SHANGHAI — The Shanghai government said early last month that the Xiangyang Market, Shanghai’s busiest and most notorious distribution area for counterfeit goods, would be shut down in a move to combat piracy and improve the city’s reputation.
A report by the state-run Xinhua Newswire quoted Shanghai Vice Mayor Zhou Tai Tong as saying the popular market would be “abolished,” rather than moved, as previously planned.
The announcement came on the heels of successful lawsuits by luxury brands against vendors at Beijing’s main fake market, Silk Alley, and by Starbucks against a local competitor using a similar logo and the same Chinese name. It has been welcomed as a much-overdue tough stance against the rampant piracy of fashion and luxury brands in China.
But the market’s closure, whenever it happens, is more symbolic than substantive.
Shopkeepers at the market offered mixed accounts of their prospects, but confirmed this market at least was probably closing, albeit not until May or June. “It is being closed, not moved,” confirmed Wu Weiyun, owner of a stall selling counterfeit Prada and Coach bags and wallets. However, as one market closes, another opens. “I’ll move to the new market in Longhua in June,” said Wu.
Several vendors identified Longhua, in the far southwest of the city and famous for its temple and as the site where much of the movie “Empire of the Sun” was filmed, as the unofficial successor to the Xiangyang Market. “I heard we’re being shut down in May,” volunteered a woman selling fake Tiffany jewelry, complete with signature eggshell blue bag. “I guess we’ll move to Longhua then.”
Another vendor, who sells fake brand knives, pens, bags and suitcases, said he will move to Xujiahui, where there is a massive underground youth apparel market connected to the subway. It and a similar market under People’s Square here sell mostly trendy, unbranded clothing that is far cheaper than the counterfeit brands, which are now only about 10 to 20 percent of the merchandise at those markets.
About 70 percent of the goods sold at Xiangyang Market are counterfeits of international brands, primarily purses and apparel but also jewelry, luggage, perfume, pens and Swiss Army knives. The handful of legal products offered is limited to T-shirts and low-quality chinoiserie for tourists. Along with the public stalls, where pirated goods are boldly displayed, a number of dealers have set up makeshift showrooms in nearby apartments. They accost passersby with calls of, “Hello watch shoes ladies bags looka looka,” while waving laminated papers displaying a selection of their goods.
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The dealers’ calls serve as a good indicator of which brands have the most cachet in the city. “Hello Louis Vuitton Prada” remains the most common, while fake Chloé bags have proliferated rapidly since the brand’s China launch in November. The increasingly numerous and aggressive dealers have become a major public nuisance, turning the surrounding four blocks — filled with legitimate stores and restaurants — into a daunting gauntlet for pedestrians.
Vendors of counterfeit goods, from apparel to DVDs, are mostly rural migrants and laid-off workers from state-owned factories. Without education, skills or opportunities, they say, selling fakes offers one of the few alternatives to construction work, sweatshops or the sex trade.
The announcement the city government plans to shut down Xiangyang Market was concurrent with news that Hong Kong developer Sun Hung Kai Properties was in final talks to purchase the market’s site from current owner Maxdo Group. According to Shanghai Daily, Sun Hung Kai intends to build a hotel, office and retail space on the site. The timing of the announcement of plans to close the market suggests the government is seeking to claim credit for a closure that would happen anyway. Even if it were a deliberate move against piracy, the vendors will simply migrate to other markets, old and new, regardless of whether any one market is officially designated as a successor.
Xiangyang Market, occupying a half block of prime downtown real estate between Huaihai Middle Road and Xiangyang and Shaanxi South Roads, was from its inception in 2000 planned as temporary. For the past several years, there was speculation the market would be eventually moved to the Pudong area; along with Longhua, recent reports also suggest a possible move to Hongqiao, in the western part of the city. The current site was itself a relocation of Huating Market, located a few blocks west along Huaihai Road on Huating Road, which was moved due to overcrowding on the narrow streets and complaints from residents in the upscale neighborhood.
Xiangyang Market’s eventual closure will likely funnel distributors of the more profitable counterfeits into those and similar markets, as well as other areas in the city with already high concentrations of fakes. Small-scale operators spreading their wares on sidewalks and in subway stations have also been proliferating during the past six months and are also likely to increase.
Past antipiracy measures, while lauded by the China offices of major luxury brands, have seen similar tactics to the Shanghai market. The Beijing government gained huge publicity from bulldozing the stalls at that city’s counterfeit market, but the move actually was to clear the space for redevelopment. The counterfeiters simply moved to a more modern building farther down the road.
Meanwhile, last year’s campaign in Shanghai to post antipiracy admonitions and an increased police presence around the Xiangyang Market simply means the brisk business transpires under ubiquitous signs about “striking the net of selling counterfeit goods.”