A few months before the long-awaited introduction of the compulsory tagging of all shoes in with RFID chips in Russia, the flow of counterfeit footwear is skyrocketing in the country. Natalia Demidova, director of the Russian National Shoe Union, told the Russian Retail Week conference in Moscow that their market share has risen to an estimated 60 percent from the previous range of between 35 and 40 percent. Many of them are sneakers.

New stores where customers can purchase faked products are popping up like mushrooms after a spring rain, and there is absolutely no control over the flea markets, creating a major challenge for the regular shoe trade.

Suppliers of fake shoes are getting hardly any profit margins from selling surplus merchandise that lands on the shelves of some grocery stores, where customers are deliberately supporting the scheme by purchasing a pair of shoes for just 500 rubles (€6-$8), said Demidova. These illegal suppliers pay no VAT, income taxes or import duties, and they are not subject to any control from government agencies.

On the other hand, the proposed tagging system is apparently not perfect, and some small and medium-sized companies may experience certain difficulties in complying with its terms, Demidova said.