In recent months, viral videos on social media have revealed what many had already suspected: a significant portion of luxury brand products are manufactured through outsourcing, often in countries with more favorable labor laws and lower production costs.
These products, now caught in broader geopolitical power struggles involving international tariffs in a sensitive scenario, have had their production details disclosed by local manufacturers. They have questioned the added value attributed to luxury brands, exposed local production lines, and raised concerns about the benefits of indirect versus direct purchasing, which generates legal and commercial implications.
Although regulations involving luxury goods may allow products to be labeled as manufactured in a specific country based on a minimum percentage of local production, the sale of luxury items does not necessarily serve only a commercial or profit-driven purpose.
When purchasing luxury goods, we are not just acquiring quality materials or craftsmanship. It’s not just Hermès leather, for instance, that gives their products such high market value. By purchasing these items, we are embracing a certain status, showcasing particular quality or financial achievement, or simply gaining access to a product that, initially, has an enormous waiting list.
However, what seems to have sparked buzz on social media is not only the outsourcing of luxury goods production—which is expected by more informed consumers—but the disconnection between reality and the image brands have promoted: one of artisanal, unique, and meticulous craftsmanship, as opposed to the mass production typical of fast fashion items like those from Zara.
Despite the gap between consumer expectations set by luxury brands and the reality of part of their production, the truth is that luxury brands distinguish themselves not only by the quality of the materials used and the specialization of labor (even if at lower cost due to outsourcing), but also through stringent quality control, specialized services, superior finishes, and the symbolic and intangible value attached to the brand, along with everything that associates with it, such as the personalized shopping experience.
In fact, many luxury fashion items, such as watches, handbags, shoes, and eyewear, are viewed as true financial investments. Depending on their condition and whether they are actually resold, they can outperform the return on investment (ROI) of even the most efficient and renowned financial funds.
In addition to the aforementioned attributes, verified provenance through invoices and official certificates is essential for valuing items in the case of future resale. This is where direct purchases, even if sourced from the same outsourced manufacturer, reveal their vulnerability. In addition to undermining a structured and specialized production chain, such acquisitions may constitute violations of intellectual property rights—including trademarks, industrial designs, trade dress, and trade secrets—and breach exclusivity and distribution agreements established between brands and their partners. Therefore, this is not just a commercial issue but one with significant legal consequences.
For companies that manufacture or outsource production outside their home countries, understanding the local market is as important as registering their assets. The lack of an adequate protection strategy can create an opportunity for third parties—including former partners—to preemptively register trademarks, industrial designs, or packaging as their own.
This highlights the importance of structured international protection of intellectual property assets from the outset of operations. Specialized legal counsel—especially during the internationalization process—is crucial for identifying risks, building a defensive strategy, and ensuring the legal security necessary for the company’s international expansion to be solid, enduring, and aligned with the global reputation the brand seeks to maintain.
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