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Luxury Goods Face a Fake News Problem. Is Silence the Right Strategy?

by Tina

Since early April, social media has been flooded with TikTok videos promoting the idea that some of the most coveted and expensive fashion items are not made in ateliers in France and Italy, as Europe’s big luxury brands claim, but are instead made in China at far lower costs.

Luxury’s association with European craftsmanship is a key pillar of the industry’s public image, and the attack on that association is tied to Trump’s escalating trade war: Faced with potentially steep U.S. tariffs on their exports, Chinese manufacturers have begun marketing direct-sale products to American consumers. The influencers claim to be “exposing” Western brands, offering viewers the chance to buy cheap replicas of Hermès, Chanel and Louis Vuitton that are made by the very factories they claim to be.

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Experts say the claims are mostly false. While it’s true that many European luxury brands do source at least some of their products’ components from China, it’s unlikely that the real suppliers would publicly disclose them, jeopardizing those valuable partnerships.

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It didn’t seem to matter. Viewers mostly seemed to be interpreting the videos’ content based on comments and follow-up posts. On April 29, the hashtag #中国工厂# on TikTok had more than 30,000 hits, with popular posts being viewed hundreds of thousands of times. Many of the original videos have been deleted, but not before they have been copied and reposted, often with repeated comments that “big luxury goods are actually made in China.”

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Such claims are particularly dangerous for the luxury industry at a time of falling sales, as consumers have begun to question the quality and provenance of increasingly expensive luxury goods. Luxury industry executives have also quietly acknowledged that the value proposition of luxury goods has become a problem.

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“Consumers have lost confidence and desire to buy,” said Isabelle Harvie-Watt, co-founder of Milan-based brand and communications consultancy Anima. “Consumers no longer feel the value of these bags.”

So far, brands have mostly tried to avoid directly engaging in the conversation, a strategy that runs counter to the approach companies often recommend to combat the spread of false information: radical transparency.

“It’s always important to be honest,” said Paolo Argenti, a professor of corporate communication at Dartmouth’s Tuck School of Business. This approach works well in many different industries and has been “used thousands of times in various contexts.”

But luxury brands have mostly remained silent, mostly refusing to reiterate previous claims that their products are not made in China — though Hermès told The New York Times last week that its bags are “100% made in France.” French luxury industry groups have quietly released a position paper calling for action against the spread of “false information” and counterfeits, but it has not been widely publicized. Hermès, Chanel, LVMH and Gucci’s parent company Kering did not respond or declined to comment for this article.

The luxury industry is not known for transparent communication. The industry is built on clever myth-making, relying on carefully crafted messaging and tightly controlled narratives. Brands that claim to have superior quality that can support their increasingly high prices are often closely associated with the cultural influence of French and Italian savoir-faire.

But for many brands, it can be difficult to discuss openly how and where luxury goods are produced: while luxury brands still use the “Made in Italy” and “Made in France” banners, in reality their supply chains are often more complex and global.

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