More on stolen iPhones at Best Buy Shanghai (Xujiahui): the Gangster Factor

Late last week I posted in regard to a bizarre encounter I had with a ‘freelance’ salesman/thief attempting to sell stolen iPhones inside of the Best Buy located in Shanghai’s Xujiahui neighborhood. In response, over the weekend I received several comments, two phone calls, and one email suggesting that the man who approached me is part of a wider gang problem in Shanghai that has plagued retailers in addition to Best Buy. See, for example, anonymous comment #8 [attributed to Marketing Manager] on my original post, and this excerpt from an email received overnight (the author requested that it be published without attribution):

We do not represent Best Buy, but we do represent a company in a similar position and let me tell you that keeping these guys out of the store borders on impossible.  The people selling this stuff in the store are gangsters and they intimidate and they have connections.  The staff are afraid and with good reason.  The issue is much bigger than just Best Buy.  In most cities, the police are absolutely no help at all.

This is credible information, and makes complete sense in light of what I saw last week: the staff of the Best Buy store could see precisely what was happening, and made no move to interfere. Store management, when I told them what was happening, expressed zero interest in interfering. And, let’s be honest here, it’s no secret that illegal commercial activity occurs all over Xujiahui (just take a look at the hawkers working the entries to the Xujiahui subway station) without any interference from the police (ie, full acceptance by the police).

What I don’t know – and I’d love to know – is whether or not gangs actively target foreign-owned retailers, knowing that they lack the resources and connections that Chinese businesses have, to deal with them. It’s a widely accepted fact of commercial life in China that foreign businesses have to comply with laws that Chinese businesses regularly ignore (politely, overlook). Perhaps this is one more expression of that widespread competitive disadvantage.

[UPDATE 11/29:

I was in the neighborhood this evening around 6:30, so I stopped into the store and rode the escalator to the third floor. It was definitely gangster free. In their place were relaxed, low-key sales staff eager to help me find a mobile.]

Expo 2010 Counterfeits: The Walls Have Been Breached!

The superlatives attached to Expo 2010 – the Shanghai World’s Fair – are various and numerous: it is the biggest Expo site, with the most countries participating, and – guaranteed – the best attendance, in the history of the Expo movement. Less discussed, but just as notable, is the fact that Expo 2010 is the most secure Expo in history, as well. Or, at a minimum, it sure looks secure: fences and soldiers surround the site, attendees are required to subject themselves to metal detectors and their bags to x-rays. The situation is often so heavy-handed that staff at several pavilions have taken to calling this Expo, the Gulag Expo (riffing, of course, on Aleksandr Solzhenitsyn’s Gulag Archipelago).

So it came as no small surprise to me when, last night, while I was strolling through the busiest part of the Expo (in front of the Spanish pavilion), I came across a tout selling counterfeit Expo 2010 key chains and other knick-knacks to enthusiastic Expo attendees.

Allow me to put this in perspective: three touts selling counterfeit Expo goods at Expo is akin to  three touts selling counterfeit Mickey Mouse key-chains in the heart of Disney World – a Disney World rung by fences and guarded by thousands of national guard members, police, and private security guards. And I’m not the only blogger to notice this phenomenon: DeluxZilla, apparently, had it ten days ago. He suggests that the touts are getting the goods into the park by having accomplices toss them over fences. I suppose that’s a possibility. But I think the more likely explanation is that somebody – I don’t know who – has good reason (I’m putting this delicately) to ignore the situation.

In any case, let this serve as a new datapoint in the ongoing discussion of whether China can, or even wants to, enforce intellectual property laws. After all, if not at Expo, where?

As Shanghai fakes its commitment to IP protection, I happen upon a Fake Swarovski Feeding Frenzy

I was passing through the Jing’an Temple metro station late this afternoon when I came across a frenzy of young women crouched down and clawing at something – a something that turned out to be boxes and boxes of fake Swarovski jewelry (note: my camera served to scatter many of the customers).

Nothing unusual in seeing fakes in Shanghai, or fake vendors in the subways. But I was a bit surprised to see them so active only weeks ahead of the Expo 2010 opening ceremonies. After all, Shanghai’s Pirate DVD stores, so far as I can tell, are still shuttered, or at least operating out back-doors or via internal rooms. So why the fake Swarovski salesmen are privileged over the city’s beloved purveyors of low-cost Jim Jarmusch DVD boxed sets (and other such things), remains a mystery. However, what’s perfectly clear is that Shanghai’s recent Expo-related case of IP religion (see here, here, and here) is roughly equal, in sincerity, to a hard kick in the shins. Case in point: Urso Chappell, the esteemed US-based Expo historian and founder of the Expo Museum, and the World’s Fair Podcast, tweets:

See the copied material, here.

What constitutes a Best Buy?

This afternoon, for the first time in months, I stopped by the Best Buy in Xujiahui (which happens to be the first Best Buy in China). And, while riding an escalator to the second floor, I saw something unexpected: roughly ten racks of CDs and DVDs. Real ones, not pirated ones. And they seem to have turned up since my last visit in, I think, January.

As fans of American retail surely know, Best Buy has seriously reduced the volume of floorspace devoted to CDs and DVDs in its US stores. At one time, I think, CDs must have taken up more space than any other single item in the average Best Buy. But today, they’re hard to find, downsized by itunes and piracy.

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So what on Earth makes Best Buy China think that it’s a good idea to add floor space for DVDs and CDs in a country where pirate DVD and CD shops advertise in state-owned newspapers, when it can’t sell CDs and DVDs in a country where piracy altered their floor plans? Certainly, they aren’t trying to beat the pirates on price. For example, a copy of the most recent James Bond film, Quantum of Solace, is selling for RMB 50 (US$7.31) at Best Buy (wildly cheap by US standards); meanwhile, just up the street, at a pirate DVD kiosk, the same film sells for RMB 7 ( US$1.02). A higher quality copy, complete with DVD extras, was going for RMB 12 (US$1.76). Likewise, a copy of Sheryl Crow’s most recent CD was selling at Best Buy for RMB 72 (US$10.53); at the DVD kiosk, the same CD could be purchased for RMB 5 (US$.73). Continue reading

The Fox News All Pirate Review.

This morning, a brief moment of culture shock when I read that Fox News’s Roger Friedman was fired for downloading, and reviewing, a copy of the yet-to-be-released summer blockbuster,  Wolverine. If my American readers don’t feel similar shock at this relatively minor news, I suspect that – unlike me – they haven’t spent most of the decade in a country, and an expatriate media environment, where media piracy is socially acceptable. Just how acceptable? Well, for as long as I can remember, most of the English-language expatriate magazines in China have included reviews of the pirate DVDs widely available here. For example, the April 2-15 issue of City Weekend (a publication for which I’ve freelanced in the past) includes a sidebar column named “STREET DVDS – The best discs from the streets of Shanghai” with reviews of Revolutionary Road, Defiance, and Watchmen. City Weekend is no fly-by-night outfit, either: owned by Swiss publishing conglomerate Ringier, it claims qualified circulation of 95,000.

So let this particular incident, and the astonishment which I suspect it engenders in other expatriates (not to mention, China’s vast and enthusiastic pirated film base), serve as an interesting marker for Hollywood as it assesses China’s potential for media priced as if it’s being sold in Manhattan (I’ve written about this topic, elsewhere). And, in solidarity with Roger Friedman (who, from my reading, sounds like a real piece of work), I’ve just gone downstairs to buy a copy of Wolverine, and I’ll offer my review in coming days. Take that, Rupert Murdoch!

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And if that wasn’t clear enough: for the record, I find nothing wrong with reviewing pirated DVDs.

[UPDATE 04/08 - Hugh Jackman says that he's "heartbroken" by the piracy of the film. That may be the case. I don't know. But I bet he's not heartbroken by all of the publicity being generated by the piracy story. If not for Roger Friedman, who, other than (the very large community of) Wolverine aficionados, would be talking about the film at this point?]

The Vancouver Sun’s Douglas Todd Stole My Photo [UPDATED!]

[FINAL UPDATE:Douglas Todd, the Vancouver Sun, and its owners - Canwest - have so far refused to answer my demands for payment. No surprise, and so be it. For now, I think it's worth noting that Douglas Todd's blog continues to post uncredited photos. That is to say - he continues to steal intellectual property from other writers and photographers, apparently with the full consent and support of Canwest and the Vancouver Sun. I guess I wouldn't mind so much if he was something other than a so-called ethics columnist. So what's he thinking? What the Sun thinking? Well, whatever. A more litigious update to be published later this year.] Continue reading

Even Pirates Love a Film Festival.

Long-time residents of Shanghai know that – every June – the city’s multitude of pirate DVD shops close in advance of, and during, the Shanghai International Film Festival (five years I’ve been here, five years the shops have been shut down). That way, all of those foreign filmmakers and executives won’t see the thriving fake sector at work. And, probably more important: local officials and festival organizers won’t have to answer any embarrassing questions about the DVD shops ordinarily open just around the corner from screening sites.

Which makes me wonder: why, Saturday night, could people could be found browsing for pirate DVDs in shops just a few minutes walk from the red carpet opening at the Grand Theatre?

It’s all the more curious that those shops remained open this year, an Olympic year, during which China is enforcing and respect all of those laws that it spent the last twenty years winking away. In fact, two days before the Festival opening, Beijing announced that it was commencing a drive to crack down on those who dare to infringe on Olympic IP (and don’t even think about wishing “great success” to the Olympics at a commercial event without permission). Surely, Shanghai’s pirate DVD shops would be easy collateral in this drive?

Hardly. In fact, not only are they open, but one of the biggest (it shares a name with a US chain of video stores) managed to take out an advertisement – which included a map – in the Shanghai International Film Festival supplement published by state-owned China Daily. So much for the underground economy.

What’s it all mean? Beats me. But perhaps – as has been, ahem, rumored – visiting Hollywood studio execs like shopping at pirate DVD stores, too? Or perhaps there’s just more pirate money to be made – and spread around – than anybody guessed.