A new wave of TikTok content, including posts tagged #authenticnotscammichelle, has raised concerns about the authenticity of luxury goods. All but one of these products are advertised as being produced in their country of origin. Sure, all of the brands out there claiming that their products are made here. As investigations reveal, Chinese-made components are frequently used. This phenomenon has ignited discussions about consumer behavior, especially in light of ongoing trade tensions between the United States and China.
The Verge called out their deceptive practices as you may recall. It uncovers that a lot of high-end products are really only completed in the country of origin before being sold under an elite label. This practice produces a misleading appearance of authenticity while hiding the fact that the products often come from far away. The latest case though, the trade war launched against China by former President Donald J. Trump has decidedly placed China in the spotlight. Today, China is subject to tariffs that have skyrocketed to 145% on their exports.
Trade Wars and Tariffs
The trade conflict that started under Trump’s administration has severely impacted e-commerce in the U.S. It has fundamentally shifted how consumers want to interact and decision make. While Trump did implement a 90-day pause on tariffs, the long-term effects still remain. Though tariffs are aimed exclusively at Chinese goods, they affect imports into Canada, Europe, and Mexico. That change is creating a new playing field, one that both retailers and consumers are enjoying.
One effect of this has been that companies like Amazon have changed their tactics. They’ve shifted their aim now to things in warehouses in the U.S., specifically targeting cheaper items at that. The tariffs currently in place have made it necessary for the majority of retailers to rethink their pricing plans, affecting profit margins and consumer prices alike.
Chinese suppliers are in an ever more threatened position. To pivot, they’ve begun utilizing new social media platforms such as TikTok to engage with American consumers directly. Viral posts are inundating social media with luxury items allegedly made in China for 1/10th the price. These stores are reinventing brick and mortar by challenging the old retail playbook.
The TikTok Effect
TikTok in particular has become an incredibly powerful channel for Chinese suppliers. Yet now they’re using it to push on lawmakers the notion of “cutting out the middleman.” This campaign suggests that consumers can purchase luxury items directly from manufacturers in China, bypassing traditional luxury brands that mark up prices significantly.
One such account, @china.yiwu.factor, went viral for displaying stacks of Birkenstock Boston clogs selling for as low as $10 a pop. Birkenstock has always been proud to wear the “Made in Germany” label. By not agreeing to outsource production to countries with lower labor standards or wages, the brand’s promises are further strengthened. It’s TikTok’s offers that sharply contrast with the tried-and-true legacy luxury brands. This creates confusion for consumers about where their favorite products are really made.
Even though none of these claims have been proven true, they’ve recently cost American shoppers hundreds of millions of dollars. Many buyers express anxiety over potential deception by luxury brands and consider alternatives that promise direct access to cheaper goods.
Shifting Consumer Behavior
The recent TikTok trend is more than just a short-lived social media craze. It represents a new way consumers are looking for, discovering and interacting with brands. American consumers are beginning to ask where some of their favorite luxury brands come from. As each new post goes viral asserting these brands make their products in China to save money, consumers are rethinking buying direct from Chinese manufacturers.
This change would be particularly disruptive for the luxury segment. Consumers are balancing cost with perceived authenticity like never before. The promise of better prices and available inventory is driving some of these shoppers to abdicate responsibility for quality and brand credibility.
