Outsourcing that Leads to Counterfeit Shoe Production

Published: 14th October 2009
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Counterfeit shoes are sweeping the market, and controlling the sale and production of these fakes is becoming more complicated than ever. This is partly because it is becoming more and more difficult for a consumer to tell a fake from an authentic shoe. And with good reason!



More and more major shoe companies are shifting their bases of operation overseas. Even European giants like Armani and Prada are making their shoes in China on the sly and then finishing the shoes in Europe to hold on to that coveted "Made in Italy", or wherever, label. But by selling the production of their footwear to a factory in China or Indonesia, these companies are also giving up some control over the design-knowledge that makes an Armani or Prada or even Nike shoe special in the first place. The result is what is sometimes referred to as the "third shift", the "ghost shift" or the "midnight shift". Factories that are licensed by Nike to produce Nike sneakers make shoes for the American company during the day; then at night, these same factories produce an extra few thousand pairs of shoes that will be sold to the black-market as counterfeits. These "third shift" shoes may be made out of cheaper materials, but they are made by the same people. As a result, the counterfeits are extremely difficult to distinguish from an authorized version of the shoe.



The athletic shoe company New Balance dealt with a crisis surrounding this issue in 1999. New Balance decided to terminate its relationship with one of its contractors, Horace Chang. Chang, who ran a New Balance factory outside of Hong Kong, had been given permission to make New Balance sneakers for both an international and Chinese (i.e., domestic) market. Chang began making unauthorized extra versions of the New Balance "classic" (a low-tech sneaker), which ultimately led New Balance to terminate their contract with Chang. Chang was ordered to turn over everything that could amount to intellectual property - molds, marketing, design-information, labels, etc. Chang refused. On a raid of Chang's factory, New Balance discovered that Chang had over 100,000 extra and un-authorized New Balance "classic" shoes and that Chang had begun to manufacture his own version of the "classic" under his own label name. The case ended up in international courts.



This kind of problem is one of the risks that major shoe companies take by manufacturing their products overseas. However, most companies are making enough of a profit by making their shoes in China as opposed to Europe or the United States that it is worth the risk.



Jane Barron works for OddShoeFinder.com,a free online website that helps people find mismatched footwear.Get more information on deformed feet, corrective shoes or foot length difference.

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