Unbelievable. I just had to pick it up and have a look. A small, bright red plastic dolly's medical kit with a white cross on it. I hadn't seen one of these since I was a child and I'd assumed they'd stopped making them. Yet here it was again, being sold to adults for pounds 3.90, at Wong Singh Jones in Portobello Road.

'This is a sweet shop for grown-ups,' explains Paul Spencer, the shop's owner. 'Adults sometimes come in here to buy something for their kids, but they're really buying it for themselves.'

The shop, crammed with cheap, lurid thriftshop baubles, is a global magpie's nest, a third-world corner shop relocated to West London. Morroccan water jugs made from old tyres, religious candles from India, Jamaican aphrodisiac air fresheners, kiddie bracelets from Hong Kong, beaded curtains from Singapore gaudy gold and felt tissue boxes, plastic jewel boxes, fortune-telling fish, Carmex lip balm, flip-flop fly swats. And a cascading waterfall ornament with lights and plastic flowers. Third-world kitsch, childish junk, cheap trash. Yet West London trendies are lapping it up. Bad taste is in.

'Good taste is for wimps,' says Emma Bernhardt, who last summer brought the naffest car dashboard accessory, the crown air freshener, from New York to London. Like Paul Spencer, she makes a living peddling kitsch. Huge glass gear knobs with a religious theme, felt fringed car pelmets, and a big line in plastic. Colourful, tacky stuff that Mexican factories have been churning out since the Fifties. She uses it to make everything from lampshades to mini-skirts.

Yet she and Spencer could not be more dissimilar. 'I was born with good taste,' says Bernhardt, mocking her spotless middle class credentials. 'My father is an architect and everything I grew up with was tasteful.' It wasn't until she wound up working for style bible Elle Decoration in the late Eighties, that 'good' taste began to grate. 'Oh, I was a little Elle girl,' she scoffs. 'I always looked the part, a real style queen.'

One day she brought some fake Rococo bedside tables into the office and her French boss almost sacked her on the spot for style crime. 'It was then that I realised the nature of aesthetic judgement,' she recalls. 'I realised that there could be good bad taste, that bad taste was a lot more interesting than good taste.

'It's a rebellious reaction to the buyable stylish mediocrity of the Eighties,' she continues. 'The linen suit. Habitat. The Conran Shop. I wanted to wage war against all this.'

Paul Spencer's approach is less premeditated. A wily charmer, he fled his northern working class upbringing to find fame and fortune. And did, sort of. As a member of the Grey Organisation in the Eighties, a band of handsome anarchists who ran underground parties and rigged anti-art stunts (like throwing paint at Cork Street galleries), he enjoyed cultish, short-lived notoriety.

In the Nineties, with girlfriend Sophia Conran, he has pulled off an even cheekier stunt: flogging bad taste to the rich with the daughter of good taste Emperor Terence Conran as his partner. Spencer has a good sense of timing. In the Eighties, selling kitsch would have bombed; in the Nineties, anarchy is passe.

Spencer sees the success of his shop as part of the backlash against the conservative style and mores of the Eighties. 'People are bored of 15 years of Tory rule; now they want to have fun,' he asserts. 'They want to remind themselves of a more innocent time and buy things that are fun and frivolous.'

Like Bernhardt, he despises the smugness that seems to accompany good taste. 'Muji, Giorgio Armani, Terence Conran. . . it all has an ego which says 'this is it'. But a man down in Brick Lane or Calcutta, where I buy this stuff, might think a pink and gold clock with water coming out of the top is excellent taste. Who are we to say we know better?'

Originally, Spencer wanted the shop to sell useful utility items from the developing world: 'As if Mr Wong from Shanghai, Mr Singh from Calcutta and Mr Jones from Hartlepool had all met on holiday in Torremolinos and decided to open a worldwide hardware shop,' he says.

'But we soon began to see that the real fun was in the way that other cultures decorated their homes.' He and Sophie Conran began travelling to India, Morrocco, Hong Kong and parts of Asia to root out stock.

Buying kitsch takes a special kind of eye, and Spencer's bought a few turkeys in his time. Four hundred paper kites from Jaipur still sit in his attic. He was convinced they'd make great bedroom decorations; no one else was. Likewise 40,000 cardboard Chinese takeaway food pails, the kind you see in movies set in Manhattan. You win some, you lose some. In general, though, he wins.

These days he relies on friends who are travelling for his real gems from abroad, and goes to factories in Southall and the East End for much of his stock.

Factory owners don't quite know what to make of him.' They never want me to rummage around in the back, but of course that's exactly what I want to do,' he says. 'They're always saying, 'don't buy that, we've never sold it', and of course I'll buy it for WSJ and it rockets out of the shop.' When he recently stumbled across a rare and forgotten supply of foam roses on sticks for washing dishes, the factory foreman was stunned that he bought them. But they were a huge hit with trendies, ending up as a must-have on the back pages of Elle.

Bernhardt, who does most of her shopping in Mexico, says that the developing countries are where street culture originates. 'The idea of customising your car, or a car culture comes from the third world. There's an urban culture in many of these places where people live on the street.'

Third world manufacturing, she argues, has a naive rawness which gives it individuality and appeal. 'It's inefficient and badly made. But what's exciting about the kitsch I buy is that it's 'craft'. It's the opposite of slick, immaculate and soulless Western engineering.

'The Mexicans love doing business, but only do so in a very hands-on, word-of-mouth way. They won't send a fax, so when I'm there I often get five big men in suits arriving unannounced at my hotel to hand me a piece of paper.'

Bernhardt is adamant that she is not exploiting the developing world.

'Mexicans are born traders,' she insists. 'They always ask me two questions: what's my marital status, and what do I want to buy.' Mexico is also protected by a trade agreement with the United States. 'The peso is linked with the US dollar. Mexico might be the third world, but the prices there are the same as in the States.' She buys most of her plastics from big factories.

Spencer also dismisses the suggestion that he's ripping off the third world. 'I'm doing them a favour,' he says. He buys cheap trinkets and kitsch playthings at retail price in their country of origin and sells them as cheap kitsch here in London. Prices in his shop range from 50p up to pounds 70 for a statue of a mechanical dancing Indian doll. Half his stock costs less than pounds 5. He is in a different league from those who pillage Indian villages for forgotten antiques and sell them on to rich West Londoners at wildly marked up prices. No matter how trendy it is, no one is ever going to fall for expensive plastic trash. There's a living in kitsch, not a gold mine.

Spencer and Bernhardt do what they do because it's fun. They genuinely like what they sell. Paul, a Peter Pan meets New Age Artful Dodger type, can be found outside his shop most days pottering and playing with a new toy. Emma, part elegant deb, part trash queen, dreams of bringing intelligent kitsch to the high street.

Both are honest, yet audacious. They make cash from 'trash'. But then bad taste is a shindig. It opposes convention. It has two fingers cocked to chintz, which is part of its charm.

Emma Bernhardt Designs call 071 207 1517. Wong Singh Jones, 235 Portobello Rd, W11 (071 221 1906) Mon-Sat (9am-6.30pm)

(Photographs omitted)