Counterfeits and copycat designs have always been prevalent in the luxury market, but a booming dupes trend is making it harder for luxury houses to justify sky-high prices. Coupled with a decrease in consumer spending power, could this be a tipping point?   

The counterfeits now coming to market bring a sophistication and quality not previously seen. While this signals a continuing desire for premium products, it also serves (in varying degrees) to degrade exclusivity, diminish perceived value and, potentially steal customers.  

Counterfeit, fake or dupe: understanding the difference  

Low-level counterfeits (or fakes) are the cheap items you see on market stalls. Their affordability and accessibility have a negative impact on brand image – as seen with the Burberry fakes trend in the early 2000s. These cheap copies detract from exclusivity and the association with ‘luxury’. 

High-level counterfeits are almost indistinguishable from branded items in terms of design and quality. And when the secret gets spilled that ‘high price doesn’t always mean high quality’ like the $50 Dior bag scandal, customers start to question why they should bother buying the real deal. Counterfeits of this quality steal existing customers who want to buy from the brand but can no longer justify the high price or super exclusionary nature of the genuine item.  

Dupes are increasingly becoming higher quality items similar to the original design but not exact replicas. What started as a cheap alternative trend on TikTok has led to the emergence of ‘dupe brands’ that market themselves as being ‘the same but cheaper’ – such as Noted Aromas, which sells ‘designer-inspired’ fragrances for a fraction of the price.  We also saw this with the popularity of lab-grown diamonds post Covid, when the price of mined diamonds was at an all-time high. The huge demand for more affordable gemstones (plus changing consumer preferences) significantly impacted the natural diamond market. 

The normalisation of the fake 

Just two years ago, carrying or wearing a fake was not something to brag about. Thanks (in part) to TikTok influencers normalising the purchase of cheaper alternatives, we’ve seen a huge shift in consumer behaviours. With luxury items becoming more expensive and more unattainable, are consumers growing tired of an outdated luxury narrative?  

The chaos of the ongoing tariff war has added further fuel to the fire, with China now “exposing” that many luxury brands manufacture their goods there, claims which, if true, could push more consumers toward dupes or counterfeits. However, several luxury brands have publicly denied these claims – a spokesperson from athleisure brand Lululemon stated that they manufacture approximately 3% of their finished goods in China. Whether this is a calculated move by counterfeit markets to discredit brand integrity or simply misinformation, the impact on consumer trust is real.

The significant decrease in spending power has certainly rendered luxury items less of a priority. As consumers face increasingly limited purchase options, the dupe or counterfeit is becoming the obvious (and affordable) choice when compared to the second hand market or shopping at outlets. 

What’s more, dupe brands are increasingly establishing themselves as legitimate businesses, even in terms of ESG compliance and expectations, which poses further threat to the luxury market. It’s much harder to prove the designs are stolen and given that they’re neither counterfeits or fakes, customers purchase them without feeling inauthentic or ‘cheap’ – and if the quality is on par and cited as being ethically made, why would customers pay more for the original item?  

Price hikes at the heart of the issue  

Despite the rising cost of raw materials, some brands have pushed prices beyond inflation. Historically, luxury brands have increased prices to increase exclusivity, but is this an outdated pricing strategy that sends out the wrong message (and even fuels the dupes market)? Severe price hikes – beyond what can be explained by macroeconomic influences – signal to market that only those who can afford the products are welcome, but exclusion and exclusivity are not one and the same.  

Pricing strategy is a key consideration – especially when it comes to the aspirational shoppers that luxury brands are seemingly overlooking. Yet this is an important customer base given that aspirational customers typically spend almost $274 billion a year (according to McKinsey). Offering a range of accessible, affordable products is therefore crucial – such as fashion brands selling small leather goods and accessories. It allows brands to build relationships with entry-level shoppers today who might purchase more expensive items tomorrow. It’s a fine balance between building desirability and exclusivity while maintaining aspirational accessibility. 

Reclaim your customers: put them at the heart of your story  

With tariffs in the US impacting the global economy, price increases may continue for the foreseeable future, which will in turn impact consumers’ desire to purchase luxury goods. This means that luxury brands need to work much harder to reclaim and retain their customers. Even if consumer desire for luxury products remains, complacency is no longer an option. While price-conscious consumers are currently seeking value for money, there’s no guarantee that they will return to luxury brands when the economic situation improves – which is why you need to start building stronger brand-customer connections now.  

This is a pivotal moment to understand why customers buy into your brand – to consider the value that your particular brand offers. What does it mean for customers to be associated with you? What makes your products worth the price tag? Why should they care enough to buy from you? Deep audience insight can inform a brand story and strategy that strengthens your offering beyond the products.  

Think of it as building a ‘brand universe’, where each element is there for a reason and all work cohesively together. Your stores, for example, deliver a moment of tangible interaction, a key point to build an emotional connection with your customers, signalling what it feels to be part of your community. Your digital space must align with this to create an authentic online-offline blend.  

And don’t forget your pricing strategy either – are you offering options that pull in entry-level customers? Build those strong relationships now and you build essential loyalty that will serve you well when spending power increases.  

Dupe brands can only go so far with a ‘same but cheaper’ narrative. However, luxury brands will need to be clear on what value their ‘universe’ can offer to customers.  Having a strong and confident understanding of who they are, what they stand for, and why they exist will help in crafting an authentic and differentiating universe – one that will ultimately resonate with their customers, today and tomorrow.