Iran is showing strong potential for luxury markets. Early last year, Iran re-entered the global economy after more than 30 years of isolation and austerity. With an educated, surging middle income population of almost 80 million, and a GDP of more than $400 billion, a number of brands are reportedly interested in returning to Iran or increasing their physical and digital presences there.

The young generation is hungry for luxury goods and wants to distance itself from the austerity of the ruling regime. Brands like Versace and Roberto Cavalli are expanding their brick-and-mortar networks in the capital Tehran. Iran is the second largest economy in the Middle East following only behind Saudi Arabia. The capital Tehran is home to luxury malls featuring major Western brands.

However, a grey market and a significant market for counterfeit goods have flourished. Grey market goods are typically defined as genuine branded goods obtained from one market that are subsequently imported into another market and sold there without the consent of the trademark holder.

So, Iranian consumers have grown used to a market littered with fake goods. Many wealthy Iranians are not well informed about the change in the retail landscape and still assume luxury goods in local boutiques are convincing fake versions of the Western brands they profess to be.