This is a very touchy subject to write about as many don’t like the negativity attached to it. I have posted a few photos of this practice with famous brands (Nike, Fila, Diesel, LVMH, Prada, Gucci, and many more companies) but the repercussions of posting too many photos could go beyond repair.

I am writing this post about suppliers (factories) that in the Western world we would label as “dishonest practices”.  This would include but not be limited too:

– outsourcing production to other factories without prior consent and approval

– copying clients designs (exact design, fit, shape) to sell to other customers in other markets, possibly under different labels

– manufacturing products for the Black market, not authorized by the original brand label

I have seen all three of the above to different extremes. As I only have two eyes I am sure there is thousands of more going on then one set of eyes can see.

Nike - Outsourcing or Black Market?

Nike – Outsourcing or Black Market?

Nike - Outsourcing or Black market?

Nike – Outsourcing or Black market?

I also have seen huge large scale production facilities producing products that say they are being made for the client. But as I am not the client I am unable to verify what they are saying.

Tory Burch - 3rd world Manufacturing

Tory Burch – 3rd world Manufacturing

At the above factory, I have been instructed to take no photos during my factory visit to protect the clients designs, products or makers manufacturing techniques.  From my research online, I noticed that the same product is made in the country where I saw the mass production.

Tory Burch - Shopbop

Tory Burch – Shopbop

Below are some products I have seen in the Black market in China over the last few years.  The quality of these products varies based on the selling price with the top end bag being up to 30% of the full retail cost of the actual bag.   The seller will tell you it is the actually product but that is rarely true 99.99% of the time.

Shopping - Black Market in China

Shopping – Black Market in China

The Black market is not only for wearables but items that we consume.  The World Health Organization has found that in Southeast Asia, homebrew or other illegally procured beverages account for 69 percent of overall alcohol consumption.  TimeOut Shanghai that his best guess is that up to 80 percent of the city’s alcohol isn’t genuine — either not meant for consumption or an inferior substitute marketed as a higher-priced brand.

Then there is a Black Market for meat, the “beef” was actually made from pork (which is considerably cheaper than beef) that had been treated with chemicals including paraffin wax and industrial salts to make it look like it came from a cow.  Other reports of using illegal chemicals to transform rat, mink and fox meat into counterfeit mutton slices.  U.K. Food Standards Agency has estimated that 10% of the food we buy off the shelf may be adulterated.

The cigarette industry is a booming industry, Chinese counterfeit cigarette factories now churn out an unprecedented 400 billion cigarettes a year.  One 40-foot container of cigarettes (containing 10 million sticks) can be produced in China for just $100,000, the street value of such a container smuggled into the United States is up to $2 million.

I label this as “dishonest practices” in the western world as in the 3rd world this can be deemed to be culturally acceptable. A normal practice of a new developing country. To seek out all opportunities for short term gains as they don’t know about the long term opportunities or threats.

How do you police and control this activity?  Should this be controlled or should anyone who sees this kind of conduct simply look the other way?  Avoiding conflict, confrontation, and the making of enemies.  Possibly risking their lives, career and reputation to report such issues.

What is the value to the brand who finds or has the above offences reported?  To what degree do they care? Do they care?  Does this depend on the size of the offense? Is the supplier who is offending a part of a group or is it independent to one maker?

For the Black Market, logic tells me that someone has to be fuelling the fire and purchasing from makers and reselling to buyers.

I thought about creating a syndicate (website) where people anonymously post proof of the above offences or additional dishonest practices. The information then can be given to the appropriate brand to verify the maker, products, product market, etc. The person reporting would receive an award (money) determined by the size and value of the offense.

As a foreigner I have a trained eye and sense to notice my surroundings. I pay attention to business practices and codes of conduct.  This helps me establish my trust levels and internal relationship with that supplier.

But allot of the local staff are only visiting the factory to do their job. The task on hand. Which is to verify compliance, standards or quality assurance/control of a factory for their specific employer or client. So they are not examining or looking at suppliers in this way.

Secondary some of these suppliers maybe their friends and how many people want to report on their friends misdoings. It is easier to turn a blind eye and pretend like you didn’t see anything.

It would be great to hear everyone thoughts, ideas and opinions for the above and possible beyond.

As well if you are a major corporation would you donate to support such a syndicate or to help improve best practices?  Educate, train, implement and enforce the above.

Or is it better we all keep our “eyes wide shut”?