Several videos circulating on TikTok show Chinese factory owners and suppliers producing luxury brand products – such as Lululemon leggings or Hermès Birkin bags – at prices several times cheaper than their retail cost. For example, a Birkin bag that sells for thousands of dollars in the retail market actually costs only $1,000 to produce. Similarly, leggings sold for $100 are said to be manufactured for just $5-$6.
Some manufacturers have indicated that they produce items for famous brands in their factories. They claim that a single factory simultaneously produces both expensive branded products and their cheaper alternatives. These assertions suggest that many well-known brands have actually outsourced production to China, but unbranded products are also being manufactured in the same factories. However, whether this practice is based on official contracts or is illegal remains a contentious issue.
These videos often provide detailed analysis of material costs, labor, and production processes. They emphasize that the difference between branded luxury products and their unbranded alternatives is very small. Some content creators are also providing consumers with instructions on how to purchase products directly from factories – which allows them to bypass the traditional retail chain.
Impact of duties and trade policy
The surge in these exposé-style videos coincides with recent U.S. tariff increases on Chinese imports. The removal of the de minimis exemption means that all goods from China and Hong Kong, regardless of value, are now subject to import duties, with some tariffs reaching up to 145%.
In response, Chinese manufacturers are directly connecting with consumers through TikTok, enticing them with lower prices and alternative purchasing methods. Using this direct-to-consumer (D2C) model, they are not only reducing tariffs and price markups but also serving consumers directly.
Consumer reaction and impact on industry
Consumers are warmly welcoming these videos. Many are dissatisfied with the artificially inflated prices of luxury brands and are positively assessing this transparency. At the same time, the trend is sparking widespread discussions about brand value, production ethics, and the true cost of products.
However, this situation also raises concerns about intellectual property rights and the risk of counterfeit products. While some manufacturers are authorized producers for luxury brands, others do not have the right to copy branded products – which is intensifying legal and ethical debates in the industry.
In conclusion, this growing movement on TikTok is dealing a serious blow to the traditional luxury pricing system. Chinese manufacturers are opting for transparency, revealing production costs to consumers and creating direct purchasing opportunities for them. This trend could have a long-term impact not only on brands and supply chains but potentially on the entire global retail system.
Prepared by Navruzakhon Burieva
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