The Big Business of Fake Sneakers

The footwear industry has been growing in recent years. This includes genuine items, as well as counterfeits. The fake shoe market is well known for its size, yet this illegal industry is not easy to follow and eliminate.

From the manufacturers of counterfeits to their distributors and sellers, there is a system of illegal activity aimed at selling counterfeit sneakers to consumers around the world.

The Big Business of Fake Sneakers

When it comes to fake shoes, there are many questions to be asked. What is the quality of the fakes? How can I tell if my new branded sneakers are real or fake? Will fake training shoes affect my performance? Where are the fake shoes sold? Are they sold as fakes or genuine items? There are also other, broader questions. Where are the fake shoes manufactured? Is organized crime involved in the production or distribution?

The demand for fakes reflects the demand for genuine footwear. Some brands are often counterfeited. As part of the effort to fight fakes, Amazon and Italian Valentino have recently jointly filed a lawsuit against a seller for copying one of Valentino’s famous styles and selling the shoes on Amazon.

Other efforts include legislation, such as Nike Inc. and 3M support of legislation that would give U.S. customs authorities the right to seize goods believed to infringe patented design, just as they can seize goods that infringe copyright and trademarks rights.

The scale of the fake footwear problem

In an OECD report released last year, data from 2013-2016 shows that in terms of seizures of counterfeit and pirated goods, footwear was the most counterfeited product category. Looking at 2019, the U.S. Customs and Border Protection (CBP) has seized many shipments of counterfeit sneakers.

One shipment of fake shoes seized by Customs and Border Protection in October 2019 was worth an estimated $2.2 million. The shipment arrived in a container from China with 14,806 pairs of fake Nike shoes. The documents stated it was carrying “napkins.” This is a major bust, but the scale of the problem is even bigger.

In 2018, for example, one operation revealed 300,000 pairs of fake Nike sneakers that were smuggled into the U.S.

 

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Who wants fakes?

The demand for genuine brand name shoes is high. Consumers in stores and online often wish to authenticate their purchases. But there is also a sector of the market in search of fakes. Purchasing fakes has become much more widespread and accessible through online marketplaces and social media platforms. Buying a fake pair of sneakers is as easy as going online and buying something that looks just like the real deal, for a lower price. Some replicas are done so well that even experts find it hard to tell if the shoe is real or fake.

Even sneakerheads may choose to buy high-quality replicas that can pass as authentic. This is especially true when it comes to coveted designs with limited availability. Limited production of a model makes it more desirable and creates a thriving resale market. Resale of hard-to-find designs usually comes with expensive price tag, much higher than retail, pushing some sneaker lovers to purchase replicas.

 

The fake footwear system

Multinational companies from the footwear industry have been outsourcing production to factories in China for many years now. Specific industries often clustered in the same city or area. After a few years, counterfeiters started copying branded sneakers, such as Nike, Adidas, and Reebok. Fake models started selling right with the authentic ones, and sometimes even before. Security has been enhanced ever since, and these days it is less likely to have “factory extras”, “third-shift” shoes or “real fakes”.

Today, if a retailer wants to sell a popular shoe, he can find online listings of replicas to buy. Alternatively, he can place an order in a factory in China. The city of Putian, for example, is known for its fake sneaker factories. Since both the buyer and factory are not authorized to make the shoes, they need to imitate them. Due to security measures in legitimate factories, they usually need to do it with no prior product information. What they can do is buy a pair of authentic brand shoes and reverse engineer them.

This involves an experienced individual who gets the shoes, takes them apart, and draws up a design for production. If the replicas are made due to general demand, the manufacturer can upload their pictures online and sell them in bulk. When made for a specific buyer, the first batch is sent to the buyer to check and approve before going on to fulfill the order. Even consumers take part in the improvement of fakes, as they upload pictures that demonstrate small differences between the fake and real versions for the manufacturer to correct.

The Big Business of Fake Sneakers

Bringing the shoes into the United States, the European Union, and other countries requires a sophisticated network of fraud. Counterfeit shoes arrive from China in mislabeled containers. They are stored in warehouses and then shipped to stores. When caught, it may not be easy to find the people responsible for the illegal production, distribution, and sales because the documents are false.

As specific locations, Putian being one of them, are known for increased counterfeiting activity, importation documents listing the “made in” country are often fake, as well as the port of origin. As portrayed in a federal complaint reported by Quartz, the listed phone numbers belong to “burner” phones while the email accounts were created using false identities. After they entered the U.S., the containers were not sent to the businesses listed on the manifest but to other facilities.

Sophisticated importers sometimes ship shoes that look almost exactly like the authentic brand, with no trademark. After the shoes are in the U.S., they can sell them as “off-brand” items or attach the trademarked logo to the shoes before offering them for sale. For smaller operations, counterfeiters send the replicas in small parcels that do not alert customs officials.

The counterfeit problem

When shopping for fake sneakers intentionally, people compare the similarity of the fake to the real design. Often people forget that the shoe may have the same look but not the same feel. Fake shoes are not always as comfortable, even when they look like the real deal.

Counterfeits can damage the reputation of brands, decrease their profits, and hurt their business. To curb the counterfeit problem, some brands try to teach consumers how to spot fakes and even report them to the brand (see more: Counterfeits Education for Consumers).  Other brands choose not to raise consumer awareness of the issue.

Wiser Market Online Brand Protection

Choose Wiser

Anti-counterfeit agencies, like Wiser Market, work to eliminate the online sale of counterfeits for their clients. There are different ways to curb the counterfeit problem, and we can help you with strategy and custom-tailored solutions.

Our anti counterfeit solutions include advanced monitoring technology, team expertise, and proactive enforcement to help you fight against IP infringements with quick, effective results. We apply various takedown measures to achieve online IP protection.

With Wiser Market, your brand will have an automatic and comprehensive intellectual property protection.

 

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FAQ

What is the difference between a knock-off and counterfeit?

A knock-off shoe is designed to look like the original one, but without the logo or trademarks, therefore not misleading buyers.

Counterfeit shoes are imitations of the original products designed to mislead buyers into believing they purchase the authentic brand.

 

Are replica shoes fake?

Replicas are fakes. When used for shoes, ‘replicas’ refer to high quality and difficult to spot counterfeits.

 

Is it easy to spot counterfeit sneakers?

With high-end replicas, it’s difficult to spot the difference between the fake and genuine items.

 

How can I tell if my new Nike are fake?

It can be extremely difficult to spot fakes. Nike suggests that you buy either from Nike itself or from a trusted retailer: https://www.nike.com/help/a/nike-product-authenticity.

 

Is selling counterfeits legal?

In the U.S., the EU and in many other countries, knowingly trafficking and selling counterfeits is illegal.

 

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