SHANGHAI ­— The infamous Xiangyang Fashion and Gifts Market here has finally closed.

The market, which primarily dealt in counterfeit branded handbags, wallets, apparel, sunglasses and other accessories, ceased business at 9:30 p.m. on June 30. Vendors have until Friday to vacate the premises.

The final days of operation saw the market crammed with last-minute bargain hunters, as vendors slashed prices to unload inventory. While Xiangyang’s primary clientele in recent years has been Western tourists, the low prices pre-closure attracted mostly local shoppers. Even policemen, waiting to shut the place down, were busily snapping up merchandise.

The closure marks a major symbolic strike against the piracy of major brands in Shanghai. The outdoor, downtown market was the city’s most visible face of the trade in counterfeits. Opened in 2006 after the nearby and similar Huating Market was demolished, Xiangyang contained 800 shops and saw annual sales of 400 million yuan, or $50.1 million, according to Shanghai Daily.

The municipal government and the Chinese press are claiming that Xiangyang’s closure represents a significant victory in the battle against piracy. However, the shutdown actually resulted from the landowner’s plans to develop the plot, not a harder government stance. Shanghai has dozens of similar apparel markets selling mostly counterfeits, albeit smaller, less central and less known, and many of these are expanding to accommodate former Xiangyang vendors, while several new markets are opening. The bulk of Xiangyang operators said they would move to a market in Longhua, in southern Shanghai, and markets in the western Hongqiao and eastern Pudong areas also ranked high among destinations. Another very central market, at Huaihai and Xizang Roads, is slated to open in September.

As the market in counterfeits shifts locations, soaring rents in Shanghai have made the black market more prevalent, and more and more vendors are opting to eschew shops altogether. Nonexistent a year ago, fake bag sellers now crowd busy sidewalks, subways, overpasses and parks, selling wares out of large canvas satchels.

This story first appeared in the July 6, 2006 issue of WWD. Subscribe Today.

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