AI Supercharging U.S. E-Commerce Counterfeit Crisis
The counterfeit goods crisis continues to escalate in the United States, posing serious threats to the economy, consumer safety, and brand integrity across every facet of the luxury sector. In 2025, the economic toll from counterfeit products, pirated software, and trade secret theft is estimated to range between $225 billion and $600 billion annually. Globally, the counterfeit market is projected to reach $1.79 trillion by 2030, potentially accounting for 5% of worldwide trade. U.S. Customs and Border Protection seized over $525 million in counterfeit goods in February 2025 alone, underscoring the growing sophistication of these illegal operations. The rise of counterfeit luxury goods in the U.S. continues to raise red flags for both consumers and law enforcement agencies. According to U.S. Customs and Border Protection (CBP), luxury fakes—ranging from handbags and wallets to high-end watches and jewelry—now make up the lion’s share of the retail value in intellectual property seizures. While these luxury knockoffs represent just 30% of overall seizures by volume, they account for more than half of the estimated market value, highlighting the premium counterfeiters place on high-ticket items. In recent years, CBP has intercepted shipments totaling hundreds of millions in fake designer goods, with $435 million in counterfeit jewelry and watches and $283 million in imitation leather goods seized in 2020 alone. The vast majority of these counterfeits are traced back to China and Hong Kong, which together remain the top sources of origin for fake luxury products entering the U.S. As the black market continues to adapt and thrive online, the pressure is mounting for more aggressive enforcement and greater public awareness.Shockingly, 71.6% of American shoppers who bought counterfeits believed they were purchasing authentic items—highlighting how advanced and deceptive counterfeit storefronts have become. The luxury industry is particularly vulnerable, with the counterfeit sneaker market booming thanks to high-quality fakes that closely mimic genuine products. Technology is further enabling these networks, as nearly 25% of counterfeit transactions are now conducted through alternative payment methods. These trends emphasize the urgent need for stronger enforcement, consumer education, and brand protection strategies in the face of an increasingly complex and tech-savvy counterfeit economy.An explosive new report, "The Counterfeit Buyer Teardown," paints a concerning picture of a rapidly evolving and increasingly sophisticated counterfeit goods market, driven by a new factor: Artificial Intelligence. Forget the back alleys; findings from the research—conducted by market research firm OnePoll and AI company Red Points in February 2025—highlight that the future of fakes is digital, AI-assisted, and alarmingly mainstream.
The convergence of technology, social media, and shifting consumer mindsets is reshaping e-commerce—and not always for the better. As AI accelerates both the spread and appeal of counterfeit goods, the challenge is no longer just spotting fakes—it's confronting a counterfeit economy that's growing smarter, faster, and harder to contain.
“As counterfeiters adopt advanced tools like AI, the fight against fakes is becoming more complex and more urgent,” said Laura Urquizu, CEO & President of Red Points. “We’re now seeing AI shape both the threat and the solution. In 2024 alone, our firm detected 4.3 million counterfeit infringements online—an alarming 15% increase year-over-year.”
Alarming indeed. Here are 5 key revelations from the study.
1. AI is the New Enabler of Counterfeiting - A Two-Sided Threat:
The Counterfeiters' Edge: AI is dramatically lowering the barrier to entry for bad actors. They can now mimic brand listings, and impersonate social media accounts with unprecedented ease and speed. They can also effortlessly create professional-looking fake websites—a situation that, according to Red Points’ data, is projected to surge 70% in 2025. This isn't just about cheap knock-offs anymore; it's about sophisticated deception at scale. The Consumers' Assistant: Shockingly, 28% of online shoppers who bought fake goods used AI tools to findThis isn't a fringe behavior; it's a growing trend, especially among Gen X, suggesting consumers are actively leveraging AI in their pursuit of cheaper alternatives. This fundamentally shifts the narrative – it's not just about being tricked; some are actively seeking fakes with AI's help.
2. Accidental Counterfeiting is a Major Problem - Trust Signals are Being Hijacked:
1 in 4 luxury counterfeit purchases are unintentional. This shatters the perception that buyers knowingly seek out high-end fakes. Realistic pricing, secure payment promises, and active (but fake) social media presence are successfully deceiving consumers. AI-generated legitimacy cues are becoming indistinguishable from the real deal. Brands are Paying the Price for These Mistakes: A staggering one in three shoppers stop buying from the genuine brand after an accidental counterfeit experience.This highlights the significant damage to brand loyalty and future sales, even when the brand isn't directly selling the fake. High-trust categories like luxury and toys are particularly vulnerable.
3. The "Dupe Economy" is Real and Influencer-Driven:
Nearly a third (31%) of intentional counterfeit buyers were swayed by influencer promotions. Social media is driving the demand for "dupes" – budget-friendly replicas. Authenticity is taking a backseat to price and perceived identical appearance, especially among younger demographics. This isn't just about saving money; it's a shift in consumer mindset.The report suggests a growing acceptance of fakes as clever alternatives, fueled by social validation and influencer endorsements.
4. Marketplaces Remain Key, But Social Media and Fake Websites are Surging:
Marketplaces (both US and China-based) are still the primary channels for counterfeit purchases. However, fake websites (accounting for 34% of unintentional purchases) and social media are rapidly gaining ground as sophisticated avenues for distribution, amplified by AI's ability to create convincing facades. Social media ads redirecting to infringing websites saw a massive 179% year-over-year growth.This highlights the increasing sophistication of counterfeiters in leveraging advertising platforms to drive traffic to their fake storefronts.
5. Younger Generations are More Vulnerable in Key Categories:
Millennials are significantly more likely to have their personal data stolen after purchasing from fake websites (44% vs. 34% average). This suggests a higher susceptibility to sophisticated phishing scams disguised as legitimate e-commerce sites. Gen Z and Millennials are 2-4 times more likely to accidentally purchase counterfeit luxury goods and toys compared to Baby Boomers.Their online savviness might be a double-edged sword, making them more exposed to deceptive listings.
This study serves as both a consumer alert and a brand wake-up call. The rise of AI as a tool for both counterfeiters and consumers is a seismic shift that demands urgent attention. With compelling data and a clear-eyed look at accidental purchases, influencer-driven “dupe culture,” and the growing sophistication of fake storefronts, the findings paint a stark warning for the future of online shopping.
“Counterfeiting poses a serious and evolving threat to innovative businesses and consumer safety,” notes Piotr Stryszowski, Senior Economist at the Organization for Economic Co-operation and Development (OECD). “Criminals constantly adapt, exploiting new technologies and shifting market trends—particularly in the online environment. To effectively counter this threat, policymakers need detailed, up-to-date information. This study makes an important contribution to our understanding of how counterfeiters operate and how consumers behave online.”
Ultimately,The Counterfeit Buyer Teardownreport underscores a new reality: counterfeiting is no longer confined to shady sellers or easily spotted scams—it's embedded in the very technologies shaping modern commerce. As AI continues to blur the lines between real and fake, the pressure is on for brands, platforms, and policymakers to respond with equal speed and sophistication. Combating this growing threat will require more than just awareness—it demands collaboration, innovation, and a commitment to restoring trust in the digital marketplace before the counterfeit economy becomes the new normal.
~~~
Source: https://get.redpoints.com/the-counterfeit-buyer-teardown-2025
