CHINA: In an intriguing shift in consumer behaviour, China’s economic downturn has sparked a surge in the popularity of dupes, with searches for these affordable alternatives tripling between 2022 and 2024.
This trend, highlighted by Laurel Gu, a Shanghai-based director at market research firm Mintel, reflects a significant change in the shopping habits of Chinese consumers, once the world’s top luxury spenders.
The allure of dupes lies in their significantly lower prices than branded products.
For instance, while a pair of Lululemon’s Align yoga pants retail for 750 yuan ($106) on its official Chinese website, similar leggings can be found on popular e-commerce sites like Tmall for as little as $5, with sellers claiming comparable quality.
This growing preference for dupes impacts high-end fashion brands and luxury giants like Louis Vuitton. The parent company LVMH reported a 10% drop in sales for its Asia region (excluding Japan) in the first half of this year, a market dominated by China.
In response to the economic slowdown, China’s central bank has introduced new measures to stimulate growth, including cutting interest rates and reducing the reserve requirement for banks, aiming to boost lending and revive the economy.
The measures have been met with a positive response, with stock markets in Hong Kong and mainland China rallying, with the Hang Seng index and the Shanghai Composite each closing 4% higher.
The CNN report further details a broader lifestyle change, with consumers cutting back on luxury goods, expensive skincare, and dining out. Instead, there’s a notable increase in cooking at home, with many preparing their meals at least four days a week.
This shift underscores a new frugality among Chinese consumers, adapting to the economic challenges by embracing more affordable options and re-evaluating their spending habits.
Dupe economy’s impacts on traditional luxury brands
The rise of the ‘dupe economy’ in China has significant implications for traditional luxury brands in the short and long term.
In the short term, luxury brands are experiencing a noticeable decline in sales. The market research firm Mintel reported that searches for dupes have tripled between 2022 and 2024, indicating a substantial shift in consumer behaviour.
This trend is not limited to a single brand or product category; it spans fashion, accessories, and even high-end electronics.
For instance, LVMH, the luxury conglomerate, reported a 10% drop in sales in Asia (excluding Japan) in the first half of 2023 compared to the previous year. This decline is attributed mainly to Chinese consumers’ growing preference for dupes.
The impact of the dupe economy extends beyond immediate sales figures. Luxury brands are also grappling with the erosion of their brand value and exclusivity. As more consumers opt for dupes, the allure and prestige associated with luxury brands diminish.
This shift could lead to a long-term devaluation of luxury goods, making it harder for brands to command premium prices and maintain their status.
Furthermore, the dupe economy challenges the traditional luxury brand’s business model, which relies heavily on high margins and brand loyalty.
As consumers become more price-sensitive and willing to experiment with dupes, luxury brands must adapt their strategies to remain competitive.
Strategies for luxury brands
To combat this trend, these brands can adopt several strategic approaches:
Enhance Online Presence and Digital Marketing
According to an article published by Fortune, luxury brands should enhance their online presence given the significant growth of e-commerce platforms like Taobao and Tmall.
This includes selling directly through these platforms and engaging with consumers through digital marketing campaigns that highlight their products’ unique value and craftsmanship.
Focus on Exclusivity and Brand Storytelling
Fashion United also suggested that these brands emphasize their products’ exclusivity and unique craftsmanship to maintain their appeal.
Storytelling through marketing campaigns highlighting the heritage and quality of the brand can resonate with consumers who still value luxury as a status symbol.
Adapt to Changing Consumer Values
Recognizing that Chinese consumers are becoming more price-conscious and are seeking better value, luxury brands can adapt by offering more accessible products or services.
This could include creating more affordable product lines that maintain the brand’s quality and design standards.
Engage with Influencers and Social Media
An article on Medium stated that given the influence of social media and influencers in promoting dupes, luxury brands should also leverage these platforms to promote their products.
Collaborations with influencers who can authentically showcase the brand’s products can help reach a wider audience and combat the dupe economy’s appeal.
Innovate and Diversify Product Offerings
Luxury brands should consider diversifying their product offerings to stay relevant and competitive. This could include introducing new product lines that cater to the evolving tastes and preferences of younger consumers, who are more likely to be influenced by dupes.
Strengthen Brand Protection and Anti-Counterfeiting Measures
Implementing robust anti-counterfeiting measures and protecting intellectual property rights can help combat the proliferation of dupes. This includes working with e-commerce platforms to remove counterfeit products and educating consumers about the risks of purchasing dupes.
While the aforementioned strategies are doable and promise success, the long-term feat of these strategies remains to be seen. The dupe economy has fundamentally altered the luxury landscape in China, and brands must navigate this new reality carefully.
Those who can adapt and find innovative ways to connect with consumers may weather the storm, but others may struggle to maintain their market position.