Shanzhai phones were cheap handsets, many of them imitations of famous brands, made by small Chinese workshops in the years after 2005. They grew on a cheap chip platform and loose rules, then faded as mainstream Chinese brands took over their market.
The story is one chapter in the wider picture of chinese tech brands, which explains how today’s major phone makers and manufacturing centres relate to each other.
What “shanzhai” means
The word shanzhai (山寨) literally means “mountain fortress” or “mountain camp”, according to Wikipedia’s entry on the term. It originally described the barricaded hideouts of outlaw groups, and the same entry says its modern usage covers counterfeit, imitation or parody products and the subculture around them. In phones, the label came to cover everything from outright copies of famous models to unbranded handsets with features that official products did not offer.
In Chinese the handsets were known as “shanzhai ji”, which CNN’s 2009 report translated as bandit phones. The name stuck because it captured both the outlaw image and the do-it-yourself spirit of the makers.
The 2005 chip platform that lowered the barrier
CNN’s report traces the industry’s growth to a technical change. It says China’s grey-market handset industry was virtually non-existent just a few years before its report, and that earlier unlicensed handsets were often poor because the technology needed to make them was hard to master. That changed in 2005, when MediaTek, a chip design company from Taiwan, developed what experts call a turnkey solution: a platform that integrated many complex mobile phone software systems onto a single chip.
The effect, according to the same report, was to make handsets much easier and cheaper to build and to let makers churn out new models at astounding speeds. Jonathan Li, founder of a Shanghai design studio, told CNN that MediaTek “basically commoditized the entire market” and that almost anybody could make a phone.
A second change followed. CNN reports that, a couple of years after the chip platform appeared, the Chinese government relaxed regulations limiting the number of companies allowed to manufacture handsets, which lowered the entry barrier for hundreds of entrepreneurs wanting a share of the world’s biggest mobile phone market.
- Meaning of shanzhai: mountain fortress
- Shanzhai ji bandit phones: bandit phones
- Industry was nearly non-existent before: virtually non-existent
- Easier cheaper build: fast models
- Li quote: commoditized
How big the shanzhai phone business became
Counting an informal industry is difficult, and the figures come from estimates rather than audited sales. CNN cited CCID Consulting, a market research firm based in Beijing, which estimated that in 2008, 150 million, or 20 percent, of the 750 million handsets produced in China were counterfeit or off-brand phones. Of those, over 51 million were sold in China and the remainder were sent to foreign markets.
The report estimated that by 2008 between 3,000 and 4,000 shanzhai businesses had emerged, many with fewer than a dozen employees. The grey-market phones typically sold for around $100, and CNN said they were driving down prices of brand-name mobiles and beginning to take market share from them.
Wikipedia’s article adds two further estimates. It says shanzhai makers are estimated to have accounted for around 30 percent of China’s domestic phone market by the end of 2006, and that the Financial Times estimated in 2010 that shanzhai phones made up about 20 percent of the global 2G mobile phone market. Those two figures are secondhand and measured differently, so they should be read as rough indications of scale rather than precise shares.
Karl Weaver, a mobile device specialist for the Chinese handset ecosystem, described the reach of these phones to CNN: “You can find them in major department stores and malls, in back alleys and in underground markets.” He called the business very entrepreneurial. CNN also reported that the phones were exported to dozens of developing countries in Africa, Latin America and the Middle East, not only sold across China.
Features, copying and creativity
Not every shanzhai handset was a straight copy. CNN’s report describes makers who copied major brands with slight twists in their names, and others who designed phones of their own. Others had special lights for identifying fake money, large screens and keypads for elderly users, or extra-loud speakers for farmers working outdoors.
Jack Linchuan Qiu, a communications professor at the Chinese University of Hong Kong who had studied the industry, called the phenomenon an important way to cultivate grassroots innovation. Those examples are why the era is sometimes described as more than imitation.
CNN’s report was filed from Shenzhen, and the electronics trade of that city is covered in the explainer on the huaqiangbei market, a major parts and finished-goods trading area.
Risks, regulation and the fade
The grey market drew complaints. The same report said Beijing had yet to take serious steps to curtail the industry, partly because shanzhai firms blurred the line between legitimate and illegitimate enterprise, and that a growing number of bandit phone firms were becoming licensed.
The business was already under pressure when that report appeared. It noted that nearly all grey-market firms placed orders with component companies that also work with major manufacturers, which kept factories running while handset sales fell during the economic downturn.
Wikipedia’s article says shanzhai products have become less prevalent in China since the 2010s, as well-established domestic companies producing low-cost or high-quality electronics eclipsed much of the market for counterfeit goods. It also suggests that MediaTek’s shift toward supplying more established companies such as Xiaomi and Oppo made it harder for small groups to build phones. The rise of one of those established companies is covered in the xiaomi history article.
Low-cost phones after the shanzhai era
Demand for inexpensive handsets did not disappear with shanzhai makers. Canalys reported, as relayed by the Nigerian outlet BusinessDay, that Transsion, the maker of Tecno, Infinix and Itel, became the world’s fourth-largest smartphone seller in 2024 with a nine percent global share, shipping 106.7 million units. The same report said Transsion led the African market with a 49 percent share. The figures show how large the market for affordable handsets remains, and they describe a different company from the makers covered above.
Frequently asked questions
What does shanzhai mean?
Show answer
It is a Chinese term meaning “mountain fortress” or “mountain camp”. Its modern use covers counterfeit, imitation or parody products, according to Wikipedia.
Why did shanzhai phones spread so quickly?
Show answer
CNN attributes it to MediaTek’s 2005 turnkey chip platform, which put many phone software systems onto one chip, and to relaxed rules on how many companies could manufacture handsets.
How many shanzhai phones were made?
Show answer
CCID Consulting estimated, as cited by CNN, that 150 million of the 750 million handsets produced in China in 2008 were counterfeit or off-brand.
