Controversy Erupts on Social Media Over Luxury Brands’ Authenticity

The luxury market stands as one of the most dynamic and profitable sectors within the global economy, boasting a value nearing $500 billion. Its consistent growth is propelled by consumers with an increasing focus on status, quality, and exclusive experiences. Luxury brands establish their success upon intangible yet fundamental elements, anchored in reputation, prestige, and trust.

Consequently, targeted disinformation campaigns possess the potential to inflict devastating economic and reputational damage, influencing public perception and destabilizing entire markets.

Luxury Market Under Threat: The Impact of Disinformation and Rising Tariffs

These narratives pose a particularly serious threat to the sector at an already critical juncture, characterized by a widespread decline in sales. The situation is further compounded by the fact that 68% of millennial consumers report that they are "evaluating the value-for-money ratio more carefully," while skepticism grows regarding the actual origin and intrinsic value of increasingly expensive luxury goods.

The luxury market is struggling to recover from a period of anemic growth, partly due to decreased demand from Chinese consumers, traditionally among the most loyal buyers. LVMH, the conglomerate that controls brands such as Louis Vuitton, Christian Dior, and Tiffany, is considered a reliable barometer of the sector.

However, the French group recently reported a concerning slowdown. Revenues for its fashion and leather goods division, its largest, decreased by 5% on an organic basis, while sales in the U.S., which account for nearly a quarter of its turnover, registered a 3% decline. The stock price, reflecting this crisis, has lost ground on the exchange in recent months.

The cost-of-living crisis, driven by high inflation and soaring interest rates, has prompted many consumers to reduce purchases of luxury goods, prioritizing essential or more durable products. However, the sector's slowdown, already grappling with falling demand and a shrinking customer base, has been further exacerbated by the trade war between China and the U.S.

New tariff policies from the Trump administration risk worsening an already critical situation. The U.S., the second-largest global market for personal luxury goods (28% of the total), is an essential driver for the industry.

Although Europe maintains its leadership with a 30% share in 2024, it was American consumers who fueled the growth of the Old Continent last year. Their influence as trendsetters remains crucial for the fortunes of brands.

Regarding China, the Asian nation stood significantly lower, with a share of only 12%, subsequently decreasing following a 20% drop in sales recorded the previous year. On the production side, however, the European Union dominates the luxury supply chain. According to the European Commission, in 2023 it generated 70% of the global supply in fashion, leather goods, jewelry, and perfumery, for a total value of $288 billion.

While tariff tensions continue to dominate the political debate, it is consumers who are dictating the true course of the luxury market. The performance of this sector traditionally represents a sensitive barometer of global economic health, because its buyers, among the most attentive to macroeconomic dynamics, tend to be the first to reduce non-essential purchases in anticipation of financial turbulence.

A recent study by the ACRC reveals that among high-net-worth consumers, 50% anticipate a recession in the next twelve months, a significantly increased percentage compared to last year. This growing caution among premium clients could foreshadow a further contraction of the sector.

Analyst projections depict a profoundly altered landscape for the luxury sector. A previous expectation of 5% growth now indicates an estimated contraction of 2% in 2025. Such a decline could intensify with the potential reintroduction of U.S. tariffs, an element that would jeopardize the compensatory strategy implemented by major European groups such as LVMH, Chanel, and Cartier. Indeed, the aforementioned brands have focused their attention on the American market to counterbalance the decrease in demand originating from China.

The hypothetical reinstatement of tariffs following the ongoing 90-day truce could trigger a domino effect. The European luxury industry would suffer a severe blow, and the U.S. economy itself would feel the impact. Although Trump argues that these measures favor domestic production, the reality is that high costs make reshoring impractical for most companies. The result? A trade policy that, under the guise of patriotism, risks proving counterproductive for the United States and potentially devastating for international markets. 

Luxury Brands Face Backlash Over ‘Made in Europe’ Claims

An attack on a luxury brand's reputation, through fake news, media manipulation, or defamatory reviews, can trigger a domino effect ranging from a collapse in sales to the devaluation of the brand, and even the loss of exclusive partnerships.

With the increasingly pervasive spread of social networks, public opinion forms rapidly, and disinformation becomes a potentially damaging tool, capable of compromising years of positioning in a short period.

While luxury is based on authenticity and cultural heritage, it is also true that its vulnerability to reputational risks demands increasingly sophisticated crisis management strategies. In light of this, major luxury brands have long employed strategies to protect their authenticity. For instance, devices capable of detecting counterfeit luxury goods are available on the market. However, the issue of disinformation concerning the sector will remain critical for both safeguarding the market and ensuring the financial sustainability of the industry.

It is for these reasons that the recent wave of viral videos on TikTok, which began circulating in April, takes on particular relevance.

These videos claim that some of the most iconic and expensive luxury products are not manufactured in French and Italian ateliers, as claimed by the major brands, but are instead produced at reduced costs in China.

If confirmed, this narrative could compromise the perception of authenticity and craftsmanship on which the luxury market is based, with possible repercussions on brand value and consumer trust.

The challenges to the traditional narrative of luxury, which links high-end products to European craftsmanship, are connected to the period of greatest intensity of the Trumpian trade war.

Faced with the prospect of punitive tariffs on exports to the United States, Chinese manufacturers have reportedly developed an alternative strategy that consists of bypassing Western brands to offer American consumers products they present as "the same product" at significantly lower prices.

On TikTok, some influencers present themselves as champions of "truth," promising to expose major brands and showcasing alleged Chinese factories that produce both original items and replicas of Chanel, Hermès, and Louis Vuitton.

Experts tend to consider these claims largely unfounded. Although many European luxury brands source some accessory components in China, it is highly improbable that their official suppliers would jeopardize lucrative business relationships by making such information public.

The TikTok videos in question, produced in English and with prices expressed in dollars, clearly appear to target the American market, among the main consumers of European luxury goods. However, contrary to the claims of these content creators, European labeling regulations are stringent. To be able to bear the "Made in Europe" label, the last substantial transformation of the product must necessarily occur within the European Union.

Luxury brands pay particular attention to this aspect. Hermès, for example, openly publishes the list of its production sites, all located in Europe, on its website. Louis Vuitton also adopts a similar policy.

As investigative journalist Noëmie Leclercq explained to EuroVerify, while some brands in the so-called "lower tier" of luxury, such as Prada or Ralph Lauren, may indeed delegate certain production phases to China, this is less likely to apply to houses like Hermès, which occupy the top position in the luxury sector.

Regarding the products shown in the viral videos, Leclercq expresses strong doubts about their authenticity, stating that "in most cases, they are counterfeits." This makes it improbable that the creators actually represent original equipment manufacturer suppliers for the major brands. Rather, the emergence of this trend appears to have predominantly political motivations, fitting into the broader scenario of trade tensions between the West and China.

The effectiveness of these videos, however, appears undeniable. Judging by the engagement generated, the enthusiastic comments, the viral sharing, and the amplification posts, the message has been received by the public as substantially truthful. The hashtag #ChineseFactory recorded tens of thousands of mentions in just a few days, with the most popular content reaching hundreds of thousands of views.

Although many of the original videos have been removed, the damage has been partly done. The content, replicated and redistributed in numerous versions, often enriched with comments that reiterate the claim "true luxury is made in China," has now to some extent passed the point of no return.

At the same time, the phenomenon of "dupes" (short for "duplicates," products inspired by luxury design but technically legal) has recorded a significant increase. The hashtag #dupe, which already had six point five billion views on TikTok at the beginning of twenty twenty-four, exceeded ten billion at the beginning of twenty twenty-five, reaching an increase of fifty-four percent in just over a year. These figures confirm a trend in which the democratization of luxury through emulation is redefining the boundaries of the sector.

The Inertia of Major Luxury Brands

The luxury sector has always built its allure on calculated nuances. Its magic resides in meticulously curated narratives, such as the myth of the artisanal workshop and the aura of European savoir-faire that justify stratospheric prices. But this mythological architecture now falters in the face of a question as simple as it is embarrassing: Where are luxury goods actually produced? Although brands continue to flaunt "Made in Italy" or "Made in France" labels, their supply chains have long been complex global networks, a detail that makes any attempt at transparency delicate.

Faced with a wave of accusations on TikTok, the industry has chosen an eloquent silence. Only Hermès has broken that silence, telling The New York Times that its bags are entirely produced in France. Trade associations have prepared documents to counter what they define as "false information," but without launching a real public campaign to support them. Brands such as Chanel, LVMH and Kering (the owner of Gucci) have not released official statements, not even to confirm their production policies.

Transparency, however, has not always proven to be a winning strategy for luxury brands. Chanel provides a clear example. After raising the price of its iconic flap bag beyond $10,000, the maison sought to justify the value with campaigns showcasing the production process, aiming to highlight artisanal savoir-faire. An attempt that, in at least one instance, produced the opposite effect.

In April, Women's Wear Daily published a video filmed in a French Chanel factory, accompanied by a dedicated article. The images, instead of celebrating craftsmanship, revealed a highly mechanized process, with machines performing most of the sewing. The public's reaction was immediate. Many followers expressed astonishment and disappointment at a work ethic so far removed from the romantic idea of the artisanal workshop. Chanel reacted promptly, removing the video within hours and replacing it with more traditional images of artisans at work, a course correction that did not go unnoticed.

Luxury brands' absence of public responses to TikTok controversies may stem from their traditional commitment to exclusivity. Historically, these companies have avoided engaging with critics or creators who challenge the fundamentals of the luxury market, as such interactions risk undermining their prestige.

Yet today's digital landscape functions differently from traditional media environments. Social media algorithms prioritize high-engagement content, including polarizing debates, which can magnify reputational challenges. In this environment, non-response strategies, once effective due to tighter narrative control, may yield unintended consequences. Some analysts note that silence risks being misinterpreted in ways that diverge from brands' intended messaging.

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