How Bold Moves Break Counterfeiters’ Entrepreneurial Spirit

Counterfeiting has evolved. While organized crime rings remain active, many counterfeiters now view themselves not as criminals but as savvy small business owners. This shift—from illicit actors to entrepreneurs—complicates enforcement and normalizes intellectual property theft. So, how do counterfeiters really think? And what can brands do beyond the usual takedown notices?

This article dives deep into the counterfeiter mindset and reveals real, proven strategies brands use today to disrupt counterfeit supply chains, educate consumers, and dismantle illegal networks.

1. Counterfeiters Think Like Entrepreneurs, Not Criminals

Research led by Professor Qingqing Chen of Rutgers University found that many counterfeiters—particularly in China—see themselves as legitimate business operators. They conduct market research, adjust product pricing, and tweak designs based on consumer feedback. Morality and legality often take a backseat to profit and market demand.

“If there’s demand, why not fill it?” is a common attitude, reflecting an entrepreneurial mindset rather than criminal intent.

For example, a counterfeit manufacturer interviewed in the study described operations akin to a startup’s direct-to-consumer approach, constantly iterating products based on buyer preferences.

2. Disrupting Supply Chains Is Key—Not Just Online Listings

Taking down online counterfeit listings helps but doesn’t stop the problem at the root. Real impact comes from targeting factories, warehouses, and logistics hubs that manufacture and distribute fake goods.

Here are examples of major enforcement actions:

Vietnam, May 2025: Authorities raided Saigon Square Shopping Mall, a notorious hub for counterfeit luxury goods like Rolex, Gucci, and Louis Vuitton. Thousands of fake items were seized, disrupting a key supply node.
U.S. Customs & Border Protection (CBP): In a single El Paso shipment, CBP seized over $9.2 million worth of counterfeit luxury jewelry concealed under false shipping manifests.

By focusing on the physical supply chain, brands can dismantle the infrastructure that enables mass counterfeiting.

3. Target Financial Vulnerabilities: Tax Evasion and Audits

Many counterfeiters don’t declare income or pay taxes, creating a legal vulnerability that brands and enforcement agencies can—and should—exploit. While trademark enforcement can be slow or ineffective in certain jurisdictions, financial crimes like tax evasion offer a more universal and often more enforceable entry point.

Take the UK, where investigative reports have uncovered how tens of thousands of fraudulent Chinese “burner” companies are evading VAT and import taxes by abusing loopholes in corporate registration. In one case, a single China-based director set up 87 companies, each registered at different UK residential addresses, to sell on platforms like Amazon, eBay and Temu. These businesses often vanish when HMRC attempts to collect tax, revealing a pattern of abuse ripe for criminal investigation.

Though enforcement has lagged—prompting public criticism of HMRC (HM Revenue & Customs)—this situation also shows how financial investigation can reveal large-scale counterfeiting operations hiding behind paper-thin legal facades. When tax laws are enforced rigorously and paired with financial audits, they can become powerful tools to shut down operations that may otherwise be difficult to prosecute on IP grounds alone.

4. Experience Matters: Educate Consumers with Authenticity Labs

Just like the warnings on cigarette packs, generic anti-counterfeit messages rarely change behavior—especially among buyers who think fakes are ‘good enough.’ Instead of flashy digital campaigns, brands can focus on tactile, noticeable, and exceptional experiences that let consumers feel the real difference for themselves.

For example, luxury brand LVMH launched a traveling exhibition called “Louis Vuitton X” that included hands-on displays of craftsmanship, inviting visitors to explore the materials, construction, and history behind their products. Attendees could compare stitching, hardware, and leather finishes—helping them appreciate why the real product is built to last and worth protecting. While not explicitly branded as anti-counterfeit, these immersive experiences train consumers to appreciate the true craftsmanship and desire for unmistakable premium quality in authentic products.

Take Lesportsac as another example. Loyal customers often note how the zippers of its bags glide effortlessly, never snag, and virtually never break—even after years of daily use. It’s a small feature, but one that signals authenticity through durability and thoughtful design. Counterfeit versions, by contrast, often rely on flimsy hardware that jams or detaches with minimal wear. These seemingly minor details—smooth zippers, reinforced stitching, weight balance—add up to a user experience that counterfeiters can’t replicate.

Brands that invite consumers to touch, test, and compare these materials firsthand—whether through in-store demo tables, pop-up authenticity labs, or traveling exhibitions—can strengthen emotional connection to genuine goods and deepen resistance to fakes.

5. Publicly Call Out Look-Alikes with PR and Legal Action

“Dupes” or look-alike products that mimic a brand’s trade dress don’t just undercut sales—they chip away at brand equity and mislead consumers about what quality should feel like. While takedown notices remain a first line of defense, some brands are going further: using public stunts and legal pressure to reframe dupes as deceptive and damaging rather than clever bargains.

Here are two recent examples of how brands are fighting back—not in the courtroom alone, but in the court of public opinion:

Lululemon’s Dupe Swap: At a Los Angeles pop-up, Lululemon offered customers a free pair of genuine Align leggings in exchange for their knockoff versions. The event, widely covered by lifestyle and fashion media, was designed to spotlight the real difference in quality—stitching, fabric feel, performance—and subtly shame counterfeit purchases.

(Image Credit: Lululemon)

Olaplex’s “Oladupé” TikTok Campaign: Rather than go silent, Olaplex embraced virality by coining “Oladupé,” a cheeky but targeted awareness campaign highlighting how counterfeit hair treatments can cause serious damage. The campaign educated consumers on how to spot fakes and why it matters—positioning the brand as protective, not just premium.

These efforts show that brands don’t have to passively endure dupe culture—they can flip the narrative, making authenticity aspirational again and reinforcing product value through smart, socially native campaigns.

6. Collaborate with Private Intelligence Practices

An international fashion brand—not identified publicly—engaged a private investigation firm to investigate counterfeiting across multiple countries, including Romania, Hungary, Ukraine, Saudi Arabia, and Egypt. The firm performed:

Digital intelligence gathering, scanning social media, online marketplaces, and even dark web forums to identify counterfeit sellers and products.
Creation of a detailed database of suspect profiles, distinguishing real resale from counterfeit offers.
Use of undercover “avatars” to conduct test purchases online, confirming the presence of counterfeit goods.
On-the-ground field operations, where investigators conducted in-person buys from key sellers.

The resulting intel enabled the brand to build a legal case and share actionable data with authorities—allowing coordinated enforcement across regions.

7. Use Authentication and AI-Powered Investigation Tech

Authentication technologies—like QR codes, RFID tags, and blockchain—are empowering consumers to verify the authenticity of products instantly. But combating counterfeits takes more than item-level protection. On the enforcement side, AI-driven investigation platforms are transforming how brands detect and dismantle entire counterfeit networks.

Marketplaces like StockX combine AI with expert human review to authenticate resale items—sometimes in direct partnership with the original brands. These efforts build consumer trust and keep counterfeits out of the secondary market.

(Image Credit: Vogue Bussiness)

Meanwhile, tech platforms like Hubstream go deeper. Trusted by global brands, Hubstream uses AI-powered link analysis to automatically surface connections across sellers, payment accounts, shipping data, and online listings. Instead of chasing isolated listings, brands can use this intelligence to prioritize high-value leads and uncover the full structure behind counterfeiting operations—making enforcement smarter, faster, and more strategic.

Attack the Entire Ecosystem, Not Just the Symptoms

Counterfeiters’ evolving mindset—from criminal gangs to entrepreneurial small businesses—demands a new kind of brand protection strategy. Brands must:

Disrupt supply chains with coordinated raids and customs seizures
Target counterfeiters’ financial weaknesses like tax evasion
Educate consumers through tangible, immersive authenticity experiences
Launch public legal and PR campaigns exposing dupes
Collaborate with private intelligence and law enforcement globally
Leverage cutting-edge authentication and AI investigation tools

Only a holistic, data-driven strategy can outpace counterfeiters—who thrive on high demand, low risk, and fragmented enforcement. When brands unite technology, education, and smart investigations, they do more than protect revenue—they reshape the economics of counterfeiting itself.

Ready to disrupt the counterfeit economy?
Let’s talk. Contact us for a demo and see how Hubstream helps your team connect the dots, act faster, and shut down entire illicit networks—not just individual listings.