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It's illegal because they are stealing the brand name of someone else. Companies try to make their brands stand for something (style, quality, durability). Knockoff items not only affect a company's sales, they can undermine the brand. For the low-end bags, A-grade, the quality of workmanship requirements are not too high, Hebei province Baigou town also has the relevant production capacity.
The same logic goes for Chanel replica bags