When Chinese law enforcement agencies have recently arrested dozens of suspected counterfeiters faking handbags of the luxury brand Louis Vuitton in Shanghai, the officials uncovered a sophisticated counterfeiting operation: The criminal group, which produced high-quality fake luxury products, obtained advance access to unreleased designs via at least one employee of the fashion label. The involved Louis Vuitton employee is said to have sold the counterfeiters new bags even before they were released, enabling the criminal organization to produce illicit imitations of the new releases early on.
The raid by the authorities illustrates the scale of the illegal operation: So, the officers confiscated fabrics alone with an original value of 15 million dollars; next to that, they also seized 2,000 counterfeit handbags and high-quality production equipment, according to Chinese media reports. In total, more than 60 criminal gangs were arrested who were involved in the operation.
The counterfeiters produced very high-quality fakes and equipped them with features designed to make them look genuine – such as NFC tags (Near Field Communication), which are often used in brand protection. Such tags can store information that can e.g. be accessed via smartphones, helping to distinguish fakes from original products. The NFC tags that the counterfeiters applied to their fake products led to the original manufacturer’s website; presumably to create an impression of original products and to increase the price of the counterfeits. Notably, Louis Vuitton itself does not use NFC tags on its products. Instead, original goods are tagged with codes that indicate the time and place of production.
„Louis Vuitton is more determined than ever to preserve creativity in protecting its brand in the interest of its clients, its employees, and those who suffer at the hands of the counterfeiting industry“, the French original manufacturer commented to the trade publication WWD. Other counterfeiting operations involving employees of well-known fashion labels have already been uncovered in the past. For example, a million-dollar counterfeiting ring in France operated right under the nose of brand owner Hermès.