What $50 Buys You at Huaqiangbei, the World’s Most Fascinating Electronic Market.
Tags: Technology, Shopping, Shenzhen, Culture, China

We’re building the Model 01, a hackable ergonomic keyboard with mechanical keyswitches, programmable RGB LEDs, opensource firmware, and a gorgeous hardwood enclosure. We expect to ship later this year. You can pre-order one today at https://shop.keyboard.io. The discount code “BOXOFCRAP” will take fifteen bucks off your order.

Last summer, we ran a pretty successful Kickstarter campaign for our first product, the Model 01 keyboard. Since then, we’ve been hard at work getting the first run of a few thousand keyboards manufactured. It’s been a bit more of an adventure than we’d expected, but things are proceeding apace.

Unsurprisingly, setting up manufacturing has meant that Jesse’s been spending…rather a lot of time in Shenzhen. Mostly, his days at the factory start at 9:30 AM and wrap up somewhere between 8 and 10 PM. But on Sundays, he’s been at loose ends. This trip, he decided to do something about that.

We’ve long been fascinated by the Huaqiangbei electronics market area of Shenzhen. (Hereafter, we’ll just call it HQB.) If you need some bit of electronics or a phone accessory, you can find it in HQB. There is an entire multi-floor shopping mall that sells nothing but phone cases. There’s one that specializes in smartwatches. There’s a mall that sells cellphones wholesale. There’s one just for surveillance cameras. And then there are the component markets. Need a chip? Or 250,000 chips? Somebody there can get them for you.

Seeed Studios’ map for makers is probably the canonical English-language reference for the HQB area. You can download a free PDF of it here: http://www.seeedstudio.com/document/pdf/Shenzhen%20Map%20for%20Makers.pdf

While most vendors in the markets will (grudgingly) sell you one of something, that’s not really why they’re there. HQB is where you go to buy new products in volume. The price for one of something is…a little bit higher than the unit price if you’re buying a bunch of something.

Up until now, we’ve had only the vaguest sense of what volume purchase in the markets was really like. We, of course, were never going to be in the business of buying smartwatches, drones, or SD cards in volume. Or were we?

About a month back, Jesse asked friends on Twitter if they’d pay fifty bucks to get a box of random crap from Shenzhen. It quickly became clear that we weren’t going to have any trouble finding customers for this one.

Once in Shenzhen, Jesse enlisted the help of his friend Helen Tan. They made a plan to spend Sunday in the market and Jesse posted the following product listing to the Keyboardio store:

We’ll send you a box of worthless amazing crap from the electronics markets in Shenzhen, China. We’ve got some idea of what will get thrown into your box, but we won’t know for sure until after we’ve gone shopping. It’ll probably include some computer or phone accessories, maybe an input device or actual phone or something if we see something weird and cool and crappy enough. If you have specific requests, send them to @obra on Twitter. To maximize the amount of dreck we can send you, slow-boat shipping to anywhere in the USA is included in the price of the box. Expedited shipping and delivery to addresses outside the USA are not available at this time. None of this stuff comes with any warranty. It’s exceeding likely that the box will contain items known to the State of California to cause cancer. Limit: one to a customer.

Not really being sure what we were getting ourselves into, we limited this run to 25 boxes. Jesse tweeted about the new product offering and we sold out in less than an hour.

Sunday rolled around and Jesse and Helen met up to go shopping. We didn’t really know what we were going to be buying. Our initial budget was that we wanted to spend about $30 on crap, $10 on shipping and take home a $10 profit. Things didn’t quite work out like that, but it gave us a decent framework.

We started off in the phone accessories mall.

iPhone Repair Stencil

$0.60 (Compare at $4.39 http://amzn.to/2dqmQPw)

Our first purchase was a soldering stencil for doing chip-level repair to an iPhone 6S+.

In the west, we generally treat a phone’s logic board as a single component. If it’s fried, it’s fried. Just toss it out and replace it.

In Shenzhen, it’s not uncommon for a phone-repair tech working in a tiny little market stall to perform incredibly fiddly chip-level repairs to a mobile phone.

This is the tool they would use to apply new solder paste when replacing individual chips on an iPhone’s logic board.

There was no volume discount for buying the stencils. The shopkeeper thought we were a little bit odd for buying 30 copies of the same stencil, rather than a kit of different stencils for a variety of late-model phones.

The shop we bought the stencils from sold a variety of tools and supplies for electronics repair. That included the regular stuff like tweezers and solder, but also a bunch of weirder stuff.

One of the items we really wanted to buy for the boxes was a set of *cough* unofficial iDevice repair manuals. These books each weighed at least a pound and featured detailed documentation of every chip, screw and component of a given Apple device. They walked through how to remove, test, repair and replace each chip, with detailed photos.

iRing

$0.60 (Compare at $14.99 http://amzn.to/2duxF1C)

Our next stop was the iRing store. The iRing is a curious item. It’s incredibly popular in China and something almost nobody in the US has. The concept is really simple. It’s ring you stick to the back of your phone. You can use it to hold your phone or as a cute little integrated stand. We decided to splurge and buy the version that had reusable adhesive and an included hook for hanging up your phone. (We still don’t really “get” the hook, but the ring is amazing enough on its own that we’re sure we’ll fall in love with the hook.)

There are four or five shops that sell nothing but iRings in HQB. The one we ended up at had a selection of probably over 1000 designs, ranging from simple unbranded rings with single-use adhesive to rings studded with fake gems to rings with pictures of your favorite Disney characters, NBA teams and multinational brands. The cheapest rings went for $0.37. The most expensive topped out at nearly $2.

USB Fan

$0.45 (Compare at $6.99 http://amzn.to/2dqlnZP)

We knew there was no way we could ship the boxes of crap without a selfie fan.

What is a selfie fan you ask? Why, it’s a fan to give your hair a nice windswept look when you’re taking selfies. The model we chose is especially interesting because it features a combined USB+MicroUSB connector. That means that it will work great with your Android phone or with your USB powerbank.

Everybody got a blue fan, except for one lucky individual. That person got a true box-of-crap experience. Their fan is missing the blade. If they write to us, we’ll drop the blade in the mail.

Later in the day, we found ourselves in a slightly more remote part of HQB and asked another vendor what they’d charge for these fans. Turns out, we’d been ripped off. This second vendor only wanted $0.38 cents per fan.

USB Light

$0.11 (Compare at $6.99: http://amzn.to/2dQ0EfW)

The next product in the box of crap is a cute little bendable USB light. You plug it into a USB port and it lights up. If you happen to have a USB powerbank, you now have a somewhat unwieldy flashlight.

“32GB” MicroSD card

$2.13 (Compare at ???)

It’s a MicroSD card. It is marked as being a 32GB card. If you stick it in your phone or computer, it will report that it is a 32 GB card. But it’s not. It’s an 8GB card with trick firmware. You should always be able to get at the last 8GB you wrote to the card, but….don’t try it with any important data or in any important device.

It was a lot easier to buy guaranteed fake cards than we expected. We had to go to one of the slightly seedier electronics malls. We had to go up to the second or third floor. We had to look for one of the vendors who didn’t have a prominent flash chip testing machine on their counter…and that was about it. There was some discussion of how much “real” storage we wanted in the cards. We asked about getting cards with only 2GB of real storage, but the vendor said 8GB was the lowest she could go. After the sale was finalized, the salesperson admitted that she would have charged us the same amount for the “256GB” cards

Interesting fact: The card can be modified to report any amount of storage as being available. The vendor said that she couldn’t do it at her booth and that she didn’t have a data sheet, but that if we wanted, she could send the cards back to the factory to be reprogrammed for us.

For a bunch of fascinating technical detail about fake SD cards, check out this post and this post from bunnie.

Stickers

$0.06 (Compare at ???)

We’d hoped to include some genuine fake Apple and Samsung “Do Not Tamper” stickers in the boxes of crap, but couldn’t find any for sale at the first few sticker booths we stopped at. We briefly considered sending “QC OK” or “Inspected by 13” stickers, but fell in love with these warning stickers. And hey, they didn’t exactly break the bank.

Lunch break

On our way to lunch, we totaled up how much we’d spent during our morning shopping spree. A whole $3.95. We knew we were going to have to up our game after lunch or we weren’t going to have nearly enough stuff to make our customers feel like they got their money’s worth.

Programmable LED Name badge

$4.20 (Compare at $13.06: http://amzn.to/2cQTN3P)

After recharging ourselves with spicy noodles, we set out for HQ Mart. Specifically, we set out for the top two floors of HQ Mart, which may well house the world’s greatest concentration of LED vendors. It’s a mix of LED sign vendors, RGB LED strip vendors and LED factories. We considered buying RGB LED strips and wireless controllers. We gaped at gorgeous LED-base reproductions of old-fashioned lightbulbs. We got headaches from giant walls of some of the brightest LEDs we’ve ever seen. We recoiled in horror when we realized some of the glowing LED strips we were handling were plugged directly into 220 volt AC.

And then we stumbled on an LED sign vendor selling cute little programmable LED name badges. They seemed about right for the box of crap, but, at $4.20 for their cheapest model, the price felt a little high. We took the vendor’s name card and went wandering around to try to find another source. After talking to another three or four vendors selling the same badges for $5 or $6, we circled back to the original vendor and made the purchase.

While they were counting out the 30 units, we noticed that the giant screen behind the vendor’s desk appeared to show her sitting there counting out product. With a little bit of pantomime and a little bit of translation by Helen, they explained that it was actually an interactive wall that they’d built around a Kinect sensor. The vendor made me sit down at her seat and practice AR bowling and taking snapshots with a handwave gesture.

The LED badge comes with a MiniCD with Windows drivers on it, but you can download the same software from the manufacturer’s website: http://www.minileddisplay.com/en/download/

(Trivia: it looks like the LED sign has a more powerful CPU than the Keyboardio Model 01.)

H6 Smart Watch

$9.74 (Compare at $24.99 http://amzn.to/2dpnxLo)

Inside each box is an H6 Smart Watch. There is no brand name on it, nor anything that points to the name of the factory. That’s not too surprising, because there’s a fruit company in Cupertino who might have some issues with their industrial design.

We’d actually done a bit research during the week before we went shopping. We knew we wanted to get a smartwatch or a drone into the boxes. We figured that either was likely to run us $15–20 and were pleasantly surprised when the first few vendors we talked to quoted us prices in the $12–15 range.

Wandering around the smartwatch mall on the ground floor of the “SEG Factory Store” building, we saw the same products in every shop. Except each had a different build quality, model number, and a slightly different firmware build. Some vendors needed to show us two or three sample units before one would turn on. Each time, we’d ask them to quote a price for 30 pieces. Prices hovered around $12.

(If we knew then what we know now, we probably would have skipped both of them and gone for more crap without Lithium Ion batteries.)

Yes. 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.

Unlike the Apple watch, you can’t change watch bands. If you look carefully, you’ll see that the GSM antenna is integrated into the molded silicone rubber band.

Inside the watch is either a MediaTek chipset or a local clone of one. The watch is, we believe, running Nucleus, MediaTek’s watch operating system.

The watches are running Mediatek Nucleus. Its version numbers are…somewhat opaque.

The watch vendor was very clear with us that the devices only came with a six month warranty. For a variety of reasons, including the fact that it cost less than ten bucks and the fact that we described the contents of our box as “useless crap”, we are not passing that warranty on to our customers.

The economics of how to make a watch phone for $9.74 were completely bewildering to us. If we could get the price down to 65 CNY just by buying 30, how much could they possibly cost to make?

As it happens, a friend of ours in Shenzhen has a friend who is a salesperson at a smartwatch factory. We talked him into calling his friend and asking her what she knew about watches like the ones we bought.

She asked for photos….and then told us that her factory sells an identical model. She told us that next time, we should just deal with her directly, as we could have saved a lot of money. If we bought 30 watches directly from the factory, they would only cost us $7.49 each. So, the reseller made about $67 profit on us.

If the factory sold the watches for $7.49, how much could they possibly cost to make? That’s a question that can be awfully hard to get answered. Not really expecting an answer, we asked our friend to ask his friend. She was happy to tell us: $6.

Six dollars.

Six dollars for: a GSM chipset, a CPU, an LCD screen, a battery, a PCB, a metal housing, a molded silicone watch band, a MicroUSB cable, and a box. And the labor to assemble and test all of that.

At this point, we were still feeling really good about our budget. We had ideas and set off in search of a cheap drone store that had been recommended to us.

Qi Charger & Charging adaptors

$3.38 (Compare at $30.97: http://amzn.to/2dqvePn, http://amzn.to/2dQciYx, http://amzn.to/2dHCRP4)

On the way to the drone store, we cut through a back alley and saw a small shop selling wireless chargers and little flexible circuit boards. Upon closer inspection, we discovered that the flexible circuit boards were Qi-compatible wireless charging adaptors for phones that didn’t support wireless charging out of the box. You just stick them on the back of your phone (or inside your phone case) and thread the connector into your charging port.

On a lark, we asked what these things might cost. We were told that the wireless charging adaptors were $0.94 each if we bought 30, and that the charging bases were $1.35.

We hadn’t been planning on throwing a wireless charger into the box, but it sounded like a good deal, so sure. Why not?

As soon as we said ok, the vendor admitted that they didn’t have 30 of the inexpensive chargers. We’d have to go up to the next cheapest unit. It cost 10% more. What did we get for that extra $0.15? Well, the space-ship like charging base had an additional embossed marking on it: “NCC-1701”

Sold.

Lightning / MicroUSB cable

$0.75 (We couldn’t find them on Amazon)

The first drone store we visited was a total bust. Their cheapest option was a budget-busting $14.99. Asking around, we were told that there might be another drone store down the street that had more affordable options.

As we made our way down the street, we ran across a cable vendor selling…what may be the most wonderfully wrong cable we’ve seen in years, a combined lightning and MicroUSB cable. Not one of those cables that splits and has a lightning connector next to a MicroUSB connector. Not one of those cables that has a MicroUSB connector and a lightning adaptor.

A cable that has a regular USB connector on one end and a reversible connector on the other end that fits inside a MicroUSB port and also fits inside a lightning port.

It violates the MicroUSB spec. It violates the Lightning spec. It’s wrong. Yet, somehow, it’s also incredibly right. It should not work. Yet, somehow, it does. When we showed one to a friend who works for Apple, it pretty much reduced him to distraught gibbering.

When we visited Shenzhen in July, we found these cables at one or two shops. Now, they are everywhere. We’ve seen five or six different variations on the connector design. Some are pretty well made. And some will probably fall apart after only a few uses.

When we asked how much, we were told they were about $1.50 each. As we explained that we wanted thirty, the price came down to a more reasonable $0.75. The vendor experience wasn’t the best. These folks were the only vendor the entire day who didn’t seem to appreciate our business and who didn’t provide us with a receipt. Even the woman who sold us three dollars worth of LED lights gave us a receipt.

At this point, we probably should have stopped, declared success and headed off to the DHL office to package up the boxes of crap. But if we could find a drone cheap enough, we wouldn’t completely blow our budget.

Mini Drone

$9.74 (Compare at $18.99: http://amzn.to/2dQduel)

A thirteen dollar iPhone-controllable camera drone.

We finally found the “other” drone stores. The first one didn’t have anything under $20. Not expecting much, we walked into the drone store next door and Helen asked them what they could do for an order of 30 units. They said that their cheapest drone was $10.19, but that it was really worth it. The shop was pretty cramped, but it was live demo time. They found us seats, handed us bottles of water and as we got comfortable, they put a very cute little drone up in the air. As someone who we’re pretty sure was the owner’s son demoed the drone’s abilities, they talked up its features and what great reviews their drones got on Amazon. Helen managed to talk them down to $9.74 per drone.

Jesse splurged and bought himself one of their nicer mini drones. You can control it over WiFi from your iPhone or Android phone. It has a built in camera that can stream video in real-time. Sadly, at $14.99, it was just a little bit too expensive to add to the boxes of crap this time around.

At this point, we were really done shopping, so we headed back to the shipping broker’s office to split up the loot into 30 boxes.

On our way, we narrowly avoided a run-in with a vicious street gang.

Shipping

$28.46

There’s a whole street in HQB known as “Shipper’s Alley.” It’s a mix of express shipping offices and packaging vendors. Thankfully, Helen was able to recommend a shipper she’d worked with before.

We brought our bags and boxes in at about 6pm, just as most shops started to close. We’d planned to use Hong Kong Post’s weight-based shipping option for the boxes of crap. It was inexpensive (About 12 USD per box) and relatively quick.

After a bit of discussion with the shipping agent, we realized we had a bit of a problem. She’d noticed that the smartwatches had Lithium Ion batteries. Hong Kong Post’s rules don’t allow shipping of Lithium Ion batteries. The agent suggested that the most cost effective solution would be to split the shipments up — The watches would go by DHL and everything else would go by the less expensive HK Post service. In retrospect, we think it would have been cheaper to just send everything by DHL.

(Astute readers might guess that the drones and LED signs also have embedded LiIon batteries. The shipping agent did not.)

So, off we went to buy boxes for the HK Post shipments, while the shipping agent started work on address labels. The boxes cost $0.12 each. Initially, the shipper thought that the watches could be shipped without a separate shipping box, but later reconsidered. They ended up giving us those boxes for free.

We handed the shipping agent a USB stick with a spreadsheet containing everybody’s addresses. She got to work filling out shipping labels.

Jesse borrowed a computer from the shipping agent to write a brief letter to our customers and ran off 30 copies.

Helen and Jesse sat down and started to fill up 60 boxes with worthless crap.

Turns out, kitting and packing boxes is fairly time consuming. It probably took us an hour.

The professionals are…a lot faster. They are truly wizards with tape guns.

You should watch this video, even though Jesse shot it in the wrong orientation

We ended up sitting around for another hour while the professionals wrapped each of our boxes in an impregnable tape barrier and the shipping agent continued to work on address labels. We ran into a small snag when she discovered that not all of our customers had provided a delivery phone number. We got around this by using Jesse’s US cell number for all of the missing customers. About three days later, he started to get…rather a lot of status update SMSes from DHL.

Because of the battery SNAFU, shipping ended up coming out to a lot more than we’d expected. The DHL boxes each cost $16.49 to ship and the HK Post boxes each cost another $11.85. We tried hard to convince the shipping agent that we’d be fine with everything getting put on a boat and showing up some time in November, but she told us that we’d need to be shipping a lot more stuff for the economics of ocean freight to even begin to make sense.

This was a one-day project, but it was a pretty long day.

Summing up

Every box-of-crap recipient got $31.76 worth of stuff at Shenzhen prices. If they’d bought everything on Amazon, they would have paid over $130.36. (We couldn’t find the fake SD card, flippable cable or stickers on Amazon.) Those Amazon prices aren’t always the cheapest option, but represent at least a little bit of bargain hunting. That maps pretty closely to how hard we fought for deals in HQB.

Because of the shipping issue, we lost $10.22 per box. Over all, though, the experiment was a success.

We got to learn a little bit about “volume” purchasing in Shenzhen, found out some interesting details about things we’d seen in the markets before and learned about some of the headaches of shipping packages from China to the US. (There’s a reason we’re paying professionals to help us ship the Model 01.)

Based on this first experiment, we’d be willing to do another set of boxes the next time we have a day to kill in Shenzhen, but might try to find someone to help us pack and ship boxes a bit more…efficiently. If you think you might want a box of crap next time around, follow us on Twitter or sign up for our mailing list.

We’re building the Model 01, a hackable ergonomic keyboard with mechanical keyswitches, programmable RGB LEDs, opensource firmware, and a gorgeous hardwood enclosure. We expect to ship later this year. You can pre-order one today at https://shop.keyboard.io. The discount code “BOXOFCRAP” will take fifteen bucks off your order.