July 2021 | latest update: 07.09.2023 | by Lili
A daily essential item for some, a competitive necessity for others, and a golden investment opportunity for a select few. What is it? No, not bitcoin.
Yes, the thing you put on your feet when you’re running errands around town or playing a tennis match. Or rather, probably not that one, but its rich cousin designed by luxury brands and/or famous people.
Sneakers, like many other everyday objects, have a whole industry behind them.
Ever since their invention in the late 19th century, sneakers have had a solid place in people’s wardrobes. However, their overwhelming popularity began in the second half of the 20th century, and they slowly but surely made their way into everybody’s leisure wear. Nowadays they’re even accepted as a part of casual business look.
Picture of bride and groom wearing converse sneakers to their wedding
In 2022, the global sneaker industry was worth $72.7 billion and is expected to rise to $102 billion by 2025. With such high stakes, it’s no wonder that luxury brands have also entered the market. Nowadays, besides well-known sports brands like Adidas, Nike or Reebok, you can get sneakers from Gucci, Valentino and Givenchy.
As the above list shows, sneakers are incredibly versatile: you can buy a pair at the corner footwear shop for $20 or spend thousands of dollars on an exclusive pair of Yeezys designed by Kanye West.
Unfortunately, people with less honest intentions have also discovered the market for themselves.
Scalpers are people who purchase the entire stock of a coveted product online within seconds (with the help of bots), only to offer them again to consumers at a much higher price. As is the case with video game consoles, the market of sneakers is also heavily plagued by scalper attacks.
This is bad news for sneaker collectors who anxiously await the release of new high-end brand footwear, and affects people who are simply looking for random sneakers at a lesser rate.
Counterfeits, on the other hand, affect a larger segment of the market. Getting products for a fraction of the original price has always been a great motivator for people; no wonder that 14% of counterfeit products seized by US Customs are sneakers. This makes sneakers the second most counterfeited product behind apparel and accessories.
Thanks to global e-Commerce, counterfeits are today more easily accessible to consumers all over the world. Online brand protection experts have their hands full with monitoring marketplaces to catch fake products. No marketplace is immune to the sale of counterfeits, not even well known and trusted ones like Amazon or eBay.
eBay is one of the best known online marketplaces worldwide with a net revenue of aroud $4.8 billion in the US in 2022.
Although a wide range of products are available on the marketplace, sneakers stand out on eBay. Around 6 million of them are sold on the marketplace annually, and with the abolishment of reseller fees on sneakers above $100, eBay has become a favourite marketplace for sneaker sellers and collectors.
Unfortunately, smelling new opportunities, counterfeiters are flocking to the marketplace as well. Although eBay has an anti-counterfeit policy, a US government study discovered that around 40% of goods offered by third-party sellers on popular marketplaces (including eBay) are fake.
As you can see from the numbers, counterfeiting is not an isolated problem. In fact, it’s a $1.82 trillion industry affecting virtually all brands in all marketplaces all over the world. The majority of counterfeit goods originate in China, Hong Kong, the UAE, Thailand, India, Turkey, and Singapore.
Although counterfeit goods tend to be a lot cheaper than authentic brand products, they are usually made of bad quality, often hazardous components, use slave labour, hurt the environment, and provide no customer service at all. Which, in a nutshell, means that the existence of counterfeits is bad for both consumers and brands.
Image of a pile of questionable sneakers
Luckily, many marketplaces have recognized the problem and are stepping up their game to help the efforts of online brand protection experts and protect brands and consumers alike from counterfeits. eBay is one of these marketplaces.
eBay has recently opened a new authentication centre in London as a part of implementing the marketplace’s Authenticity Guarantee program in practice. According to Rob Hattrell, Head of eBay Europe, “we have seen sneakers become an asset class for many- a new way of storing your money as they grow in value over time. We want enthusiasts to know eBay’s got their back when they are looking to invest in sneakers and we’re here to help sellers build their businesses.”
At the new centre, independent industry experts provided by Sneaker Con are vetting popular sneakers (Nike, Adidas, and New Balance, both used and new) sold in the UK over £150 to determine their authenticity.
The checks are free of charge to both sellers and buyers, the costs are covered by the marketplace. eBay plans to include more brands into the program over time.
The actual process of examining the products and identifying fakes is not unlike the one online brand protection experts do on a regular basis.
First of all, Sneaker Con experts unpack the products and check the boxes as well as packing material. Often, these are not made from the same raw materials and/or have a slightly different design and colour scheme.
Image of Nike sneaker in wrapping paper
Then comes the test of the actual product. Experts check the stitching, the fabric, design elements, colours, and raw materials. They look for signs of deviations from the original brand product. Sight and touch come in handy, but the most important sense for this task is smell.
Do you know what the word “Nose” refers to? (Other than the organ in the middle of your face.) The Nose, with a capital N, is a person blessed with an extremely sophisticated sense of smell who is vital to the creation of perfumes. Well, Noses can find a side-gig in brand protection because smell is very important for determining if a product is authentic.
A counterfeit product usually is made of cheaper raw materials that smell different than the real deal. In the case of sneakers, a fake product often gives off a chemical smell, while authentic ones smell like the more expensive (and much more tolerable) rubber used to make tennis balls.
When a product is deemed to be authentic, the experts put a tag on it and send it to the buyer. If this pair of sneakers is resold in the future, the tag guarantees its authenticity and there’s no need to perform another check.
If the product turns out to be fake, it’s sent back to the seller and the buyer gets their money back.
It may be an honest mistake; after all, some sellers work with large quantities of shoes and many suppliers. However, if the same seller keeps popping up in several counterfeit cases, eBay will keep an eye on them and may even impose restrictions on their account.
Having seen the success of the authentication centre in the UK, eBay Deutschland decided to follow suit and open its own centre in Germany. Authentication is free for pairs of used or new sneakers worth more than 100 euros and produced by one of 60 brands. Any seller in Germany can ask for authentication, regardless of whether they’re selling via auction or direct buy.
Obviously, sneakers are not the only items prone to counterfeiting. Other categories of luxury goods, like handbags and watches are also high on the list of counterfeiters - and eBay authenticators. Based on the success of sneaker authentication, eBay has introduced the same service for handbags and watches in various markets, including the US, UK, Australia and Germany. The methods for authentication are similar: experts are checking material, colours, patterns and many other features of a product before deeming it authentic.
We at globaleyez are very happy when online marketplaces like eBay take brand protection as seriously as we do. Our goals are the same: reducing the number of counterfeits that harm brands, consumers, and the environment alike.
We are very interested in the outcomes of the Authenticity Guarantee program. If it becomes successful, we hope that the program will be extended to more areas, and other marketplaces will follow suit.
However, eBay authentication can’t replace online brand protection. First of all, this program only covers products already bought on the marketplace. globaleyez’s marketplace monitoring program ensures that IP infringing listings are detected and removed from marketplaces before they’re bought.
Secondly, what about grey market products? These are original products offered outside of a brand’s official distribution network. Since they are the real deal, they’ll pass the authentication check but still cause massive losses to the brand.
Actually, online brand protection experts and marketplaces need to work together (as globaleyez does with eBay and over 150 other marketplaces) to eliminate fake, grey market, and any other IP infringing products from the market. If we all do our end of the bargain, we can make the world a safer place for consumers and brands alike.