Popularity of high-priced headphones has led to a rise in fakes coming out of China
CNN goes behind the scenes of sales of counterfeit Beats by Dr. Dre in Shenzhen
Wholesalers sell knock-offs at $70 to global buyers who can resale as high as $400
Seller: "Buy cheap from me, you sell expensive in your home country, we all make a lot"
Three weeks ago, hip-hop star Andre Young – better known as Dr. Dre – made news as his Beats Electronics line, a maker of premium headphones, was valued at more than $1 billion thanks to an investment from the Carlyle Group.
But the former N.W.A. rapper is not the only one profiting from his headphone line. Across the Pearl River Delta in southern China, counterfeit Beats are flowing out of factories, assembly workshops and shops, attracting businesspeople that sell the headphones on global markets.
A CNN reporter approached wholesale companies about buying in bulk in order to learn how the underground sale of knock-off headphones works. “Business is very good,” said a woman, who, with her family, runs a wholesale company selling copied headphones in one of Shenzhen’s many mega-malls. “You buy cheap from me, you sell expensive in your home country, we all make a lot of money,” she added.
To prove her point, she shows an Excel spread sheet on her laptop listing customers from all over the world: Italy, Denmark, United States, Canada, Dubai, Russia and more. She said she recently sold a large amount of counterfeit Beats by Dr. Dre for $50,000 to a British businessman who sent them to the UK by jet – which is considerably more expensive than container ship – and sold them as originals.
While top-line Beats headphones retail for $400, the Shenzhen operators interviewed sell knock-off versions wholesale for $70. “A lot of people are making a lot of money on Beats right now,” she said.
Factory owners here ha