In less than a week since the original BirdAbroad blog post, two of the five “fake Apple stores” in the city of Kunming have been shut down by municipal authorities—not for blatant copyright infringement, but for “operating without business licenses.” In other words, in response to international media attention.

The story first broke last Wednesday, when a 27-year-old American blogger known only by her Internet handle “BirdAbroad” first posted a series of photos documenting a number of copycat Apple stores that had cropped up in Kunming, the capital of Yunnan province. Eventually, the blog post went viral, sparking an obligatory Next Media Animation video report and a worldwide hunt for fake Apple stores around the globe.

According to Reuters:

“I originally put the post up not because it was news that Western brands get ripped off in China, but because these Apple stores had taken the fakery up a serious notch to the point where it’s practically a work of art in itself,” the blogger, who works for an international health organization, told Reuters in an email… “I did actually email the blog post to Steve Jobs when I first put it up, purely for fun. Sufficed [sic] to say, he has not responded.”

The news struck a chord with Western and Chinese media alike amidst Apple’s release of OS X Lion, its new Mac mini and MacBook Air computers, and especially its unprecedented Q3 performance, with the company’s growth actually accelerating despite being what is now the second most valuable company in the world.

Kunming city officials claim that the five stores, although unauthorized, were indeed selling genuine Apple products, but that didn’t stop angry customers from coming back in droves demanding refunds. Certainly, this kind of thing is not new for China, whose unique position as the factory of the world has given rise to a black market of imitation and/or pirated goods.

Collectively referred to as shanzhai (山寨, lit. “mountain stronghold”) products, Chinese knockoffs have ranged from cell phones to luxury bags and even a shanzhai Steve Jobs. For the past seven years, China, the shanzhai capital of the world, has been listed on the U.S. Trade Representative’s “priority watch list” of copyright-infringing countries.

At the moment, the only official Apple stores in China are located in Beijing and Shanghai but generate the company’s highest revenue and traffic—it was only a matter of time before they would be duplicated. According to Paul French, the founder of market research company Access Asia, “An Apple store is one of the easiest stores to do; that’s the genius of it. It’s so simple. It’s just like a school chemistry lab.” The shanzhai stores in Kunming were so convincing, in fact, that even the employees genuinely thought they worked for Apple.

Although Chinese law prohibits copying the “look and feel” of other companies’ stores, enforcement is rare, and even in this case the Kunming municipal government has skirted the issue. Of the five stores reported by BirdAbroad, only two were shut down, not on the grounds of copyright infringement but for the fact that they did not have proper business licenses. As they have proper operating permits, the three remaining stores are still undergoing investigation by the government.

This shows the Kunming city authorities’ unwillingness to take a hard stance on the issue of piracy, even amidst such tremendous international attention. In fact, Chang Puyun, the spokesperson for the city business bureau, even stepped in to defend the shanzhai Apple stores, arguing that the situation has been misrepresented by Western media:

Media should not misunderstand the situation and jump to conclusions. Some overseas media has made it appear the stores sold fake Apple products. China has taken great steps to enforce intellectual property rights and the stores weren’t selling fake products. (Bloomberg)

In fact, Chang defers some of the blame onto Apple itself, adding that officials were investigating whether Apple had applied with the Chinese government to have its store design protected by law.

Even some customers have sided with the shanzhai Apple stores; it doesn’t matter if the store is unlicensed or fake, they argue, as long as the products themselves are real. As one Chinese microblogger puts it, “U.S. imperialism is so rampant that we help you to sell your product but you get angry.”

But what of the original expatriate who broke the story? Overnight celebrity BirdAbroad writes on her blog that she has “been called upon to publicly apologize to the city and people of Kunming for… I don’t even know what. Presumably for besmirching their good name.” While she tries to return to her normal routine (having been harassed by scoop-hunting Western media outlets and Chinese paparazzi alike), she explains how split Chinese people are over the issue of the shanzhai Apple stores:

Some Chinese people have written to me very upset that so much abuse of intellectual property rights happens in China, others have written to me saying that they believe IPR is basically irrelevant here — and a small group have even said that Apple deserves to get ripped off because their products are too expensive and they’re made in China anyway! (Reuters)

That is, until China gets a taste of its own shanzhai medicine. India and Brazil, we’re looking at you.

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TAGS: Apple • China • copyright • Fake Apple stores • intellectual property • shanzai

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