Silk Street

Introduction

Described by China Daily news agency as "the third best-known tourist destination in Beijing after the Palace Museum and the Great Wall," Silk Street (aka Xiushui Market) attracts approximately 20,000 visitors daily (from 9am to 9pm) on weekdays and between 50,000 to 60,000 on weekends as of 2006. This 35,000 square meter complex houses 1,700 retail vendors and over 3,000 salespeople spread over seven floors with three levels of basements. Many of the stalls have over the years gained local and internationally reputation for selling counterfeit luxury designer brands at relatively low prices. Some have carried on this trademark despite growing pressures from the management, the Chinese government, and famous name brand companies.


Debuted on March 19, 2005 and replacing the old alley based Xiushui Market, the current Silk Street establishment has diversified their business scope. In addition to selling fashion apparels & accessories such as hats, handbags, shoes, belts, sportswear, silk fabrics like their predecessor, the new Silk Street have introduced traditional Chinese handicrafts, antiques, calligraphy, carpets, table cloths, bed coverings, paintings, hand-knit dresses, toys, electronic gadgets, trinkets, and fine jewelry. Reputable Tongrentang Pharmacy, Quanjude Peking Roast Duck restaurant, and multinational coffee and restaurant chains such as Lavazza, SPR Coffee, Caffe L'affare, Subway (restaurant), and TCBY have also joined Silk Street's bid to become the "ultimate one-stop tourist destination" in Beijing. Invested and constructed by Beijing Xinyashenhong Real Estate Development Co., Ltd. and managed by Beijing Silk Street Garment Market Co., Ltd., Silk Street is built along Line 1, Beijing Subway next to Guomao (China World Trade Centre) with a direct basement link to Yonganli subway station (Exit A).

History

 

The original outdoor Xiushui Market (a.k.a. Silk Alley) was located in Xiushui Dongjie, Southeast of Ritan near the First Embassy Area of Beijing. The shopping alley consisted of 410 stalls selling mostly knock-off luxury name brand garments, silk products, and tourist souvenirs. It attracted 20,000 locals and foreigners on weekends for a total annual sales volume of 100 million yuan (US$12.5m). After 20 years of business, the old Xiushui Market was ordered to close down for demolition on January 6, 2005 due to fire safety hazards, security issues, and the absence of land permits from individual landlords. The application for demolition was filed on July 2004 by the Beijing Urban Planning Bureau, the Chaoyang Public Engineering Committee, the Chaoyang Department of Public Security and Fire Fighting, and the Chaoyang Foreign Liaison Office.

Intellectual Property Rights Disputes

One of the political incentives behind the transfer of the old Xiushui Market to the current Silk Street establishment was related to the unregulated sales of fake goods according to Yin Xiaobo, an assistant to the GM of the Economic Management Center of the JianGuoMenWai Community in Chaoyang District, Beijing. The new Silk Street complex was viewed as a more effective battleground in regulating and eradicating trademark infringements among private retailers. On November 23, 2004, Beijing Administrative Bureau for Industry and Commerce and Beijing Commercial Bureau listed the new Silk Street as one of nine streamlined markets in Beijing in accordance with "Strengthening Market Supervision and Crackdown on False Commodities." Since the grand opening on March 19, 2005, Silk Street has conducted reforms in attempt to regulate and crackdown on violations of IPR in the market. Despite the efforts, counterfeits were still found inside the shopping center. As a result, five global name brand giants which included Prada, Chanel, Louis Vuitton, Gucci and Burberry were granted compensation of 20,000 yuan (US$2500) each from the landlord and five of its stall holders on April 14, 2006. In June 7, 2006 a deal was signed with European luxury name brands promising to evict tenants found violating trademark rights. The Intellectual Property Rights Protection Fund of 30 million yuan (US$3.8m) collected from its tenants was established by Silk Street in a collective effort to curb infringements of trademark rights. On August 30, 2006, 30 vendors received 10 million yuan (US$1.3m) in rent refunds from that fund as a reward for respecting IPR protection laws. An estimated 80% of vendors at Silk Street have acquired trademark authorization as of August 2006.