Economics 101 claims that the law of supply and demand dictate market relations. According to this logic, the price becomes the equilibrium point; it functions to equalize the quantity demanded by consumers and the quantity supplied by producer. It suggests a harmonious agreement between producer and consumer, a delicate balance, indexing both the willingness and desire of the consumer for the product and how much the producer will produce to continuously make a profit.
But the shoe industry or rather the Nike Empire doesn’t follow this simple abstraction of capitalism. In the world of limited and special editions colorways and collaborations, the demand for shoes means the prices reach astronomical heights, sometimes 5 to 20 times its original price -- on the box at least. The purposely driven up price defies the logics of the capitalist contract of exchange (see BAPE for more), which make the equilibrium point a mythology to how capitalism truly works.
At any rate, as many on here already know of and may have already participated in, there is a subcultural shoe industry to the subcultural shoe industry. And what I mean is, the lovechild of major corporations and subcultural capital in the form of the illicit world of Fakes and knockoffs. In the recent issue of Complex: The Ultimate Buyer’s Guide for Men, there is an article titled "Fakin’ the Funk," which Adam Matthews uncovers the multimillion dollar industry of knock-off shoes (namely Nike), how tourist drive the demand for fake Nikes and the illicit economies/factories in China (see Ebay stores and other online sites that sell "copies" or "variations"), and the question over intellectual property.
Though I won’t use this space to recount the details of the interesting article ($4.99 at your local Border’s bookstore), what I did find a little surprising was when Matthews notes Nike’s statement in regards to the stakes of the knock-off/counterfeiting industry in China:
Does Nike really care if these ugly things are circulating? You think Nike has to worry about people thinking these are real?
Nike doesn’t disclose the amount of losses it suffers from counterfeiting because it probably doesn’t lose anything! The whole industry of counterfeit, for Nike shoes at least, is based on the lack of accessibility, which is less an issue of price than an issue of actual availability. Nike can’t lose money it isn’t making if the shoes don’t exist in circulation, am I right?
For the most part, kids and shoe fanatics aren’t opting to by fakes like people buy fake watches, Prada, Gucci, and Louie Vuitton gear where it’s a matter of price and where the pattern or symbol is enough to perform a certain status level beyond one’s means. If you check ebay, most everyone selling knock off shoes offers the guarantee that their shoes are a hundred percent authentic and sometimes the additional tag: one hundred percent variations, which seems to be an indication that consumers are searching for the real deal, not that they’re deliberately searching for fakes.
Further, what does Nike have to lose with trademark infringement in the case of the knock off shoes? Nike probably doesn’t have numbers to provide because, it’s my guess, that bootlegging is practically another form of advertisement or that bootlegging probably HELPS their brand. The whole desire for fakes is based around the demand and desire for Nikes, Nikes that no longer exist and cannot be purchased.
The question of intellectual property, I feel, doesn’t apply in this case because it assumes that people are ripping Nike off. It’s not as if you see people making fakes of generic 40 dollar Nikes sold at JC Pennys, Sears, or Mervyns, which is what you see in the case of Louie Vuitton et al. where everything and anything has their patented, trademark pattern on it. My guess, and you don’t have to agree with me, is that the intellectual property card is based on the idea that someone is profiting off someone else’s idea and isn’t paying dues. But in the case of Nike shoes, the circulation of fake Jordans, fake Dunks, or fake Air Max 95s in rare colorways is really consumers enacting and performing their brand loyalty, who wait patiently to purchase the authentic shoes, scouring the internet for that right size and that right price.
To dispel rumors that the Chinese are just a bunch of people who can’t follow industry rules, Matthews mentions that "no one in Hong Kong would wear fakes." This isn’t to say people in other parts of China don’t wear them, but rather to emphasize bootlegging is largely a product of "the west" demands for fakes. So, is the global bootlegging industry to blame for the circulation of fake shoes? What is really being "compromised" in the bootlegging shoe industry? Are Nikes really devalued as a result or is their brand even more inflated than it already is? In this case, isn’t "imitation" really "the sincerest form of flattery"?