Economic Lessons from China’s Secret Art Factory

Published May, 2019

Chances are that at some point today you will see an artwork that was created in a Chinese urban village called Dafen. Located across the border from Hong Kong and buried deep within the megalopolis of Shenzhen, this unusual place is a hybrid of retail, factory and residential housing all catering to mass replica art manufacturing.

Here you can buy as many Van Goghs, Monet’s, and classical Chinese landscapes as you’d like, or commission a painting of your own. Hundreds of budding artists work here to recreate famous masterpieces to sell overseas at cheap prices.

Dafen Oil Painting Village, Shenzen China, Google Maps 2019

During a 2018 trip I was struck by how the village had multiple facilities specialising in everything you would need to mass produce art — frame makers, canvas printers, material, international shipping services etc.

The area is economically successful, bringing in a revenue around $630 million annually. It got me thinking about the infrastructure and business model of the place — a self contained hybrid of residence and industry specialising in a single industry. Perhaps there are lessons here other places would be wise to study for similar success.

Café Terrace at Night Replicas, photo Adrian Raudaschl

Lean Canvas Takedown

The Problem

  • People want to improve their environments with art
  • People want to create a specific impression using famous artwork
  • People want unique artwork at a low price
  • Getting unique artwork can take a long time

Ignoring the concept of art as an investment, the problem art aims to solve is the improvement of human environments by design. Some may want a Monet to brighten up a small bathroom, others to have their faces grafted onto participants of Leonard’s last supper.

Artwork though is not cheap. This is especially true if you want something custom or a famous replica complete with textured paints.

The ‘pain’ of getting art is very situational. The pain will be more real if you suddenly find yourself with the job of getting artwork for a hotel, office or worse a whole chain of businesses. Suddenly picking something at scale of reasonable quality with mass appeal becomes challenging. This is possibly why replicas of famous artworks have appeal as a ‘safer’ bet.

The mantra “nobody got fired for hiring IBM” may well apply as “nobody got fired for buying a Picasso”.

Customer Segments

  • Hotels
  • Businesses
  • General public
  • Designers
  • Resellers

Any owner of a wall is a potential customer — though that may vary depending on how pretty the wall. People looking for artwork at affordable prices qualify, but the larger lucrative segment will be B2B looking to improve the decor of commercial and office spaces.

Another interesting segment are ‘resellers’ like museums or tourist shops looking to capitalise on selling merchandise. A fun example of this is a Van Gogh store located outside the museum in Amsterdam. This place infamously imported artwork and starred in a documentary where they brought the replica artist over from China. Hilarity ensues when he sees the markup on his prices. Be sure to give China’s Van Goghs a watch even if you find this mildly interesting.

Dafen artists working outside studios in the alleyways, photo Adrian Raudaschl


  • Centralised location of art talent
  • Access to wholesale art supplies
  • Access to hardware assisting in art production
  • Access to package supplies
  • Access to worldwide shipping services
  • Online retail operation

Dafen Business and Logistics Model

We need to be able to satisfy the worlds demand for mass appeal artwork with customisability and quality in mind. This is not about just creating prints, customers want something that resembles the original work the replica is based on.

The way Dafen achieved this is through the environment it created. The village is a mosaic of micro industries catering to art production. Raw materials like wood, clay, paints, oils, brushes and canvases come in one way and businesses will transform those into frames, tools and final artworks out the other. Everything you need can be found here, and if not the resource network and local knowledge exists to create it.

Previously access to talented artists was a requirement, but the village has innovated helping turn the process into a grandiose colouring-in exercise. As you walk the alleyways you can see the large scale printers and clusters of tablets and phones people use for templating and tracing in assembly line process of workers adding additional layers of paint to a canvas. The result is a faster process with more consistent results and minimal training required.

It’s not hard to imagine that if required the village could up their game with innovations like 3D printed oil canvases.

Tying the whole operation together is a steady stream of online orders from around the world and a robust logistics service complete with packaging facilities. Recently it looks like the village has brokered a deal with Alibaba to maximise their customer funnel.

Photo Adrian Raudaschl

Unfair Advantage

  • Access to low cost talent
  • Low cost art supplies
  • Low cost shipping
  • Access to specialised services and hardware for art production
  • Reputation for quality
  • B2B exclusive contracts

Dafen relies on its access to low cost talent, supplies, materials and reputation to dominate this market. Knowledge and expertise are key differentiators helping them produce difficult pieces, especially at scale. Through this they have been able to build reputation helping establish lucrative B2B contracts.

Revenue Streams

  • Selling artwork

The lifeblood of this cottage industry relies on selling artwork. Selling at scale has enabled local specialised businesses to appear, further enabling the community to produce a wide variety of high quality work at an affordable price.

Business Costs

  • Labour
  • Art materials
  • Shipping materials
  • Shipping costs
  • Retail/workshop location rent
  • Online service fees

Much of this has already been covered above. Other costs of note are the cost of the retail spaces and workshops within the village, as well as commission charged for online retail services like Alibaba or self hosted solutions.

Photo Adrian Raudaschl

Final Thoughts

From Adrian

I am completely enamoured with the idea of specialised urban cottage industries. Though I have described Dafen here as an example of such an industry catering for a global audience, there are examples like this throughout China.

Something about being able to bring together materials and talent in a space spawning a mosaic of micro businesses to serve a larger business goal is very appealing to my inner capitalist.

In a future lean canvas I will explore this idea of China’s hardware equivalent of Silicon Valley — ‘Huaqiangbei’. It has a similar model as described here, but on a much larger scale.

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