Huaqiangbei trades computer chips for lipsticks

Questions of authenticity

"These cosmetics products are cheap, but are they genuine?" That's the question almost every consumer asks. It's a fair one, too, given the speculation a decade ago that Huaqiangbei was full of "fake phones".

Lin said Mingtong's management insists that retailers immediately vacate the mall and even the entire Huaqiangbei area if even a single consumer complaint about fake goods is upheld.

Huang Saibao agrees with the harsh punishment.

"All our products are genuine. No stallholder can afford to risk destroying their reputation and business by bringing in even one illicit product," he said, adding that the cosmetics business is so lucrative that there is no point cheating customers.

Despite that, Lu Lin has adopted a wait-and-see attitude toward the transition. Since he started his business in 2006, he has been selling cellphone components and smartphones in Huaqiangbei.

"My strategy is relatively conservative as I don't have enough startup capital for a cosmetics stall and it's risky to lend money. Although the electronics market is shrinking, I still make a profit," he said.

"It's hard to claim that every beauty product in the market is genuine. The merchants here always want to make money."

Having experienced Huaqiangbei's ups and downs for more than 20 years, Lin said cosmetics only account for 20 percent of total business at most, and despite the current soaring demand and huge market, it is still uncertain if the makeover will be permanent.

Huang said, "The message for Huaqiangbei's merchants is this: if you dare to innovate and struggle, you will always have a chance of making good money."

Pei Pei in Shenzhen contributed to this story.