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April 21, 2025
Is ‘FactoryTok’ Exerting Real Pressure on Luxury Brands?
If you’ve been doomscrolling through TikTok over the past month or so, you may have encountered the now-viral videos of behind-the-scenes looks at various Chinese factory processes.
According to Forbes contributor Zoe Bayliss Wong, so-called “FactoryTok” videos are all the rage right now, offering a voyeuristic look behind the curtain of modern luxury retail — from its glossy storefronts to its far less glamorous origins and production processes.
“One viral video shows a manufacturer walking viewers through the process of producing a handbag sold for over $300 and revealing that the actual production cost was under $15. In another clip, a user showcases shoes for a major western footwear brand, outlining the costs to make totalling less than 10% of the final selling price. Many of these FactoryTok videos have since been removed, but not before amassing millions of views,” Wong wrote.
“But this trend isn’t just about the social media shock factor and tariff retaliation. It’s about transparency. It’s about holding the fashion industry accountable for not just what it makes, but how and why it makes it,” she added.
Gen Z Eyes a Return to ‘Quiet Luxury’ as FactoryTok Pulls Back the Curtain
Writing for MensXP, editor Prakriti Bhat detailed a similar circumstance in which she was subjected to an innumerable number of reels featuring FactoryTok content, noting that these videos from Chinese producers may have actually undermined the previously unassailable cultural cache of modern luxury brands.
“Funnily enough, in this clash between two economic giants, it’s not American or Chinese brands that are taking the hit. It’s the European luxury houses like Prada, Gucci, Hermes, Louis Vuitton and others. The very ones who built their empires on heritage, mystique, and the silent assumption that the only people making their bags are Italian artisans,” Bhat wrote.
Bhat suggested that with most of the tailoring common to these high-priced handbags and apparel items being shared between mass-produced Chinese labor pools, the once-outsized appeal of the designer label itself may have taken a substantial hit to its popularity.
The solution? According to Bhat, “quiet luxury,” which is particularly relevant for members of Gen Z, who are most likely to spend more time on TikTok and similar platforms.
“That’s where quiet luxury steps in. Minimal branding, impeccable tailoring. Instead of splashing logos all over their fits, Gen Z is now eyeing brands like The Row, Loro Piana, Toteme, Khaite, and Bottega Veneta (the pre-pouch, non-flashy era). Even COS is having a quiet-luxury-on-a-budget moment. The vibe? Rich aunt energy without the need to flaunt a trust fund,” Bhat began.
“In a world where your designer bag has probably had a layover in Guangzhou, a no-logo, perfectly stitched leather tote suddenly feels more luxurious than a bag with three gold letters stamped on it,” she continued.
Hermès Chugs Along as LVMH Shows Signs of Distress, Yet Transparency Remains Key
But not all brands seem to be taking losses in luxury retail, with Hermès recently posting a significant global revenue beat while competitor LVMH — famous for its Louis Vuitton label — saw a recent revenue decline of 3%.
And while Wong pointed toward ESG principles (particularly sustainability practices) and transparency as foundational cornerstones of the contemporary luxury retail market, it appears that other factors are playing a part as well.
Fashion Dive indicated that the broader luxury retail market had slowed in 2024 and that the future of said market rested upon brands moving into “future growth through volume increases rather than price increases in 2025.” Transparency, however, was reiterated, with the outlet citing McKinsey data for reference.
“Overall, luxury customers indicated that they felt their in-store experiences had worsened in recent years and that they wanted to see ‘greater transparency in luxury brands’ sourcing and production,’” Fashion Dive senior editor Lara Ewen wrote.
According to McKinsey, the industry is shifting “away from brand heritage and towards the individual vision of creative directors” — a trend that could have long-term implications for brand identity and performance.
As Gen Z matures and takes on greater spending power in the luxury space, the segment may see a shift toward personalization and a more artisanal, individualized aesthetic, with quality and transparency taking center stage.
Discussion Questions
Are, or will, videos revealing the process behind Chinese-made luxury goods harm sales and damage brand reputation with U.S. consumers? How accurate are these videos, and what motivations do the video producers have in making them go viral?
Although “Factory TikTok” or “FactoryTok” has been a thing for years now, have tariff concerns or a pending trade war escalated this sort of content?
What differentiators are separating successful luxury brands like Hermès from those seeing deeper struggles? Will Gen Z actually commit to quiet luxury and forgo traditional labels?
Poll
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Cathy Hotka
Principal, Cathy Hotka & Associates
Paula Rosenblum
Co-founder, RSR Research
Georganne Bender
Principal, KIZER & BENDER Speaking
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A lot of the videos on TikTok are nonsense; indeed, the same person who appears in one for handbags then appears in another for a different product. Most of it is clearly blatant propaganda, which is a consequence of the escalating trade war. The problem is that not everyone will know this, and it does also shine a light on the value of luxury. That said, luxury products have always been margin-rich. People are not just paying for the actual product; they’re buying into the brand, the status it confers on them, and how it makes them feel. They are also buying into the whole experience, including visiting stores. The value is intangible and a little nebulous, so the videos don’t completely undermine luxury. The bigger problem is if the market becomes flooded with dupes from China.
The visiting stores part isn’t as fun as it used to be. I always stop in the designer stores at Caesars Forum Shops and the customer service you’d expect isn’t happening. Some of these retailers even make customers stand outside in a line like they are waiting to board a ride at Disneyland. I remember a salesman at Hermes Bellagio tell me he doesn’t judge shoppers because his next best customer might be a guy in a tank top and flip-flops.
This is what it is and has always been. “People are not just paying for the actual product; they’re buying into the brand, the status it confers on them.”
Any of the contractors featured in these videos are likely to find themselves crossed out of consideration come the next review. Watched a YouTube walking video of the Ginza storefronts from a couple days ago – of course the price of the bag helps pay all that rent and architecture cost!
A luxury brand may respond by increasing transparency about its manufacturing processes in order to assure its consumers of its quality and ethical standards. Additionally, they may launch marketing campaigns emphasizing their commitment to craftsmanship and sustainability.
Additionally, brands may be able to speak directly with consumers via social media in order to address concerns and counter any misinformation that the videos may have spread.
A social media platform such as TikTok plays an important role in shaping brand-consumer interactions by providing a platform for direct engagement and dialogue. By sharing behind-the-scenes content, they allow brands to address consumer concerns quickly and foster a sense of transparency and trust.
By keeping their audiences informed and engaged, social media becomes an essential tool for brands to navigate challenges such as trade tensions.
As a result of trade tensions, luxury brands can be negatively affected by disruptions in supply chains and an increase in production costs.
There is also the potential for tensions between these countries to lead to tariffs that may increase the price of luxury goods, thereby reducing their demand. In order to maintain consumer loyalty, brands must explore alternative sources of sourcing and reinforce their brand value.
TikTok videos won’t influence luxury buyers…but they do make me feel better about buying knockoffs from Payless.
Perfect
Are buyers of luxury goods known for altruism? That they’d be suprised they’re paying almost everyting for the name – and nothing for actual product – suggests they shouldn’t be known for brightness either.
I doubt those TikTok videos will hurt handmade brands like Hermes much, but they sure have made Canal Street look legit. Anyone who pays thousands of dollars for a PVC coated canvas Louis Vuitton or Goyard bag is crazy. At least in my book.
Anyone who watches SharkTank is aware how much profit there is in so much of what’s sold. But even if you don’t….
Luxury goods are simply sold at too many doors. There’s the wholesale side, and then there’s the retail side. Nordstrom is finding out that you can over-grow your market. We won’t even begin a discussion of Michael Kors. I have been scratching my head for years over the paradox of luxury and ubiquity living in a single product. I never understood it, so I’m not surprised some of these brands are just undersold.
Sometimes I feel like a broken record. I keep repeating the same things…but they remain truths. Luxury implies scarcity. We have none of that. And as long as there is no scarcity anyway, might as well buy a knock off.
Luxury is perception, even though most of the Chinese content are peddling copycats, note the vocabulary that implies but does not claim they are contractors of the luxury good sans label. Seasoned Luxury buyers will not be influenced by these videos, content makers will be keeping this knockoff conversation around for a while though and dilute the brand.