China, once a seemingly insatiable consumer of luxury goods, is experiencing a change in its relationship with high-end brands. Interest in high-end Western labels like Burberry, Prada, and Louis Vuitton is waning, replaced by a burgeoning interest in ‘pingti’ o domestically produced ‘dupes’ that are replicas that offer comparable quality at a fraction of the price. Economic headwinds, evolving consumer values, and the rise of high-quality dupes are reshaping the luxury market in unexpected ways. This is leaving international brands scrambling to adapt while domestic players and pingti producers seize the opportunity.

The rise of pingti

While concrete figures for the pingti market remain elusive due to its nascent nature, anecdotal evidence and expert opinions point to explosive growth. Social media searches for dupes have tripled from 2022 to 2024, according to Laurel Gu, a market research analyst. This is primarily being driven by factors like the economic slowdown in China.

Table: The rise of pingti

The data paints a clear picture: as economic pressures mount and youth unemployment soars, Chinese consumers, especially Gen Z, are becoming more price-sensitive and discerning. They are actively seeking value and questioning the traditional association of luxury with exorbitant price tags.

And this shift in consumer behavior has dealt a blow to international luxury brands. Burberry reported a 21 per cent year-over-year sales decline in the previous quarter, while Swatch cited a sharp drop in demand in China and Southeast Asia. Even luxury giants like LVMH have experienced a slowdown in growth. 

Table: Luxury brands sales drop

These figures highlight the challenges faced by international brands. Many have resorted to offering discounts and promotions, but even these efforts are proving insufficient to stem the tide. A recent Fortune report revealed that several brands are grappling with high return rates and purchase cancellations.

While international brands struggle, domestic players and pingti producers are capitalizing on the changing landscape. Domestic brands like Chando in skincare are offering comparable products at lower prices, resonating with value-conscious consumers. Pingti producers, meanwhile, are attracting buyers with near-perfect replicas of luxury goods, often using the same suppliers and materials as the original brands.

Emerging trends

Economic slowdown: China's economic downturn is a major factor. Rising unemployment, particularly among young people, and wage stagnation are forcing consumers to reconsider luxury spending.

Luxury shaming: A reluctance to flaunt expensive items in a time of economic uncertainty is contributing to a decline in conspicuous consumption.

Shifting values: Consumers are prioritizing value and functionality over brand names and status symbols. This is due to increased awareness of quality dupes or pingti that offer comparable quality at a fraction of the price.

Rise of domestic brands: Chinese consumers are increasingly supporting homegrown brands that offer high quality and competitive pricing.

E-commerce and social media: Online platforms are facilitating the discovery and purchase of pingti brands, further driving their popularity.

Therefore, the future of the luxury market in China hinges on several factors. Will the economic slowdown persist, further boosting the pingti trend? Will international brands successfully adapt their strategies to cater to the evolving Chinese consumer? Will domestic brands continue to gain market share?

The answers to these questions remain uncertain. However, one thing is clear: the luxury market in China is undergoing a profound transformation. Brands that can understand and respond to the new consumer values of quality, value, and authenticity will be best positioned to succeed in this evolving market.