Luxury brands profit by selling Chinese-made goods back to Asian buyers

Evidence

In 2022, after all the streetwear collaborations, LVMH founder Bernard Arnault once again became the world’s richest person—even beating out Elon Musk. The luxury sector found a formula for printing money by extracting incredible margins from low-cost goods. A 2,780 Dior Book Tote cost only 57 to make. The French names and design teams then imbued these goods with almost mystical levels of cachet, masking the reality that many products were made in China and then sold back to Asian customers. But maintaining the image required strategic silence about this fact. Discussing how brands catered to Chinese tastes—or how China’s role in production shaped the industry—remained a quiet taboo. — W. David Marx, Blank Space, 769

Categorization

• QUESTION: The ‘strategic silence’ about production raises the question whether this is a distinct form of sign-value signaling — consumers must not know the physical provenance to sustain the symbolic one.
• ADDENDUM: The 2780-to-57 margin data and the taste-vs-production split could support the immodesty/complaints article’s class-signaling analysis.
• XREF: connects to: Luxury brands profit mainly from cheap entry-luxury goods, not expensive items — Alice E. Marwick, Status Update: Celebrity, Publicity,…, 289