According to industry executives the fake products are primarily being sold in Australia via online web sites with brands such as Sennheiser employing a team of specialists whose sole job is to track down fake products.
According to Geoff Mathews the CEO of Sydney based headphone distributor Convoy the fake headphone problem "has been an issue for some time".
Mathews who distributes the Monster, Diesel, Sol Republic and Bowers and Wilkins headphones in Australia and was the former distributor of the Beats headphone range said "Fake headphones are an issue in Australia, particulary with the Beats range. Recently we saw a fake Bowers and Wilkins pair of headphones which was surprising as these are hard to reproduce".
Michael Sloss a director at Sennheiser Australia said "We have a team of specialists who are working to track down fake headphones and when we identify someone who is selling a fake Sennheiser headphone we interface with customs to stop the sale. A lot of the fakes are sold via online web sites in Australia and as an industry several distributors and manufacturers are now working together to put in place systems that make selling a fake headphone difficult".
The Klipsch Group whose headphone range is distributed by Adelaide based Powermove has launched a serial-number verification portal on its website to combat counterfeiting headphones.
The company has incorporated a serialised holographic label with targeted security features on all of its headphone boxes. Users can enter the hologram's serial number found on the box to determine if their Klipsch headphones are genuine products, the company said.
"Though we've made significant strides in addressing the issue, this verification portal is just one of many resources we're continuing to implement to fight counterfeiting," said Mike Klipsch, president of global operations for Klipsch Group. "Our obligation is to our brand, product integrity, and most importantly, our customers, and we will provide the utmost protection to each through legal means when necessary."
During a recent visit to a Sydney market SmartHouse saw several Beats headphones being sold at up to 50% under the recommended retail price for the same headphones being sold at a mass retailer.
Recently a CNN reporter approached wholesale companies in Asia 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 in China.
"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 including Australia.
She said she recently sold a large amount of counterfeit Beats by Dr. Dre for $50,000 the same headphones are worth $500,000 wholesale in Australia.
While top-line Beats headphones retail for $395 in Australia, 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.