Shan Zhai: A Chinese Phenomenon
Study the Shan Zhai as they study you.
By Edward Tse, Kevin Ma, and Yu Huang
Originally used to describe a bandit stronghold outside government control, the term “Shan Zhai” today refers to businesses based on fake or pirated products. Many businesses with humble Shan Zhai origins are now becoming formidable market disrupters and, in many cases, market leaders.
The innovative nature of Chinese culture and the huge potential in the Chinese market create vast opportunities for Shan Zhai companies. The Shan Zhai phenomenon is not about low-cost fake products anymore; it is about how one type of Chinese company achieves success without following conventional wisdom and develops competitive advantage through innovation.