Police found 920,000 yuan (US$116,603) worth of goods in a raid of Li Yinguo's shop in the city's south Lujiabang Rd, including bags, watches, glasses and suits all bearing fake logos of top fashion brands.

Li, the suspect, used to hawk fake products at Xiangyang Fashion and Gift Market, the city's formerly renowned shopping area for copycat products, said the police.

"We used to see many scalpers in or around the Xiangyang market, but we couldn't take legal action because they never actually carried the counterfeits products with them," said an officer.

The floating merchants usually lead the potential buyers to storehouses in nearby residential areas, where clothing, shoes, wallets and watches all bearing labels of famous brands like Louis Vuitton and Chanel are.

"A counterfeit product can usually be sold at a price ten times its cost," the newspaper quoted Li as saying.

He rents his current shop for 40,000 yuan a month after the government shut down Xiangyang market in June. He wanted to continue to "serve those frequent customers," Li said.

Li kept "long-term" cooperation with some tour guides from the city's travel agencies, as his business focuses on foreign visitors.

Despite the closure of Xiangyang market, police have discovered that the sale of counterfeits continues in the same neighborhood.

About 200 of the 874 former Xiangyang dealers have moved to Yataishenghui Market on Pudong's Century Avenue, which opened in August.

Three other clothes and accessory markets on Fumin, Longhua and Qipu roads are the main sites to house former Xiangyang stores.

The city has launched several campaigns against these floating merchants and affiliated fake goods shops.