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.]


  1. 您说的对极了,警察对此完全是一种默许的态度,或者也有可能警察是得了好处的。不知道您有没有发现,这和很多窃贼贩卖偷来的自行车,摩托车都是一种模式,以低价贩卖偷来的车子。

  2. Hi Jimmy –

    Good question with two answers.

    1. The phone that I was offered was definitely used. Whether it was a fake used iPhone, I don’t know. But I’ll make the reasonable assumption that the guy selling it wasn’t offering up his old one so that he could upgrade to a 4th gen.

    2. It’s a poorly kept secret that Xujiahui and its e-markets have long been places where stolen goods are fenced.

    So, based upon both factors, I feel comfortable in stating that we’re talking stolen phones.

  3. don’t forget about the black market currency traders. my favorite guy is the one who works out of the ICBC on the corner of shaanxi and huaihai. he’s there every day, like it’s his own office, has been for years. nobody has ever said boo to him that i’ve seen or heard about.

  4. I’ve noticed a (vaguely) similar phenomenon at McDonald’s – at the outlet in my neighborhood locals are regularly in there eating their own food, even smoking and drinking (beer!). You wouldn’t see this at a Chinese establishment. I suppose a possible upside is the management also turning a blind eye towards homeless sleeping there. (And surely the fairly recent murder at the McDonald’s down the street from the Xujiahui Best Buy plays into the fears of the staff confronting these guys.) In this case the general perception of the guys who sleep there is that McDonald’s has a foreign boss who is therefore nice.

  5. Gangs operate at both foreign and Chinese-owned retailing outlets, perhaps not as blatantly at the latter and definitely not if they are major chains. The best example is the way they have snapped up iPhone 4 at Apple stores for resale at huge profits. The mobile phones they sell can be: 1)straightforward fakes; 2) imports of genuine new products from Hong Kong and Europe locally modified; 3) imports of secondhand products from overseas locally refurbished and modified. More or less the same situation applies to computers.

  6. Interestingly, I had a friend who was taken in by one of the fenced iPhone sellers at exactly the same Best Buy during the first half of this year. He was hooked by the very low price, and after checking the iPhone out to make sure it worked he went outside with the con-guy in tow to get some cash from the ATM.

    After my friend had the cash, the con nervously approached him, saying that he needed to take the iPhone quickly and put it away because there were police around. He forked over the cash and took the iPhone and the conman stalked quickly off into the crowd.

    As my friend walked in the other direction, he pulled his newly purchased phone out of his pocket only to discover that it was a dummy display model. He then turned around and sprinted down Tianyaoqiao Lu after the guy, locating him in the crowd. The guy saw him and sprinted away, but my friend caught up with him near the entrance to the Cityshop underground complex and tackled the guy.

    A crowd gathered as my friend in a fit of adrenaline screamed that he was thief and took back his money. A few seconds later, he realized that the guy might have friends in the area, and so he hastily fled.

    After hearing the story, I reminded my buddy that: 1. He was extremely lucky for a number of reasons; 2. If it seems too good to be true, it probably is; and 3. That’s why you don’t buy stolen property – if someone is willing to steal something from someone, they’re usually willing to do the same to you.

  7. I had the same experience in a Nike store on Nanjing Donglu. Also just think about the people who sold fake expo merchandise inside Expo grounds and right outside the security checkpoints, in full view of the police, guards and military. Pretty sure it’s an issue that plagues only foreign and businesses. As people say, corruption and piracy is the tax for doing business in China.

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