China’s economy slowdown is not an abstract concept for 23-year-old Zheng Jiewen, who works full-time at an advertising agency in Guangzhou, one of China’s southern megacities. Initially, Zheng’s main source of income came from her work as a print model, earning her a comfortable monthly salary of around 30,000 yuan ($4,230) when she started two years ago. However, last year things started to change. New business at the company she worked for began to dwindle, and as a result, her income took a hit. By February, her salary was reduced by half.
“I was extremely shocked,” she recalled. In response, Zheng quickly cut down her spending to match her reduced earnings. Gone were the days of splurging on Louis Vuitton, Chanel, and Prada—brands that had once been her go-to for fashion. Instead, like many of her peers in China, she turned to more affordable alternatives. The impact of the economic slowdown has been “obvious,” says market experts, with social media searches for “dupes” (high-quality replicas of luxury goods) tripling from 2022 to 2024.
Now, Zheng and her friends spend their more limited funds on these so-called “pingti” products, the Chinese term for dupes. These replicas, which range from near-identical copies to inspired versions with added color or texture options, have become immensely popular. Analysts note that this shift is reflective of a broader trend. Consumer confidence in China has plunged to historic lows, and this has translated into a growing preference for these cheaper alternatives.
According to Laurel Gu, a director at the Shanghai office of Mintel, a global market research firm, the behavior of Chinese consumers has undergone a dramatic shift. Unlike a decade ago, when they were the world’s top luxury spenders, eager to purchase Western luxury brands, today’s consumers are increasingly drawn to affordable alternatives. This shift in consumer behavior, driven by economic pressures, is not a niche trend but rather “the new mainstream,” she explains.
The price difference between branded items and their dupe counterparts can be staggering. Take, for instance, Lululemon’s popular Align yoga pants. While the original leggings are priced at 750 yuan ($106) on the brand’s official Chinese website, similar leggings—many with store names that subtly reference Lululemon—can be found on e-commerce platforms like Tmall for as little as $5. These stores often claim that their products offer comparable quality to the originals.
The surge in demand for dupes is posing a significant challenge for established luxury brands like Louis Vuitton. For instance, sales at LVMH, the luxury powerhouse that owns Louis Vuitton, dropped by 10% in its Asia region (excluding Japan) during the first half of this year. China, which makes up a large share of that market, has been a key driver of this decline.
This trend, fueled by rising demand for affordable knock-offs, is contributing to China’s overall sluggish consumption. Retail sales have consistently fallen below already-low expectations. Weak economic data from the summer has led economists to fear that China might fall short of the 5% growth target set for 2024.
In an effort to reignite growth, China’s central bank introduced new measures to boost the economy. These include cutting its main interest rate and lowering the reserve requirements for banks, freeing up capital for lending. However, despite these efforts, consumer confidence remains in a fragile state. A research note from investment bank Nomura, released in early September, revealed that China’s consumer confidence index dipped to 86.0 in July, down from 86.2 the previous month. The index, which measures confidence on a scale of 0 to 200, has barely budged from its historic low of 85.5, recorded in November 2022, when the country was still grappling with the fallout from the COVID-19 pandemic.
Many consumers, like Zheng, have come to see themselves as fortunate just to have jobs. According to a recent report, China’s unemployment rate among people aged 18 to 24, excluding students, reached 18.8% in August, the highest level recorded since the data started being tracked in January.
Xinxin, an elementary school math teacher from Chongqing, southwestern China, also felt the economic pinch. Previously a loyal fan of Estée Lauder’s Advanced Night Repair serum, Xinxin was forced to switch to more budget-friendly skincare products after experiencing a “brutal” 20% pay cut earlier this year. She blames this reduction on “fiscal issues” within her school district, brought on by broader economic challenges. She managed to find a cheaper alternative to her favorite serum with similar key ingredients, priced at just 100 yuan ($14) for 20 milliliters, compared to Estée Lauder’s 720 yuan ($100) for 30 milliliters. Her reasoning for switching was simple: “Why dupe? Pay cut, of course!” she joked.
Many of China’s economic challenges are rooted in its once-booming real estate sector, which at its peak accounted for as much as 30% of the country’s economic activity. Starting in 2019, this sector began to slow down, eventually collapsing into a deep recession. This crisis has had a profound impact on consumer confidence, as falling real estate prices eroded household wealth. Barclays economists estimate that Chinese households have lost as much as $18 trillion in wealth due to the housing slump. This translates to an average loss of $60,000 per household—a staggering amount considering that it is nearly five times China’s per capita GDP.
The ripple effects of the housing crisis and reduced consumption have prompted several investment banks to revise their growth projections for China, bringing them below the government’s official target. The country’s leaders have responded by shifting their focus toward manufacturing, particularly in the electric vehicle (EV) sector. While China’s strategy of exporting excess capacity to overseas markets has bolstered its EV industry, it has also sparked tensions with global competitors, especially in Europe.
The measures introduced by China’s central bank, including cuts to mortgage rates and down payments for second-time homebuyers, are aimed at boosting domestic demand. However, economists remain cautious, warning that without significant improvements in consumer confidence and spending, China’s economic woes are unlikely to dissipate soon. As consumers like Zheng and Xinxin turn to dupes and cut back on spending, it seems the once unstoppable Chinese luxury market may continue to slow.