China’s bustling Silk Market is renowned for selling knock-off electronics.
Business at the Silk Market has boomed in the past few years, according to David Gruels, a tour operator to China who said he has visited the country over 50 times.
iPads are among the recent surge of counterfeit electronic products being sold to foreign consumers wary of North American prices.
“The market has 20,000 visitors daily and on weekends 50 to 60 thousand people go through,” he said. “They have 3,000 sales people on seven floors . . . It’s really crowded inside and very active.”
Electronics counterfeiting is a fast-growing problem, especially given the rapidly changing nature of the business.
“The counterfeiting of goods has always been around in the world but it began to be a major issue in the electronics industry roughly 10 years ago,” said Robert Lowry, an electronic materials consultant.
Lowry said he believes the counterfeiting of electronics begins not with the product as a whole, but with its parts, which are called counterfeit components.
“A counterfeit component is one where materials, performance or characteristics are knowingly misrepresented by the vendor, supplier, distributor or manufacturer.”
These components are used to make electronic devices before being sold to manufacturers who provide the items to the general public.
“There’s a chain of trust that has to be present and every stop along that line has to have some precautions in place,” Lowry said.
Producers of counterfeit electronics also try to be ahead of the actual producers of the electronics, increasing competition with North American markets.
“There are rumors that the fourth generation of the iPhone was being sold in China a few weeks before it was even made available in the U.S.,” said Leon Hamiter, president of Components Technology Institute Inc., which offers counterfeit avoidance workshops. “Their methods are getting quite sophisticated.”
The counterfeiting of electronic goods is a common practice in China and in Eastern European countries, because governmental regulations against them are insufficient in those areas, Lowry said.
“Our laws do not allow counterfeiting or copying . . . but the problem is that in other parts of the world, counterfeiting is not illegal, and to make it even worse, the concept of counterfeiting and copying actually becomes part of their entrepreneurial spirit.”
The best way to resolve the issue is for governments in areas known for counterfeiting to introduce increasingly rigid regulations, Lowry said.
“If countries like China would pass and enforce strict laws against counterfeiting and violating copyrights . . . our counterfeiting problem would diminish greatly.”
Still, haggling with vendors in crowded Chinese markets can be a unique experience, Gruels said.
“They are very aggressive, but they do it with a sense of humor.”
