The black market Polvos Azules is indistinguishable from a formal mall. Photo credit: Manuel Vigo

Inside a Black-Market Shopping Center

In one of the busiest shopping complexes in downtown Lima, thousands of Peruvians squeeze past each other in narrow corridors and jockey for space in tiny rooms. Music blasts from stalls as shopkeepers try to lure customers with seemingly infinite rows of goods. The smell of food and plastic lingers in the air.

This is Polvos Azules, an epicenter of retail activity in Lima and a place often referred to (in an oxymoron) as the city’s “official informal market.” Legend has it that Polvos Azules, Spanish for “blue powders,” got its name in the 1540s from the material used by leather artisans to dye their skins on a small street behind the Presidential Palace. Five centuries later, the capitalist spirit embodied by those early merchants is alive and well, their leather goods replaced by faux-Levi’s and bootleg Magic Mike DVDs.

Today that shopping center is one of the city’s biggest retail destinations, and a major source for pirated electronics, knock-off clothing, and contraband shoes — despite being located just three blocks away from the country’s Supreme Court building.

Formerly dirt floors are now tiled.

Polvos Azules is a study in contradiction. According to Gestión, a local business newspaper, 90 percent of its stores are “formalized.” They pay taxes (to some degree) and adhere to basic safety standards. The shops are fully licensed by the city, and much like Lima in general, the building itself has been gradually transforming into something that, at least visually, appears formal and regulated. Dirt floors have been upgraded with ceramic tiling, many of the stores now take most major credit cards, and even Interbank, one of the country’s largest banks, has opened a branch inside the sprawling complex.

But this drift toward aesthetic formality hasn’t changed the fact that the vast majority of the inventory at Polvos Azules continues to flow in via the black market. What’s more, data and anecdotal evidence suggest that its customers prefer it this way. A recent study found that on average, the market boasts almost four times as many sales per square meter as Jockey Plaza, one of the city’s largest upscale malls.

The complex is a good place to find DVDs before they’re officially released.

In many respects, Lima is a place where piracy has become institutionalized. Most Peruvians purchase illegally sold items in one form or another. In that context, the enduring popularity of Polvos Azules isn’t hard to understand — not only does it offer “brand-name” goods for a fraction of the price, it generates employment for 5,000 residents, according to an estimate by the International Labor Organization.

And it’s not just a hit with locals. One seller says that in the run-up to Christmas, tourists from countries where bootleg goods are harder to find stock up at Polvos Azules before heading back home.

“They come before the holidays, in October and November,” she says of the tourists who gleefully hoard her Lacoste and Abercrombie imitations, paying prices they can hardly believe. “They take big loads, suitcases full… and they sell them as originals.”


Want more? Read the full article here.

This story is part of the Rockefeller Foundation’s Informal City Dialogues, a year-long collaboration with Next City exploring stories and insights from six rapidly urbanizing cities around the world.

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