
What $50 buys you at the Huaqiangbei electronics market in Shenzhen, China - obrajesse
https://medium.com/@keyboardio/what-50-buys-you-at-huaqiangbei-the-worlds-most-fascinating-electronics-market-f0384d9fca32
======
code_sardaukar
From this and other accounts, it is clear that a lot of the low cost in China
is due to that fact that transaction costs (the cost of writing contracts,
lawyers, specifications) are reduced by replacing formal contracts by
interpersonal relations[0]. So if someone screws you[1], it will hurt their
relationship with you and their reputation.

Of course there are other considerations like cheap labour and the ability to
rip-off Western IP (though I don't think those goods make it to the West). But
these can't explain why China in particular is so dominant in manufacturing.

[0] I'm told that the term "guanxi" has two meanings. First as a generic term
for "connection" or "relationship" and second as a proper noun for the way
people indirectly bribe government officials. Here only the first meaning
would apply since I'm talking about B2B relationships. And since it's a
generic term, there is no reason to use the Chinese word.

[1] Or screws you more than is considered fair game.

~~~
gmac
Probably also by externalising a lot of costs — such as waste management, by
tipping toxics into holes in the ground?

~~~
code_sardaukar
Well from the point of view of China the nation, these aren't externalized:
Chinese people will have to pay this cost. But you're right that this
contributes to lower costs. I still the main reason is the first one I gave
though.

------
laddng
A few years ago I lived in Shanghai, and it was always fun to stop by the
black markets to check out the fake iPhones and Apple gadgets that they were
selling.

It was amazing how close they were to copying a real iPhone in terms of the
hardware design, but it was always funny to see them run a version of Android.
They were selling them for $10 a pop as well. It's incredible to check out
these electronic markets in China and see the effort that goes into these
fakes.

~~~
StavrosK
Wait, they were selling a phone whose hardware was close to an iPhone's, for
$10? What am I misunderstanding?

~~~
obrajesse
It looked like an iPhone. It didn't work like an iPhone.

~~~
carterehsmith
How so? Was it like, there is no screen but just a paper cutout? Or, there is
screen, but it is 120X60 resolution? Thanks :)

~~~
dagw
Poke around alibaba and you'll find several companies selling 4-5" touch
screens with decent resolutions for around $2-3 a piece for order of 1000+
units. If you're on the ground and speak the language you can certainly get a
much better deal than that.

------
Hasz
The chips, resistors, capacitors etc are all mostly functionally equivalent.
The transistors, regulators ICs etc will all do what they're spec'd to do, at
a basic level.

Where it gets dicey are fringe cases, and on poorly controlled specs. Care
about the temperature drift of your resistor, the slew rate of your op-amp,
the beta of that BJT, or the mismatched LED strings in the COB?

Better test it to make sure it'll work for you, because 90% of the time, it's
bullshit.

For common parts, it's easy to set up a new line, running off good parts --
the 555 timers and lm317s do enough volume for a new line to make sense. These
chips are usually better characterized. If it's a small volume part, or
something old as dirt, it's usually pulls, a new part in an old case, or just
a normal part remarked.

~~~
chrisbennet
Actually read the article, it's pretty interesting.

------
whamlastxmas
Discovering aliexpress was pretty awesome when I got started working with
electronics hardware. Easily 1/5th the price of buying from an American store,
in some cases as low as 1/10th the price. I've spent $500+ on stuff from
aliexpress that would have been over $3k from a place like Adafruit, and I've
had very few garbage pieces (though admittedly haven't used/tested a lot of
it).

~~~
obrajesse
Yup. And Taobao is often even cheaper.

Sadly, a lot of the Aliexpress stuff is so cheap because it's
unlicensed/knockoffs. It'll work, but in a lot of cases, it's the hardware
equivalent of pirating software. :/

~~~
th0br0
The lack of a proper english translation for Taobao is a game killer for me
though..

~~~
patrickk
[https://www.baopals.com/](https://www.baopals.com/)

All the expats in China use it. You need to figure out shipping though.

------
contingencies
Forget the west. In my experience there are a lot of legitimate products which
you can buy in Shenzhen but not on Taobao. Recently my
[http://8-food.com/](http://8-food.com/) co-founders and I visited Shenzhen
from Kunming (much nicer weather) and found micro SD cards (256MB @ 3.5元 /
0.50USD) and micro SD card readers (0.5元 / 0.07USD). Although these were
largely falsely marked as larger cards and intended for immoral mobile shops
to dupe unsuspecting peasant customers, in reality they are great for low
volume industrial data storage on physically modular components. Far cheaper
and faster to integrate than a microcontroller! I would say that in our case,
discovering the availability of USB lowball storage and validating this
approach architecturally paid for the entire trip.

~~~
reitoei
Your vending machines look great.

------
mjevans
The most interesting takeaway from this for me was the "32 GB" SD card.

~~~
toomanybeersies
Here's an interesting, relevant article with a teardown of some fake SD cards
versus a real Kingston:
[https://www.bunniestudios.com/blog/?page_id=1022](https://www.bunniestudios.com/blog/?page_id=1022)

~~~
mjevans
Quite some insight in to the way competitive retail markets 'work'. "Hooray
for capitalism"?

------
imaginenore
What's crazy is that these prices include profits for the whole chain of
production and transportation.

------
ChuckMcM
Sounds like there is an equivalent side business to candy Japan.

~~~
HeyLaughingBoy
I've actually purchased a few 12VDC RTC timers insanely cheap on Aliexpress
with the intention of writing good documentation and reselling them at 10x
markup into a niche market. Right now I'm checking them out to see that they
maintain time well.

Even at that markup, I'll be the low-cost supplier, so maybe I should go for
15x. If it works out, I can think of a few other markets that have a need for
something like this.

It's amazing: no way in hell could I even buy the raw parts, much less
assemble and test full units, for what I can purchase these for.

~~~
seanp2k2
Also interesting IMO is how some in China (not sure if it's mostly a HK thing
or goes for mainland as well) are focusing on producing very high-quality
stuff vs just the race to the bottom on price. One niche example that I've had
very good luck with is Ghent Audio, which sells audiophile hobbyist gear:
[http://www.ghentaudio.com](http://www.ghentaudio.com)

------
Jean-Philipe
Uhm... well, actually, some of those things are pretty cool though!
Programmable LED name badge, mini drone, a dirt cheap smartwatch - I wouldn't
necessarily call that crap or dreck.

------
xg15
I'm surprised they are so awed by the "Lightning/MicroUSB" cable but gloss
over the (spring-loaded?) "USB-A/MicroUSB" plug of that selfie fan. The latter
seems even more insane to me.

As for the fake SD cards, I'm kind of disappointed they didn't take the
opportunity and produced the world's first 100TB SD card (patent pending). I'd
be curious how many phones would be wrecked by such a card just because of the
announced size.

~~~
seanp2k2
There's probably some limitation based on address size that you can advertise,
possibly the number of bits used to represent the size. Not sure on the exact
spec.

------
ced
I'd like to read a breakdown of where the 14.39 difference between the 0.60
ring in Shenzhen and the 14.99 ring on Amazon goes.

~~~
_pr
I don't have a breakdown for the ring, but from experience that's not much
more than what it takes to keep the product flowing to people's doors in the
US at modest volumes.

Anyone can buy these in any quantity. If you have a few hundred dollars and
are interested in learning a little about business in China, it would be a fun
exercise to import and sell something like these rings on Amazon.

~~~
rudedogg
I did this with phone cases like 6-7 years ago. I setup a website with
Magento, took nice photos of all the cases (which I found out is kind of
hard). And started running some Google and Facebook ads. I couldn't seem to
make a profit that way (duh). In hindsight I should of pursued Amazon. I
bought like 300 of them.. and 290 or so ended up in the trash.

It was really interesting to do though. Talking with the Sales people on Skype
was kind of funny, I remember in one profile picture, the guy had a western
outfit on (cowboy hat, bandana, the works). I think a lot of the Sales people
did that kind of stuff to connect and seem more trustworthy with Americans.

I also picked up some single units of headphones and breathalyzers. All the
headphones were garbage. Some of the breathalyzers actually seemed pretty
nice, but they would be expensive to purchase in bulk, and it seemed legally
risky.

The main cost/challenge I found was shipping. Air is quick and easy, but
really expensive. Going by sea is cheap in comparison, but requires you
operate at a bigger scale. There's a name for companies/people you can hire
that will handle all the tricky parts of shipping by sea (I want to say
Freight Agent but am not sure).

~~~
SmellyGeekBoy
Heh, this mirrors my experience almost exactly, except with Nintendo Wii / DS
accessories. The day Google banned R4 cards on Google Shopping was pretty much
the day the entire business died. I still have a big box of stylii / cases /
plastic Wii controller accessories that I haven't had the heart to throw away.
It even moved house with me. :)

Completely unsustainable (the tiny margins I did make would have been
completely wiped out if I was paying proper taxes) but did teach me a lot
about business.

------
Solinoid
Can anyone shed some light on how that stencil is used? do they apply the
solder to the stencil and then push the chip into it?

~~~
DanBC
Yes.

You screen print solder paste through the stencil, onto the board.

You then push the components onto the paste.

In the past you didn't have to be too precise, because surface tension of the
solder as it flowed would pull it onto its pad, and would align the component
correctly.

For production you'd have camera aligned tables.

Re rework you have little tiny masks.

Here's a bit of video:
[https://www.youtube.com/watch?v=LaqeLrLxYOg](https://www.youtube.com/watch?v=LaqeLrLxYOg)
(Screen printing starts at about 1:40)

I used to operate a screen printer, pick and place machine, and reflow oven.
But that was 12 years ago. The machines are amazing now.

~~~
jburgess777
In reality I would expect all these components to be squeezed tightly together
so I don't see how the large stencil plate would be of much use for rework.
Presumably it would need to be cut up into small "per IC" units if someone
wanted to put down solder paste on to a PCB which was already populated with
other ICs.

~~~
uola
As implied by jdietrich, they (seemingly) stencil the chip rather than the
board.

[https://youtu.be/Iu0pd6OsNF4?t=235](https://youtu.be/Iu0pd6OsNF4?t=235)
[https://youtu.be/2bGb5AOwp44?t=109](https://youtu.be/2bGb5AOwp44?t=109)

------
Retr0spectrum
I'd love it if there was an equivalent service that shipped to the UK, perhaps
aimed more at components. I'm always buying cheap stuff from china.

~~~
jburgess777
AliExpress (as mentioned elsewhere) is a great place to look:
[https://www.aliexpress.com/](https://www.aliexpress.com/)

I have ordered lots of stuff from there and it has all turned up approximately
in my mailbox 3 to 6 weeks later. I have generally ordered items which are
less than the ~£15 customs threshold. More expensive items might be liable to
VAT or other duties: [https://www.gov.uk/goods-sent-from-
abroad/overview](https://www.gov.uk/goods-sent-from-abroad/overview)

Other sites have begun started to ship from warehouses inside the EU to avoid
customs issues, e.g. [http://eud.dx.com/](http://eud.dx.com/)

If you have never seen these sites before then you should be warned that they
even simple searches will return hundreds or thousands of results. You might
spend a long time searching though the results for even something mundane like
LED bike lights:

DX 380 results: [http://eud.dx.com/category/bike-
light-1644](http://eud.dx.com/category/bike-light-1644) Aliexpress 18000
results: [https://www.aliexpress.com/category/122803/bicycle-
light.htm...](https://www.aliexpress.com/category/122803/bicycle-light.html)

EDIT: since you specifically mention components:

e.g. a search for 100nf capacitors:

DX:
[http://eud.dx.com/search/100nf%20capacitor](http://eud.dx.com/search/100nf%20capacitor)
\- Frankly the results are poor, DX is aimed at more end user products.

Aliexpress:
[https://www.aliexpress.com/wholesale?catId=0&initiative_id=S...](https://www.aliexpress.com/wholesale?catId=0&initiative_id=SB_20161013161521&SearchText=100nf+capacitor)
\- Results have several suppliers offering 100 pieces at <£1 including
delivery! I have ordered capacitors and resistors similar to these and they
all turned up in the post several weeks later, just as I expected.

~~~
jdietrich
In my experience, most stuff over the £15 threshold slips through the net
without being taxed. Chinese sellers seem to have a knack for it. Paying VAT
seems to be the exception rather than the rule.

If you're getting started in electronics, I'd suggest buying mixed value kits
of common passive components. They're really cheap and very handy to have
around. If you work with SMD components, these sample books are a huge
timesaver:

[https://www.aliexpress.com/wholesale?SearchText=sample+book](https://www.aliexpress.com/wholesale?SearchText=sample+book)

PCBs from China are cheap enough that I haven't etched my own boards in years:

[http://pcbshopper.com/](http://pcbshopper.com/)

Aoyue and Yihua make very cheap and surprisingly usable soldering tools. You
can get a perfectly acceptable temperature-controlled soldering iron or hot
air gun for about £25. You might as well stock up on solder, flux and wick
too.

Taobao is a bit of a crapshoot if you can't read Chinese, but it's where
you'll find the really insane bargains and the sexy new chips. There are a
variety of English-speaking agents who can buy stuff for you for a reasonable
fee. Dangerous Prototypes have a useful forwarding service - have stuff
delivered to their office and they'll send it on to you for $3 per parcel plus
the cost of shipping.

[http://dangerousprototypes.com/store/china_forwarding](http://dangerousprototypes.com/store/china_forwarding)

------
ausjke
That says again that there is absolutely no way to compete against them on the
manufacturing side.

~~~
_rpd
Automation. It doesn't matter where you locate lights-out factories.

~~~
contingencies
Except that you have to stock the factories with a global supply chain, 95% of
which is located in Guangdong province or other parts of south-east mainland
China. This also means that, unless you are producing a consumer product, most
of your market is likely to be located there as well.

------
PebblesHD
Love it, and thats some amazing stuff to get in a relatively cheap box. Does
anyone have any pictures from the markets, I'd imaging they're all very 'no
photos' sorts of places but still.

~~~
jburgess777
If you are in the UK then the BBC Click series did an episode where Bunnie
Huang visited various stores:

[http://www.bbc.co.uk/programmes/b07jhs3m](http://www.bbc.co.uk/programmes/b07jhs3m)

~~~
voltagex_
And if you're outside of the UK and are looking for this via other means, it
was (re)broadcast on 2016-06-25. Still looking for the other part, but I
believe it was broadcast on the 11th (also in June) or a week earlier.

BBC Worldwide: I'd buy (a subscription to?) this series - do you want my
money?

~~~
seanp2k2
I wish I could pay for iplayer as well. I'm guessing it's complicated because
of BBC being publicly-funded EDIT and international content licensing issues,
but if they're producing the content and they own the IP, I'm not totally sure
what the hold-up would be. I'd gladly pay $10-15 a month for an all-access
pass to BBC content on streaming.

------
suyash
You probably overpaid for everything being an American. Amazing how companies
are selling the same stuff for huge margin here in States.

~~~
obrajesse
Certainly. I also didn't bargain particularly hard.

Though I did have a native speaker (Helen) who lives in Shenzhen with me the
whole time.

------
wodenokoto
Slightly off-topic. What is going on with the keyboardio? Is it shipping? Have
people received and tested it? Is it worth $300+ ?

~~~
obrajesse
[https://www.kickstarter.com/projects/keyboardio/the-
model-01...](https://www.kickstarter.com/projects/keyboardio/the-model-01-an-
heirloom-grade-keyboard-for-seriou/posts)

------
dajohnson89
Why were the boxes taped so insanely?

~~~
paulgerhardt
Cheap waterproofing, tamper proofing, 'packet' anonymization, and a means of
tailoring a box to the custom size.

It needs the waterproofing in part because of the insane monsoon weather that
blows into south China and will soak you in seconds and because a lot those
packages get shuttled around in the back of open half-truck-half-motorcycles
until they get to major distribution nodes.

It's 10 cents per square meter.

It's also partly cultural (everyone else does it this way) - and most sellers
are small operations of a handful of people.

It provides seller protection for online purchases.

It doesn't make high value items look inviting.

The cardboard is frequently sourced or reused from whatever is lying around
and cut to size so there's less need for filler when using 'standard' Amazon
A1, B14, F3, etc style boxes.

------
a_c
I once bought a wireless charger on amazon. Probably would go HQB next time

------
mamcx
Is interesting the parallel:

\- If is a hardware rip-off is bad \- If is a software rip-off is open source!

\---

Consider that the bulk of open-source ignore all that pesky patent and IP and
is directly people-to-people.

------
rajandatta
Awesome posy. Sign me up!

------
nodesocket
I think these cheap Chinese rip-off are bad for the electronics market and
consumers. If your biggest concern is price when buying electronics,
completely ignoring the fact of quality, care, and engineering you're
contributing to decline of quality built electronics.

They don't do any of the hard engineering or go through meticulous testing and
QA. They blatantly copy, and as such provide no innovation. Stop supporting
this behavior, have some pride for the products you buy.

~~~
nl
The fake iWatch:

 _The device looks a lot like an Apple Watch, but the functionality is a
little bit different. Sure, it has a pedometer and a sleep tracker. If you
pair it with your phone, it can act as a bluetooth speaker and microphone.
What sets this device apart is what you’ll find when you pop off the battery
cover and remove the tiny little battery. There’s a SIM slot and an SD card
slot. If you drop a SIM into the watch, you can make calls and surf the web.
If you drop an SD card into the SD slot, you can use the phone’s camera to
shoot grainy, low-resolution photos from your wrist. The vendor assured us
that the watch would last about 3 days on standby._

So when Apple ships an iWatch with the ability to run standalone without an
iPhone, remember "they blatantly copy, and as such provide no innovation"

~~~
SmellyGeekBoy
I'd add the mini drones and MicroUSB / Lightning cable as well. Saying these
people aren't innovative is really doing them a disservice.

