DANIEL ZAND WRITES– High priced athletic shoes have driven “sneakerheads”  — shoe enthusiasts who collect and trade the products, particularly in basketball and skateboarding—to fake (as in knock-off) sneakers.  The demand for them is booming, as the makers of brands like Nike and Adidas are well aware. Chan, a seller of fake sneakers in China, claimed “I have heard a factory boss brag that he has a team of workers… on his payroll to leak information or parts whenever they can.” What this means is, sellers in Hong Kong are doing whatever they can to replicate the shoes. 

     In previous years, Nike and Adidas have filed trademark cases in US courts so as to stop this practice and have also maintained a system for reporting fakes online. Yet sneaker experts as well as collectors claim there is little incentive for Nike and Adidas to crack down, because the fakes resell in a matter of minutes and now the prices have increased.

     And there’s another problem. As new limited-edition shoe lines are released, Nike and Adidas are starting to face competitors within their secondary markets. These are resellers — people who purchase the shoes but don’t keep them and instead turn to consignment, through which the newly purchased shoes are sold to other businesses.  Led by Stock X and Goat, such second-hand companies have thus far raised $37.6 million in venture capital. Hong Kong has created just such a secondary market in fake sneakers sold at much cheaper prices. Called “duplicates,” they are made so well that you cannot tell they are fake, unless you happen to be a corporate sneaker executive. 

     The problem, in the end, is the logistics of producing limited-edition shoes, whether Nike Air Jordan’s, Off Whites or Adidas’ Yeezys.  When fewer are produced, demand goes up, as do prices, including in the secondary market. 

     What’s the solution? To stop limiting the limited editions? To lower the prices of genuine Nike and Adidas shoes? It’s hard to know— and harder, still, to put ourselves in the [business] shoes of those who need to figure it out, and fast. 


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