Louis Vuitton Uncovers ‘High-Tech’ Counterfeits in China, Fires Mole in Its Guangzhou Store

While making a record-breaking amount of money in China, Louis Vuitton recently uncovered a counterfeit case involving a mole and some “high-tech” fake bags.

Shanghai police in August arrested 62 criminal gangs for manufacturing and selling counterfeit Vuitton bags, seizing more than 30 sets of counterfeiting equipment, 2,000 counterfeit bags and 100,000-plus pieces of various raw materials worth more than 100 million renminbi, or $14.6 million, according to the state news outlet CCTV.

It appeared that a sales representative at the Louis Vuitton Guangzhou store, with the surname Shi, played a key role in the case.

She has been knowingly selling yet-to-be-released bags to counterfeit makers at a higher price so that the criminal gangs can sell the fake bags at the same time that the real bags are released, or even earlier, while she makes a profit from it.

But the fake bags are no usual counterfeits. They come with NFC sensor chips, a feature even the real ones don’t have yet. After scanning the chip with a smartphone, a consumer will be redirected to Vuitton’s official web site.

Some luxury brands, such as Salvatore Ferragamo and Moncler, have been using the same technology as proof of authenticity in their products.

Louis Vuitton has also been investing heavily in this field. Last May, the brand introduced the Aura platform in partnership with Microsoft and New York-based blockchain software technology company ConsenSys to help consumers trace the provenance and authenticity of luxury goods.

U.S.-based product authentication solution Entrupy was among the 26 companies chosen in LVMH Moët Hennessy Louis Vuitton’s third edition of La Maison des Startups last November to help prevent counterfeits from entering the supply chain.

“Louis Vuitton has a zero-tolerance policy in regards to counterfeiting and this remains one of Louis Vuitton’s main commitments to its clients,” the brand told WWD.

“Counterfeiting is the violation of the craftsmen’s talent, skills and the creativity of the artists to whom Louis Vuitton owes its success. 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,” it added.

The sales representative has been fired from her post, but Vuitton declined to comment further on the case.

In June, Hermès also uncovered a counterfeiting ring, including seven former employees, who manufactured and sold fake bags to unwitting Asian customers between 2013 and 2014, netting more than 4 million euros.

This story was reported by WWD and originally appeared on WWD.com.

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