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Source: Zinc Finance
Xiaolin, who has been struggling in the Huaqiangbei parallel market for 10 years, finally decided to end his career in Huaqiangbei and chose to return to his hometown for development.
“It’s impossible to do it now. It’s hard to catch it, and it’s not easy to sell. There will be no parallel cargo planes in Huaqiangbei in the future.”
“In the past, Huaqiangbei made too much money selling parallel mobile phones. If you just bring back a few mobile phones from Hong Kong, you can earn thousands of dollars a day. I don’t know how many people make a lot of money.” The years are very different from today: “It is too strict to catch smuggling now, and if you catch it, you will be sentenced. Who dares to make a parallel mobile phone!”
There are not a few parallel merchants in the same situation as him, and Huaqiangbei seems to have fallen into an unprecedented depression and desertion.
From the loud voice to the door
Feiyang Times Building is the stall with the highest rent in Huaqiangbei and the center of parallel mobile phones. There are very few offices here, they are all surrounded by rows of glass counters, and the stall owners are next to each other, like monkeys locked up in a zoo. Unpackaged iPhones and stacks of red banknotes lie under the glass case.
Backpackers who come and go in the aisle to rush for gold, when they see a good-quality parallel-imported iPhone, they quickly negotiate the price with their boss, and when they negotiate the price, they can’t let their peers hear the price. They all carry a calculator with them. Show the seller, once the quoted price is sold, wrap the unpackaged iPhone in a plastic bag and stuff it into the backpack. By the next day, the iPhone in the backpack will be shipped to secondary dealers or customers across the country.
Xiaolin’s shop is located in a small office on the fourth floor. There is a sign on the door that says XX mobile phone repair and after-sales service. In fact, he doesn’t know how to repair mobile phones at all.
“I basically don’t do FIT business, I just buy and sell goods in large quantities.” Xiaolin recalled the prosperous years, and he couldn’t help but start pointing out the mountains and rivers: “There are three types of people who sell goods in Feiyang Building. Wholesalers of supply and channels, the middle reaches are the stall owners who rent a one-meter cabinet, and the most downstream are backpackers or individual tourists, and I only do upstream business.”
Xiaolin told Zinc Finance that his “parallel import business” is very big. As the most upstream wholesaler, he has two purchase channels: one is “small trouble”, hiring backpackers to go to Hong Kong every day. Back to iPhone. Although this kind of risk is small, at most 3-5 iPhones will be brought back at a time, and if there are more, they will be easily discovered by customs.
The second is the large-scale smuggling business. In Shenzhen Bay, Shenzhen River or Shatoujiao freight ships, multiple high-horsepower engines and hidden compartments for riverboats are installed. The iPhone was brought to Shenzhen from Hong Kong. This kind of “big deal”, Kobayashi is very cautious, will only do it every few months.
“Every time the goods arrive, that is the time when the most inflated. I immediately notify the familiar stall owners of Feiyang Building and ask them to come to my office one by one. Then I took the calculator and pressed the price of each iPhone one by one. What’s the price. If they don’t accept it, I’ll let them go and keep calling for the next one.”
At that time, the parallel imported iPhones were very popular, and Xiaolin often just moved the goods from the dock, and they were all sold out in a while: “Usually all of them can be sold in less than an hour, and they are all paid in person, and they cannot be shipped. Express delivery. After giving the money, the stall owners took boxes of iPhones and pulled them back by themselves.”
The good times did not last long, and such “glorious years” did not last long. From the beginning of 2022, affected by the importation of overseas epidemics, Shenzhen has begun to crack down on smuggling and smuggling, strictly investigate purchase channels or sources of express items, and severely investigate and deal with sales of imported items without legal sources.
As the key target of Feiyang Building, wholesalers such as Xiaolin dare not purchase any more, resulting in a cliff-like decline in the number of parallel-imported iPhones. The stall owners had no goods, and neither did the backpackers, and eventually the parallel trade business gradually disappeared.
At present, most of the one-meter cabinets in Feiyang Building have been emptied, and a large number of shops have been sublet or leased.
Parallel iPhones are not cheap
The biggest purchase value of the parallel iPhone is because it is cheap. But in recent years, this underlying logic has been subverted a little bit.
As mentioned above, the purchase of parallel iPhones is divided into wholesalers, stall owners, and backpackers. This also means that a batch of iPhones smuggled from Hong Kong are first drawn by wholesalers and then transferred to stall owners. The main draws another sum of money and transfers it to the backpacker or secondary dealer. In the end, backpackers and secondary dealers sell to consumers, who also take a cut.
Xiaolin told Zinc Finance: “The parallel iPhone is actually similar to a second-hand mobile phone. It is shipped from the Apple counter in Hong Kong. It is first-hand to me, and it is sold to the stall owner. The second-hand, the stall owner sells it to backpackers and secondary distribution. Merchants are third-hand…in the hands of consumers, they have already been transferred to the fourth-hand.”
After such a process, one link after another, and after deducting the intermediate logistics costs, when consumers get the parallel iPhone, the price is already much higher than the real Hong Kong iPhone. Compared with the National Bank version of the iPhone, there is not much advantage in price.
Apple StoreAt the same time, e-commerce platforms also regard the iPhone as the most important product for attracting traffic, and frequently launch various price reduction activities. For example, Pinduoduo’s “Ten Billion Subsidy” has continued to provide large subsidies for the iPhone since 2019, constantly driving down the starting price of the National Bank’s iPhone.
At the same time, in the e-commerce promotions led by Double Eleven and 618, the National Bank iPhone will launch 24 installment installments of interest-free activities. Compared with parallel iPhones, consumers need to pay thousands of yuan at one time. The iPhone threshold of the Bank of China is lower.
In addition to the lack of price advantage, e-commerce platforms have also begun to boycott parallel mobile phones. At the end of 2020, Taobao clearly requires sellers not to publish the description terms of non-mainland China versions such as “US version, Asia-Pacific version, European version, Japanese version, Korean version, and lock”; e-commerce platforms such as JD.com and Suning have also introduced restrictions on parallel imports. mobile phone regulations.
In the face of the continuous tightening of the market, the biggest profit point of the parallel iPhone is around the Apple conference in September every year. After the release of the new iPhone, due to the shortage of new products in stock, the price of the first batch of new iPhones will often rise sharply, which can bring a burst of anger to Huaqiangbei, which has been silent for a long time.
However, this year’s iPhone 14 series was boycotted by consumers because the basic versions of the 14 and Plus continued to use the previous-generation A15 chip, which directly led to lower-than-expected demand for the iPhone 14 series, and a large number of stockpiles, which made Huaqiangbei’s parallel import business even worse. .
“Apple can’t save Huaqiangbei anymore.” Xiaolin gave his last ten-year career in Huaqiangbei, and then boarded the high-speed rail to return home.
Transformation is still inseparable from Apple
When a company is struggling to survive, transformation becomes the only option. The parallel-imported iPhones in Huaqiangbei gradually disappeared, and Apple accessories became the biggest business.
In recent years, Apple’s smart wearable devices have caused shocks in the industry. Whether it is iWatch or Air Pod, they are all phenomenal products with annual sales of over 100 million. But it also breeds the gray industrial chain of “white-brand electronic equipment” in Huaqiangbei.
The so-called “white card” is actually an unbranded copycat, and its biggest advantage is its low price and the appearance that is extremely similar to the Air Pod. Compared with the prohibitive price of thousands of yuan for AirPods, white-brand headphones ranging from 50-200 yuan seem to be more in line with consumers’ expectations.
Not only are they similar in appearance, the white-brand headphones produced by Huaqiangbei even support the standard functions of Apple AirPods Pro such as “rename positioning, pop-up connection, and in-ear detection”.
Inexpensive white-label headphones that look and function like the Air Pod have become the industry’s top sellers. According to data from the Shanghai Securities Research Institute, in 2020, white-brand headset shipments will reach 292 million units, accounting for 49% of shipments; while Apple Air Pod shipments will be 78 million units, accounting for 21% of shipments.
Nearly 300 million shipments have made Huaqiangbei more and more manufacturers of white-brand headphones, gradually replacing parallel mobile phones and becoming Huaqiangbei’s new business card.
Although the sales of white-brand headphones are good, they are too dependent on imitated white-brand headphones and always face the risk of patent infringement. On the other hand, the price of white-brand headphones is too low, which also results in limited benefits for manufacturers. Although shipments are half higher, the net profit cannot be compared with Apple’s Air Pod.
From parallel imports and smuggling of iPhones to copycats and copycats of Air Pods, if Huaqiangbei always takes white-brand headphones as its core business, it will only further reduce its reputation.
Sitting on a commercial area of 1.45 square kilometers, with annual sales of 200 billion yuan, and the achievements of more than 50 billionaires, Huaqiangbei’s business legends, I am afraid no one knows where it will go in the future.
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