Despite Trade War, Chinese Counterfeit Jersey Manufacturers Thrive
Throughout 2018, President Trump’s hostile rhetoric toward China about their trade policies has often included “counterfeit goods” made in China as a justification for higher tariffs. Even as these tariffs have risen to over $34 billion between the two countries, counterfeiters are doing better than ever, specifically in jersey sales for the 2018 World Cup.
China’s Counterfeit Problem
High demand and retail costs around $100 per jersey have driven many Chinese manufacturers to produce high quantities of counterfeit Nike and Adidas-branded soccer jerseys and export them worldwide. China is the world’s largest producer of counterfeits, accounting for 63% of seized goods in 2013. The country with the next most seized goods is Hong Kong, followed by other Southeast Asian states such as Thailand and Malaysia. Low labor costs and close proximity to Nike and adidas’ real production facilities have given rise to cheap yet highly realistic counterfeit goods.
Impact on Distributors
Many of the counterfeit items are sold on Alibaba’s AliExpress and Taobao websites, creating public relation damage for the Chinese giant. While Alibaba co-founder and executive Jack Ma claims to take the matter extremely seriously, going so far as to suggest jailing counterfeiters who sell on Alibaba-owned sites, in 2018 Alibaba was again categorized by the Office of United States Trade Representatives as a “Notorious Market,” a status reserved for the most notorious violators of copyright, trademark and intellectual property law worldwide.
In 2017, Alibaba claims to have closed 240,000 stores on Taobao for selling counterfeits, but the problem persists. A simple search on Taobao.com for “Ronaldo jersey” and “Neymar jersey”, referring to two of the world’s most popular athletes Cristiano Ronaldo and Neymar, yields replica jerseys available for purchase for only about $10 – only a tenth of their actual cost from adidas and Nike, respectively. These counterfeit jerseys pose a major thread to Nike and adidas jersey sales. The potential profit for these jerseys is huge – adidas sold 520,000 Ronaldo jerseys just within the first 24 hours of the announcement of his transfer to his new club, Juventus – but many soccer fans will choose the cheaper alternative that is readily available on Alibaba’s Taobao.
Impacts of counterfeit jerseys sales are felt stateside, as well, but like Alibaba, Amazon’s stated efforts to combat counterfeiting have had little effect considering the scope of the problem. After a toy company sued Amazon for allowing Chinese producers to sell blatant counterfeits of their products on the platform, a judge ruled in favor of Amazon, stating that Amazon does not “make an offer to sell” products, but rather merely directs buyers and sellers to make purchases, falling below the threshold of being responsible for the counterfeit goods sold. Because of this, Amazon has been able to avoid liability for these fake products, and counterfeit jerseys originating from China are easy to find on the platform.
Fake Jerseys Spike in Popularity
With the World Cup being held this year in Russia, counterfeit soccer jerseys have seen a boom in sales. One of the most popular jerseys, due to a colorful design, was Nigeria’s. The jersey quickly sold out upon its release on Nike’s website and people lined up to buy the scarce amount of jerseys sold in stores in Nigeria. Because of the lack of supply and high price point at $90, fake Nigeria jerseys have become hugely popular. One Guangzhou based counterfeit jersey supplier interviewed claimed his store “has shipped over 30,000 jerseys (worth up to 300 million naira ($830,000) in sales) to bootleggers in Nigeria alone, with another 20,000 shipped to sellers outside Nigeria.” Many of these suppliers ship through intermediate countries and have relationships with customs agents to ensure their goods pass through to the destination countries.
It’s not only soccer jersey sales that are affected – Chinese counterfeits of American football jerseys have become increasingly popular. For this year’s Super Bowl in Minneapolis, law enforcement officials announced “Operation Team Player”, intercepting hundreds of counterfeit merchandise in Minnesota leading up to the Super Bowl. Officials said that most of the items they found originated in China.
As relations between the US and China deteriorate and the trade war continues, counterfeit sellers project to benefit. Despite the decrease in trade overall, less resources are being put into fighting counterfeit items. The most likely effect is that counterfeit sellers will move their operations to neighboring southeast Asian countries and will still be able to reach the American consumer. The giant platforms such as Alibaba and Amazon may publicly claim to take the issue seriously, but they profit from these says and likely will continue the cosmetic enforcement rather than facing the bigger issue. Since cooperation on counterfeit goods between the US and China seems unlikely until the trade war simmers down, expect realistic fake jerseys to be continue to be available to anyone who wants to purchase them.