Psychological warfare Look - this is how cheaply luxury brands produce in China
TikTok videos reveal the huge margins between production costs in China and the retail prices of Western luxury goods. What is this supposed to achieve?
No time? blue News summarizes for you
- Numerous videos on TikTok denounce the cheap production of expensive Western luxury goods in China.
- The campaign is apparently part of China's backlash against the US tariffs. It is part of the psychological trade warfare.
- The aim is to persuade buyers of luxury brands to buy cheaper Chinese products.
- However, the strategy could backfire.
China has apparently opened up a new arena in its trade war with the US: social media. TikTok in particular is currently being flooded with videos in which Chinese influencers show how cheaply well-known brands have their goods or parts of them produced in China - and then sell them as branded goods and luxury items for horrendous sums of money.
For example, a Chinese handbag manufacturer reveals in a video that the production costs of a Hermès Birkin bag are just under 1400 dollars - with a retail price of 38,000 dollars. An influencer claims that 100-dollar leggings from the Canadian-American fashion brand Lululemon are available in China for 5 to 6 dollars - without the logo, but from the same production line.
Some videos on the Chinese social media platform also postulate that luxury brands such as Louis Vuitton label their products "Made in Italy" or "Made in France", but produce most of them cheaply in China.
What is the truth of these claims?
The claims cannot be independently verified. However, the accusations are not made up out of thin air, says Frank Müller, HSG lecturer and luxury brand expert, in an interview withBlick. It is well known in the industry that some luxury brands produce more abroad than they disclose to customers. And the margins in the luxury industry are generally large.
The fact that China is now revealing how the market works could be aimed at persuading buyers of luxury brands to buy cheaper Chinese products.
However, Müller does not believe that the strategy will work. In his opinion, the campaign could even be detrimental to the Chinese market, as the videos would destroy trust between the brands and suppliers without the Chinese manufacturers benefiting from it. And one should not forget: "It's about more than just the product. When I buy a certain brand, I am making a statement about my attitude to life."
