Counterfeiting

Counterfeit Sneakers Are Serious Business

October 11, 2019

The LocatorX Team

October 11, 2019

Name-brand sneakers are one of the hottest commodities in the world. Part collector’s item, part fashion statement, designer or “luxury” sneakers have grown into a phenomenon, with people waiting in line overnight to get a hand on the latest Jordans, Yeezys, or any number of other buzzworthy brands. 


After a $55 billion valuation in 2016, the sneaker industry is projected to double in value by 2025, reaching nearly $100 billion. This is underlined by a piping hot resale market, where people of all ages are selling limited-production shoes for top dollar. StockX, one of the largest e-commerce websites for luxury sneakers, estimates the resale market was worth $6 billion earlier this year. 


With the hype surrounding the trend — and the chaos of online resale — the door has been opened wide for counterfeiters. As of last year, sneakers are the second-most counterfeited product, based on findings from U.S. Customs and Border Protection (CBP). Approximately 14% of counterfeit products seized in 2018 were imposter footwear. This is not far behind the leading counterfeit product, wearing apparel/accessories, which made up 18% of seized counterfeit goods. 


In other words, the sneaker market has gotten a whole lot sneakier. 


Counterfeiting is an out-of-control problem, causing trillions in damages and, in some cases, endangering the customers who purchase the goods. The problem grows more complex as technology and the internet become more pervasive and precarious, especially with Generation Z, who are the target audience for sneakers co-designed by famous athletes and musicians. 


Business Insider reports that Instagram is a hotbed for fake fashion goods. In 2019, counterfeiter accounts on the platform published 64 million posts, up from 14.5 million posts in 2016. The number of active counterfeit accounts has risen 171% in the same period.

This news goes hand-in-hand with the social network’s ongoing venture into e-commerce. The company recently rolled out a checkout button, allowing users to buy products from their feed without leaving the app. This is a dream come true for those sellers showing off convincingly made ripoffs of popular sneakers. Counterfeiters can also advertise their fake goods in short, temporary clips on Instagram Stories, which helps to eliminate the paper trail of static posts. 


In an interview with Business Insider, an Instagram spokesperson addressed the problematic rise of counterfeit goods being promoted or sold on the platform. 


“We want our community to have great experiences with businesses on Instagram and we take IP rights, including issues around counterfeiting, very seriously,” the spokesperson said. “We have strong incentive to aggressively remove counterfeit content and block the individuals responsible from our platform. We have devoted more resources to our global notice-and-takedown program to increase the speed with which we take action on reports from rights owners.”


“We now regularly respond to reports of counterfeit content within one day, and often within a matter of hours. Additionally, we continue to proactively fight against bad content, including content that may offer counterfeit goods, with sophisticated spam detection and blocking systems.”


Instagram is just one of the many ways that criminals have capitalized on the internet to sell fake goods. The increasing number of e-commerce options — and the blind trust of many online shoppers — has helped the counterfeiting plague become not only larger with each passing day, but also harder to stop. Popular sites like Amazon, eBay, Craigslist, and countless others are rife with suspicious sellers taking advantage of everyday shoppers. 


A recent study by Better Business Bureau found that one-in-four online shoppers have received counterfeit goods at some point. In another study, 20% of respondents who bought athletic footwear online in the past 6 months say they bought fake shoes. Among those surveyed, most began their search looking for a genuine product or a similar style at a lower price point.


When it comes to footwear — and specifically, designer sneakers — counterfeit sales are happening in broad daylight just as they are online. The shoe trend has spawned conventions such as Sneaker Con, where collectors and resellers can set up booths and meet hundreds of interested buyers (or “Sneaker Heads”) in a day. Crafty counterfeiters can take their chances here; although the convention organizers are cracking down, there’s no telling how many fake shoes have exchanged hands at these events since the convention launched in 2009. 


In late 2018, a counterfeit factory in China was raided by local authorities, who seized and destroyed 500,000 pairs of fake sneakers — namely, Converse and Vans. The haul was worth an estimated $87 million. Back in the States around the same time, CBP intercepted a shipment of 9,000-plus counterfeit Nike shoes en route from New York to California.


These big-time hauls may only be scratching the surface of the problem, and are indicative of a counterfeit sneaker market that is overwhelming in scope. Although ripoff kicks are not as dire a threat as, say, counterfeit alcohol or medicine, it is clearly a worrisome scene. Retailers are losing tens of millions in rightful sales, while the shoe-crazed public is being conned of their hard-earned cash. 


In honor of National Sneaker Day (October 9th), we’d like to help raise awareness to the issue. If you are considering a foray into fancy footwear, take precaution and research the credentials of the seller, as well as the factory specifications of the shoe you are considering. Visit STOPfakes.gov for details on identifying potential counterfeiters and reporting them to the authorities. 


Though counterfeit sneaker sellers are running rampant, we can work together to get the shoe on the other foot once again. 


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