Inside Paraguay’s Ciudad del Este — Latin America’s Biggest Grey Market for Replica Goods

Today, Marcus Steele introduces a mysterious market in Latin America: Ciudad del Este, located in Paraguay. Let’s take a closer look at this intriguing city.

Ciudad del Este, situated in eastern Paraguay, is officially known as Este City. On Google Maps, you can see it lies at the tri-border area of Paraguay, Brazil, and Argentina — reminiscent of Southeast Asia’s “Golden Triangle.” Historically, such border regions have been hotbeds for grey and black markets. Here, prosperity and chaos coexist, with counterfeit goods appearing everywhere, frequently transshipped and poorly regulated.

I first learned about this city through a client who has been successfully operating in Paraguay, exporting TOMS shoes at scale.

TOMS, while not as famous as Nike, Adidas, or Gucci, is a third-tier brand founded by American designer Blake Mycoskie in Argentina. Its “One for One” charity model — donating a pair of shoes to African children for every pair purchased — helped it gain popularity. In recent years, TOMS shoes have become highly sought after in several South American countries like Chile, Peru, and Paraguay, especially among fashionable women.

Officially priced at $50–60 per pair, TOMS canvas lace-up shoes can be sourced in Ciudad del Este for less than $10 per pair through China’s Jinjiang shoe supply chain. This price point suits the region’s economic realities, where many consumers are price-sensitive and prefer affordable replica products. This provides opportunities for some cross-border eCommerce sellers dealing in replica goods.

According to my client, Ciudad del Este hosts one of the largest open-air markets in Latin America, considered a classic example of a grey economy. The market is globally known for selling counterfeit products, especially electronics (like smartphones and watches) and luxury brands (like Louis Vuitton and Chanel), often alongside legitimate goods.

Every day, many Brazilian and Argentine tourists cross the border to buy goods at prices lower than in their own countries. Most products come from China, Southeast Asia, and other low-cost manufacturing countries, making this a thriving hub for price-sensitive buyers and cross-border sellers alike.

Types of Replica Goods

In Ciudad del Este, replica products dominate the market in several categories:

1️⃣ Electronics
Products from China’s Huaqiangbei market are extremely common, including counterfeit smartphones, tablets, and accessories (like chargers and headphones) from Apple, Samsung, Xiaomi, and other brands.

2️⃣ Apparel and Footwear
Counterfeit athletic brands from Putian, such as Nike, Adidas, and Puma, sell exceptionally well. Beyond sportswear, luxury clothing and bags from Guangzhou replica brands like Gucci, Prada, and Louis Vuitton are also widely available.

3️⃣ Luxury Watches and Accessories
High-quality replica watches from Guangzhou, including Rolex and Omega, along with handbags and sunglasses, are market favorites. Some of these “Super A” replicas are so meticulously crafted that they nearly match the originals.

4️⃣ Perfumes and Cosmetics
Counterfeit perfumes from Chanel, Dior, and other high-end brands are sold at extremely low prices. Many brands are openly copied and displayed for sale, making this market strikingly bold.

5️⃣ Other Products
This includes pirated software, video games, CDs, as well as fake pharmaceuticals and health supplements — commonly referred to as “the black five categories.”

How Replica Products Are Sold

In Ciudad del Este, counterfeit goods are typically distributed through several channels:

1️⃣ Market Stalls
Replicas are displayed in open-air stalls or small shops, often alongside legitimate products. Vendors accept multiple payment methods and frequently allow bargaining.

2️⃣ Cross-Border Trade
Many replicas are exported directly to neighboring Brazil and Argentina, and some even reach other countries through unofficial channels.

3️⃣ Online Platforms
Social media platforms like WhatsApp and Facebook, along with small e-commerce websites, are increasingly used for distributing replica products, expanding market reach.

Why Grey Markets Persist

Research on Google shows that the persistent grey-market issues in Ciudad del Este are deeply linked to Paraguay’s national conditions:

• Economic Dependence: Paraguay relies heavily on this informal economy, limiting enforcement efforts despite international brand and Brazilian government pressure.

• Regulatory Gaps: Legal loopholes and potential collusion between local authorities and merchants make enforcement difficult.

• Limited Brand Power: Even when brands file lawsuits or pressure the government to curb counterfeits, results are minimal.

In Ciudad del Este, intellectual property is practically worthless. Brands face a reality of “intent without power”, where enforcement is almost impossible.

Considering all this, the grey-market phenomenon in Ciudad del Este can only be explained by the principle: “If it exists, it is justified.”

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