According to the Economic Times, Chinese suppliers are exposing the behind-the-scenes workings of the luxury industry, selling products similar to those of the big brands directly to Western consumers, all at prices up to 90% lower. The strategy is shaking the prestige of brands such as Louis Vuitton, whose shares, already falling since the start of the year, have suffered a further decline, while the sector enters a state of alarm.
🔗 Source: TheEconomicTimes
The revelation is sending shockwaves through the luxury world. The videos, widely shared on TikTok, show Chinese workers showcasing the quality of the products, the materials used and even the production processes, claiming they are the same as those used for the big Western brands. Although the items sold bear no official logos or insignia, they are promoted as «from the same supplier, same quality, without the brand price».
"It's the same product, just without the label”, says one of the suppliers in a video with thousands of views
🔗 Watch the videos: Video 1 | Video 2 | Video 3 | Video 4 | Video 5
The current public exposure of these processes has raised suspicions that the Chinese government may have relaxed, or even quietly lifted, confidentiality clauses that previously prevented manufacturers from disclosing any link to luxury brands. Although there is no official confirmation from the Chinese authorities, the coincidence in timing with the intensification of trade tensions with the United States raises questions about a possible strategy of political and economic pressure.
Meanwhile, the consequences for the big brands are already visible in the financial markets. Shares in LVMH, the group that owns Louis Vuitton, which were already trending downwards, fell about 7% in April alone, after quarterly results below expectations. The company's market capitalisation fell to around 246 billion euros, being overtaken by Hermès, which became the most valuable luxury brand in the world on the stock market.
🔗 Source: Reuters
Faced with the growing exposure of the industry's inner workings and the diversion of consumers to direct alternatives from China, several brands are panicking. According to The Times, experts warn that this trend could undermine consumer confidence and damage brand integrity. In addition, the possibility of counterfeit or inferior-quality products being sold as originals raises legal and ethical concerns.
🔗 Source: The Times
Some videos also claim that products are made in China and only sent to Europe to be labelled "Made in Italy" or "Made in France", which could deeply shake the perception of authenticity associated with the big fashion houses.
For now, luxury is under pressure, not only because of the global economic slowdown, but also because behind-the-scenes secrets, once carefully guarded, are now being exposed to the world, one video at a time.
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