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North Korea: Witness to Transformation

Counterfeit Kicks in Pyongyang

by | November 25th, 2012 | 07:00 am

 North Korea has been known for its counterfeiting activities for decades.  Products ranging from cigarettes to liquor to $100 US bills have been known to make their way out of North Korea.  Typically, the counterfeit industry is export oriented.  Counterfeiting activities are intended to earn hard currency by smuggling items through China and other nations. Our most recent estimates place annual income from counterfeit currency around $20 million dollars with another $100 million likely coming from counterfeit cigarettes.  Given that North Korea likely runs current account deficits at around half a billion dollars a year, revenues from counterfeiting are much needed.

Less commonly discussed is the practice of producing counterfeit items for domestic consumption.  This week, North Korean media aired a report about new lines of shoes designed by a Pyongyang shoe factory.  Among them is the shoe pictured above which is stated to be intended for weightlifters.  Some might find the above shoe to be quite familiar with the iconic “tiger” stripe pattern, the reason being that this shoe design has been in existence for nearly 50 years.  Originally under the Japanese brand Onitsuka Tiger and now under the ASICS brand, the tiger stripe design has been in production since 1966 and has appeared on nearly every ASICS shoe since.  The shoes above appear to be direct knockoffs of the Mexico 66 red/white line with the platform added for weightlifting.  An ASICS spokesman was quick to point out that “ASICS has never given North Korea permission to borrow the design of the brand nor produce original equipment manufacturing (OEM) versions of it, (The North’s) products are knock-offs of the ASICS design.”

How common is this type of counterfeiting?  Given the complete lack of any legal framework in the DPRK to address copyright and trademark infringement, one would have to assume that it’s quite common.  Coca Cola has been seen by visitors in several restaurants in Pyongyang and the Coca Cola Company denies that their products are sold in North Korea.  In the case of Coke, these products are probably illegally imported through third parties rather than actually counterfeited, but it wouldn’t be a stretch to assume they might produce their own.

While subject to debate, it is hard not to note the appearance of a burgeoning middle class in Pyongyang. The size of this group is miniscule in comparison to the whole population, but there does appear to be a market for luxury items.  It’s not hard to imagine Pyongyang storefronts stocked with counterfeit Louis Vuitton bags, mp3 players, and the latest fashions.  Perhaps they’re already there.  Of course, one might suppose that some of this bling being sported in Pyongyang is coming from Chinese counterfeit. One thing is for sure, those red and white ASICS won’t go with just any outfit.  Those bright red kicks are sure to clash with the dear leader’s traditional Kim Il-Sung styled suits.