What (hopefully) real ones look like.

What (hopefully) real ones look like.

Last week I had my most interesting trip to Zhongguancun yet.  A booth manager told me specifically how to tell the difference between fake and real headphones.  Specifically Beats headphones which can range from $150 to about $300 in the US (900-1800 Kuai).  This experience led to an answer to two questions: Why is it possible to buy some electronics at such low prices and why employees do not have any motivation to go above and beyond their paychecks.

This all started when I went to Zhongguancun to interview shopkeepers about what it’s like to work there and how they feel about it. I went to one booth because the man running it looked as if he was about to die from boredom.   He told me that his Beats were 900 Kuai.  We had just bought obviously fake ones before for 100 Kuai and, even though the pairs he had seemed nicer, I assumed they were still fake. In an attempt to barter, I told him the pair he had was too expensive.  He then pulled out a seemingly identical pair and told me that they were 450 Kuai.  When I ask him what the difference was and why the price was half of the other pair, he began to explain how one pair was real and how the other was fake.

I am going to add a video here showing the difference between a fake pair and an apparently real pair of headphones. Fake Beats are flimsier, the “b” on them looks much faker (almost like a sticker or as if it was painted on), they do not take batteries, and they don’t block out sounds very well, if at all.  The fake pair he had appeared more legitimate than the fake ones I use in the video but the differences are still the same, just more obvious. While the shopkeeper who showed me all of this refused to barter with me, I used this new knowledge to buy a real pair of beats for about $40 (they are the ones in the video).  Learning all of this was very important because it is how I am sure I bought legitimate headphones for a low price and not another pair of fake ones.

Besides this useful knowledge, the shopkeeper also gave me his business card.  This card had his name on it and it said he represented Huafeng Industry Electronics which seems to be a legitimate company.   I went back to the his booth after buying  a real pair of Beats and he was not there.  After seeing me loitering at the man’s booth, a woman from a neighboring booth came over and asked me what I wanted to buy. This was odd because there was no relation between the two booths.  When I told her who I was looking for, she asked me what his cereal number was and pointed to a card on the booth that had a number on it.  I looked at the man’s business card and saw that the cereal number next to his name and the one on the booth did not match so he must have been on his lunch break.  That was when I realized that these employees have to punch in and out of work like in a factory, something not so common in small businesses.  Apparently she knew the man and had the authority to operate his booth meaning they must work together.  Before all of this happened, the shopkeeper at the booth where I bought real Beats wanted to show me more of a variety so he walked around to other booths in the room and pulled boxes of headphones off them also meaning there was some relation between his booth and the others.

After experiencing all of this, I have realized these booths are not family owned businesses or budding enterprises but rather owned by large companies who buy space on the shopping floors and and use multiple booths to get as much product as they can on the shopping floor.  It makes sense employees do not go above and beyond their job because they are corporate workers trying to make a living and they are not competing with each other because they are all co-workers.  Whether or not you buy from one booth or another does not matter because the company still gets paid and therefore, the employees still get paid.

They wouldn't have to travel far.

They wouldn’t have to travel far.

This would also explain how the seemingly real Beats I bought are so cheap. They are most likely factory rejects or excess that a factory could not sell.  On the box of the supposedly real ones, it says that they are made in China (Picture to the right). It would cost the company very little to truck them from the factory to the warehouse of the electronics company and it would be especially cheap if they were bought in bulk. If the factory plans on throwing them out anyway, they are better off selling them for a small price than making no money at all.  The electronics companies do not have to pay for a lot for overhead because they are using booths so they can sell them for a lot of money to unsuspecting tourists and make a large profit. Since they are just booths, they also do not have to pay their employees very much since it requires very little skill and it would be very easy to find new employees if they lost any. I plan on finding articles on this method of business in China as well as getting more business cards from other booths to see how many companies operate there.  It seems that am researching in a Chinese Best Buy instead of a small market.