Counterfeiting of luxury goods is very common. Louis Vuitton wallets sell for as little $4. Prada, Louis Vuittin, Burberry, Hermes, Ralph Lauren, Givenchy and Chanel are particularly popular with counterfeiters and shoppers. High quality Gucci and Prada bags come complete with forged certificates.

Counterfeiting is a problem both in China and outside of it. Three fourths of all the luxury goods seized at ports in France and Italy originate in China. Suppliers who sell these goods often ship the labels separately from the goods and are sewn on after the goods clear customs. The producers also often produce the goods and labels in separate locations to avoid detection.

The quality of counterfeits is improving. Some times even pros are fooled and counterfeits have made their way into legitimate distribution channels and end up in stores where people think they are buying the real things. One study by Itallian authorities in the early 2000s found that fake Rolex watches were so well made—including the internal identifying marks like those stamped inside real Rolexes—that even people at Rolex had difficulty distinguishing them as fakes. Sometimes as much as $2,500 would go into making a counterfeit Rolex that sold for $12,000 or more in a jewelry shop.

The same study found that parts for luxury goods were made in southern China flown to Europe and then tucked into the floor of vehicles and assembled and distributed under the guidance of Camorra (the Naples mafia) with final touched put on by Venice craftsmen.

Most buyers know that what they are buying is not real thing. A media executive in Shanghai who earns $80,000 a year told the Washington Post: “I realized the quality of counterfeit stuff is not bad at all, and the price is one-tenth of the real products. I have never felt embarrassed to carry a fake. I have good taste, and I know what is quality and what is isn’t....It is not as if I buy the bag just because of the brand. It has to be a style I like.”