The trend: The luxury industry has a counterfeit problem.

• The number of tests run using Entrupy’s authentication software spiked by 40% to 50% in 2024, the company said in its annual “State of the Fake” report.
• Suspected counterfeits account for more than half of the goods rejected by Vestiaire Collective—up from one-third in 2021.

How we got here: The rise of counterfeiting has several root causes.

• They’re considerably more affordable. Persistent price hikes have pushed luxury goods out of reach for most shoppers, while reports of diminishing quality have aggravated even those who can afford a $10,000 Chanel handbag.
• Counterfeit quality has improved considerably. Some “superfakes” are so good that even trained sales associates fail to spot them, Fashionphile founder Sarah Davis told The Wall Street Journal.
• Counterfeiters have gone D2C. The rise of ecommerce—and social commerce in particular—has made it easier than ever for makers of fake Birkins and Louis Vuitton Neverfulls to sell to shoppers directly, allowing them to reach larger audiences and bypass customs checks.
• Authenticity is no longer a requirement for shoppers. Today’s consumers are perfectly happy to buy a lower-cost “dupe”—and embrace them openly, as the fervor around Walmart’s “Firkin” shows.

Our take: Counterfeits pose a serious challenge for brands and the growing number of secondhand platforms that specialize in luxury resale. The more convincing these superfakes get, the harder it will be for companies like LVMH to justify their high price points—and harder still for platforms like Vestiaire and The RealReal to keep fake goods off their marketplaces.

To fight back, luxury brands will need to double down on craftsmanship and distinctive design—not to mention safeguard technical details that prevent counterfeiters from being able to produce near-flawless replicas.

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