A recent JTBC news story revealed that the production cost of a Christian Dior luxury bag, priced at around 3.8 million KRW (approximately $2,850), is only 80,000 KRW (about $60). An Italian court ruling uncovered the exploitation of illegal Chinese immigrants, among others, to produce these bags cheaply and label them as ‘Made in Italy.’

According to Bloomberg and other foreign media reports on June 10, the Milan court in Italy ordered a ‘judicial administration preventive measure’ against Dior SRL, the manufacturing arm of Dior Italia, and appointed a ‘judicial administrator’ to oversee the company for one year. This action is due to allegations that the company allowed and encouraged the exploitation of labor by Chinese subcontractors.

The 34-page court ruling detailed the labor conditions of four subcontractors producing Dior bags. These factories mainly employed illegal immigrants from China and the Philippines. Workers had to sleep in the workshops as the factories operated 24 hours a day without holidays. Safety devices were also removed from machines to speed up production.

The subcontractors, who saved on production costs, sold each bag to Dior for 53 euros (about 79,500 KRW or 60 USD). These bags were then sold in Dior stores for 2,600 euros (approximately 3.85 million KRW or 2,850 USD). The court found Dior’s business unit responsible for not verifying the actual working conditions or technical capabilities of the suppliers and not conducting regular audits.

Italian investigative authorities have examined subcontractors’ labor conditions for luxury goods manufacturers for several years. This is in response to concerns that Chinese-operated ‘low-cost companies’ are damaging Italy’s traditional leather industry, which produces about 50% of the world’s luxury goods.

K-netizens have expressed shock and disappointment over the recent revelations about Christian Dior’s production practices. Netizens commented:

• “The price is just for the brand name.”
• “Oops.”
• “Buying a $60 bag for $2,850 just to boost your self-esteem lololo.”
• “I bet you they were sending those $60 bags to stores in Asia.”
• “The Chinese knock-offs and the real ones are all the same.”
• “This is so crazy.”
• “I wonder if there is real such thing as luxury goods now.”
• “I think people were talking about this before. But the fact it only costs $60 is shocking.”
• “Hul.”
• “Artisans couldn’t have made the bags if they wanted to meet the demand.”
• “I expected that they would make their bags in some factory in Asia for cheap because there’s so much demand.”
• “Wow.”
• “I’m not surprised.”