Huaqiangbei: more than an electronics marketplace

By Chen Qingqing Source:Global Times Published: 2018/2/11 20:53:39

An overview of Shenzhen's high-tech park area that is home to technology companies such as Tencent Holdings, ZTE Corp and DJI. Photo: Chen Qingqing/GT

An overview of Huaqiangbei, the largest marketplace of electronics in China. Photo: Chen Qingqing/GT

Shenzhen IT sector yearly value added



Editor's note


Shenzhen, which was an unremarkable fishing village in the1970s, has grown into a metropolis with the third-biggest GDP on the Chinese mainland thanks to the country's reform and opening-up that began in 1978. Today, the city is often considered a new Silicon Valley, as its information technology (IT) industry output accounts for nearly 20 percent of the total output of this sector in the country.

On the one hand, the rise of Huaqiangbei, an electronic marketplace located in the city's Futian district, mirrored the development of the city and its IT industry; On the other hand, Shenzhen is also the birthplace of some Chinese internet companies like Tencent Holdings, which has become most valuable company in Asia.

Global Times reporter Chen Qingqing recently traveled to Shenzhen to see how the opening-up policy has influenced this city and its technology industry. This is a three-part story.



Inside Huaqiangbei, an electronics market in Shenzhen, South China's Guangdong Province, vendors sit behind glass counters filled with colorful components. They sell everything from smartphones to circuit boards to LED lights. Hundreds of stalls spread across several buildings in this shopping area, which has become a window of the country's electronics industry.

Cheng Yimu, a veteran in the local electronics industry, moved to Shenzhen from Beijing in the early 1990s. "When I first arrived at Huaqiangbei, it was an industrial park. No fancy skyscrapers, full of workers," he said.

"Sometimes, it took me more than 30 minutes to hail a cab here, as no driver wanted to come to this remote area," he told the Global Times.

Shortly after the country unveiled its reform and opening-up plan, Shenzhen, on the forefront of China's new economy, aimed at first developing its electronics manufacturing by establishing some factories in today's Huaqiangbei area.

It was also the birthplace of two companies, Shenzhen Electronics Group (SEG) and Shenzhen Huaqiang Industry Co, which have played crucial role in making the city a high-technology empire in the following years.

From billions to trillions

In the early stages of development, the market in Huaqiangbei was relatively small - only several floors in the SEG building, Cheng noted. "It used to be an electronics component market, a support facility for electronics manufacturing," he said.

It began to shift from component business to consumer electronics in the mid-1990s, particularly when personal computers became popular in China. "Then Huaqiangbei entered its glorious era," Cheng added. 

While the market was rapidly expanding in scope and scale, factories moved to the outskirts of the city, creating more room for stalls and shops. This marketplace, like a huge magnet, attracted migrant workers from around the country. Some even started their careers there. Inspired by success stories of some billionaires who earned their "first barrel of gold" at this gigantic market, young entrepreneurs believe they could also achieve their goals.

Li Lijiao, an entrepreneur who came to work in Shenzhen in 2007, now sells semiconductor devices at Duhui marketplace in Huqiangbei. She also handles agent services for other chip manufacturers in the country such as Jiangsu Changjiang Electronics Technology Co and Huizhou Desay Industrial Co.

"People from all over the world come here. Whatever component they want to shop for, they can find it here," she said.

"In my hometown, young people intend to find a stable job. They spend their leisure time playing mahjong," the 35-year-old woman said. "But I enjoy working here day and night. Sometimes, we're too busy to have a lunch break, but we know there are many people who earned a lot of money here," she added. 

When Cheng came to Shenzhen in the 1990s, the scale of the city's electronics industry was about 10 billion yuan ($1.59 billion). "Now, it's about 2 trillion yuan, and Huaqiangbei mirrored this rapid growth," he said.

Ecosystem

Huaqiangbei was not the only electronics marketplace that rapidly developed in the 1990s. Places like Zhongguancun district in Beijing also became a hub of electronic products after the Chinese government encouraged further development of the information technology (IT) industry. 

When other marketplaces faced declines in recent years, Huaqiangbei survived. "After the boom of electronic products, both the PC and smartphone markets became saturated, and major marketplaces in the country have been threatened, including Huaqiangbei," Cheng said, noting that the explosion of e-commerce has also made this trend apparent.

"But Huaqiangbei is not only an electronics product marketplace, it has a whole ecosystem of electronics manufacturing," he said.

A one-hour drive from the market, thousands of factories on the outskirts of Shenzhen and its neighboring cities such as Dongguan and Huizhou serve as the backbone of this IT industry.

"Manufacturers source products at Huaqiangbei and put prototypes into the market at the same time. It's a two-way business," Cheng said.

Posted in: ECONOMY,COMPANIES,BIZ FOCUS

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