Buying electronics in China can be tough. First, there are only a handful of product-approved stores. For example, if you want to buy an Apple product in Shanghai you need to find the Apple approved venue listed on the legitimate Apple website store location page and then only buy from that store. Fake products are great because they are cheaper, but they are also lower quality and more likely to break and have software issues. In the end, its smarter and cheaper to buy the real deal. You can find that in Shanghai, but you’ll be paying a 17% VAT on all electronics that are imported, which may make them more expensive than back home.
Buying a phone in Shanghai is the same deal, you need to either get a legitimate phone or else deal with the very high probability that it will break. However, theft and loss of iphones is high, and people report losing their phones in taxis frequently. Don’t expect anyone to answer or return it if you lose it– any device found is considered free game.
There are a few registered areas where you can buy electronics, like Xujiahui or Nanjing Road. But this area is also where a lot of hawkers hang out. You can follow them if you want, but there have been many reports from travelers that security at the airport that things are getting confiscated if they are fake. This goes for high end fake clothing, purses, perfume and especially electronics.