It seems to work pretty well. I did have a hard time fitting it into the slot in my phone, but it holds data just fine.

Headset – I bought a headset for talking on Skype. It put me back 45 Yuan and works great! It even has a nice volume wheel on the cord for easy adjustments. I think it’s authentic. It came in a legit looking box.

Webcam – Now this was fun. With Skype you can use a webcam so I figured I’d buy one. I wanted the absolute cheapest I could find. I eventually bargained my way down on one and settled for 50 Yuan. I even made sure it worked in the store before bringing it home. Things got interesting when I popped the driver installation CD into my computer. “Warning!” the popup message read, “installing this device could cause total system failure now or in the near future. Windows recommends you don’t install this.” This freaked me out so I didn’t install it. Shucks, now I was out 50 Yuan with a dummy webcam I can’t even use. But after talking with friends and locals, I determined it was, indeed, safe to install the driver for the webcam. You see, when you buy something computer related on the cheap, it means the software was probably developed on the cheap, too. So when I tried to install the software from some Joe Shmo developer, Windows freaked out. I think the only reason for the scare is that Windows didn’t recognize the software developer and thus thought it dangerous. That could either be because the software developer is some random Chinese company Windows doesn’t associate with or because the software doesn’t list an “official” developer. (Maybe because it’s counterfeit or something?) So I ended up installing the driver software (but not before backing up my entire system) and after a little troubleshooting and uninstalling and reinstalling I got the camera working. My computer is still chugging along just fine.

Speakers – I bought some nice Philips speakers complete with sub-woofer and volume adjust control unit for 350 Yuan. They work great. I bought them from the Lotus Center, a legit store, so I can’t really complain. Only gripe, no power switch so they’re constantly on.

Hard Drive – I picked up an awesome 250GB external hard drive for about 730 Yuan. It’s tiny, just bigger than half a slice of bread. After some hardcore bargaining I settled on the price that equals about US$104. Not bad, if you ask me. It came from the same place I bought the webcam – a massive electronics mall with dozens and dozens of stalls each designated for a different electronic device. The hard drive itself is Samsung and I got a case to match. They set the drive up for me after I bought it and once I formatted it myself I got it working just fine. Now it’s half full of all my photos and my complete system backup.

The list doesn’t stop there. I haven’t bought them because I don’t need them, but China has a huge variety of fake cell phones, iPods, iPhones, movies, music – you name it.

The important thing to remember with counterfeit goods in China is that with electronics – you can’t see if it’s any good until you actually use the thing. You can hold up a fake Ralph Lauren polo shirt and examine its thread count, fabric quality, stitch tightness and decide if you want to buy the thing or not. But with electronics, you can’t assess the functionality until you actually use it. Sure, you can test it in the store, but that takes time. The display model may be the only one that works in the entire store. But if you’re looking for a good deal, you may not get it – you get what you pay for. Spend 100 Yuan on a digital camera? Don’t expect it to work for more than a week.

This entry was posted on Sunday, February 24th, 2008 at 7:20 am and is filed under China. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.