Shenzhen , China ( CNN ) -- 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 have a nose for what 's hot and what 's not . Nearly 70 % of all fake goods -- including DVDs , clothing , and electronics goods -- seized worldwide from 2008-2010 came from China , according to the World Customs Organization . And looking at the shops in Shenzhen 's Huaqiangbei commercial district -- a destination for buying electronics , especially fakes -- Beats by Dr. Dre are definitely hot , prominently displayed next to iPhones , Samsung gear and Nikon cameras . To look at them , some are clearly fakes with poor packaging and logo color schemes that are wildly different from those well-known products . Rise of high-priced headphones . Behind the shops and inside small rooms around the district , workers in their early 20s can be seen busily assembling counterfeit goods , such as smartphones and iPads . The long corridors are filled with cigarette smoke that drifts out from the tiny workshops as deliverymen rush by with their arms full of electronic components . Everywhere you hear the sound of packing tape being wrapped around cardboard boxes . The counterfeit boom is fed , these days , by the rise of high-end headphones that Dr. Dre 's audio products helped kickstart with the launch of Beats in 2008 , analysts say . Just a few years ago , few people would be ready to pay several hundred dollars for a pair of headphones . Now , with celebrities like Lady Gaga , Justin Bieber and P. Diddy putting their names to signature pairs , Beats is the hottest brand for stylish music lovers . `` Today , the premium headphone market is defined by fashion and brands as much as it is by sound quality , '' Ben Arnold , director of industry analysis at market research firm NPD Group said in a recent report . `` One third of premium headphone buyers are under the age of 25 and many of these consumers view headphones as equal parts listening device and fashion accessory . '' Richard Kramer , analyst at Arete Research , added that better audio quality in smartphones is also one of the main driving forces behind making high-end headphones viable . In the U.S. , sales of headphones rose by a third last year to $ 2.4 billion , with Beats by Dr. Dre making up almost 70 % of all high-end headphones during the Christmas period , according to market research firm NPD . In Europe , sales of headphones hit an all-time high in the first quarter of the year , figures from market research group GfK show , with premium headphones leading the way . Total sales increased by 9 % during Q1 on Europe 's 17 main markets to 304 million euro ( US $ 410 million ) , according to GfK . Real or fake headphones ? At another Shenzhen store , a sales executive at a factory and trading company , connects a pair of fake Beats Pro to her iPhone and puts them on the reporter 's head . The sound quality is surprisingly good . In the U.S. , an original pair would cost $ 400 . She offers her best quality headphones for the wholesale price of $ 70 , medium quality for $ 45 and `` so-so quality '' for $ 30 . `` Medium quality is most popular , but the trend is going towards high-end . Consumers want good sound , '' she said , adding that she can deliver 100 units of any Beats product by the following day . For 1,000 items it will take a week . `` Since it 's copies , we do n't want to have too much in stock , '' she said . On the streets and down in the subway , in-ear Beats headphones are sold for as little as $ 1 . According to the company website , real in-ear Beats sell for $ 100 and up . Beats Electronics , the company behind the Beats by Dr. Dre brand , said in an email to CNN that the company shows `` a fierce commitment '' to fight piracy and that it works in close collaboration with anti-counterfeiting organizations , police and customs authorities to identify counterfeit sellers , distributors and manufacturers on key markets . They also scan online marketplaces for unauthorized use of Beats trademarks . `` Since efforts began , Beats has seized hundreds of thousands of counterfeit products in more than 50 countries , '' the company said . The U.S. government has long complained about the theft of intellectual property in China . CNN reached out to authorities in Shenzhen to ask about counterfeit sales activities , but they have not yet responded . However it appears that Chinese officials are moving to crack down on counterfeit trade . A month-long joint operation with U.S. Customs in July resulted in the seizure of more than 243,000 counterfeit products using trademarks from Beats by Dr . Dre. , Apple , Blackberry and Samsung . U.S. Customs and Border Protection said the operation was the biggest bilateral customs enforcement effort ever conducted by the U.S. As a result , a man in New Orleans was arrested for allegedly importing counterfeit Dr. Dre headphones and selling them on Craigslist . Evading the police . But in Shenzhen , the counterfeiters are working hard , too . CNN spoke with another woman involved in the trade -- a `` copy brand exports professional '' according to her business card -- who helps companies to transport counterfeit goods from Shenzhen to other countries . She said she advises her customers to avoid Chinese logistic companies and always use European or American shipping companies since `` customs usually trusts these brands better . '' Storeowners reveal other tricks to bypass customs . They send all Beats in two boxes ; the outer box has a made-up name to hide the real goods . `` We got the idea from a European customer , '' she said . Precautions aside , in the Huaqiangbei commercial district few seem to have any moral objections about the pirating of goods . Outside the Huaqiangbei Police Station , a friendly officer in sunglasses points down the street when asked where the best fake mobile phones can be found . Asked if such purchases are legal , he just breaks out in loud laughter .
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 ''