“modern beauty” – seiichi hayashi, 2008
When I first heard about the lipstick theory, I thought it was ridiculous. How on earth could lipstick sales measure the state of the economy? I was convinced that this could be nothing more than an internet myth, made popular by the self-proclaimed “fashion girlies” of today.
Nevertheless, I sought to investigate the origins of this mythical theory and I was shocked to discover that this was nothing new. For years, people have been thoughtlessly cherry-picking fashion trends and labelling them as “recession indicators” — longer hemlines, increased Shein sales, “recession blonde”, and even minimalist or corporate fashion wear (think: “office-siren”, “1 base 4 outfits”).
In fact, more tongue-in-cheek theories beyond fashion have sprung up to indicate a worsening economy such as a resurgence of “recession pop music” a.k.a songs you sang along to in the backseat of your parents’ car in 2008, oblivious to the financial world up in flames.
We’ve all heard the saying ‘fashion is political’, but can we also say the same when it comes to economics?
To better understand this whole debacle, we must first retrace our steps back to the early 2000s recession, when the former CEO of Estée Lauder first observed a surge in lipstick sales as the U.S. economy dipped towards a downturn. His claim implied that consumers would be more willing to indulge in affordable luxury goods in times of economic decline. What this looks like is instead of buying expensive Birkins or designer heels, shoppers might prefer lesser, feel-good splurges like high-end lipstick.
Inspired by Lauder’s comment, some content creators like style.analytics have even decided to test a broader list of indices through statistical analysis. By using individual regressions, her findings show that mini skirts seem to be the most reliable indicator of consumer confidence as compared to maxi skirts, high heels and even lipsticks.
What might be a good example of the lipstick effect at work would be the current global spike in dupe sales in the face of the US-China trade war. As a response to Trump’s retaliatory tariffs and removal of the de minimis loophole, Chinese content creators have taken matters into their own hands to find a workaround. At the time of writing, videos claiming to reveal “luxury’s biggest secret” have gone viral across the Internet. Creators like LunaSourcingChina exposed a list of unverified behind-the-scenes Chinese suppliers of luxury brands like Lululemon, Hermès, Yves Saint Laurent, Victoria’s Secret — basically, your entire Pinterest board. By breaking down material costs and retail prices and introducing direct sourcing routes for consumers, purchasing a replica coat from Tongli Clothing now feels no different to buying it from Zara!
Whether or not these claims are true is up for debate, as brands like Louis Vuitton profusely deny ever manufacturing products in China. Despite the commotion, major Chinese B2B platforms, like DHGate have shot up the charts worldwide, placing #2 on the U.S. Apple Store. Influencer hauls of products from the “little yellow app” or AliExpress have managed to convince the public to “support China, boycott America”. The death of luxury has long been disputed, rife with inflated prices and low-quality goods, but it has never felt more real than now. Coupled with the lipstick theory, there is an emerging perception that the industry is now facing an ever-growing slump.
The lipstick theory is unfortunately not as reliable as the “TikTok theorists” preach. While Lauder originally suggested a correlation between lipstick sales and economic health, it has in fact been discredited several times by multiple economists. For example, when tested against the 2008 recession, or any subsequent recessions, cosmetic sales actually dropped significantly as people reduced their consumption on non-essential goods.
Besides being generally inconsistent, these theories largely ignore other underlying factors such as the magnitude of a recession or the climate crisis which can also impact people’s spending choices. Therefore, it is unlikely that a lipstick index, or even similar indices based on mascara, nail polish, or skirt length, can ever chart recessions accurately. Perhaps, a better alternative is to employ actual behavioural economic models or consumer confidence indices as these are much more firmly rooted in economic principles.
Moreover, these “recession indicators” may point to a misogynistic tendency of disciplining women’s choices and portraying women as irrational consumers, as pointed out by Substack writers thedigitalmeadow and Dana Miranda. This hyperfixation on what women choose to spend their money on perpetuates the idea that women always prioritise material pleasure over basic necessities, even in times of crisis.
On the contrary, studies have revealed that women are in fact more likely to invest more of the household income in education and healthcare for children compared to men. So, why is it that no one bats an eye when mothers scream to criminalise marital rape, but being an outfit repeater suddenly turns heads?
By choosing to hold on to harmful stereotypes, we choose to regress the fight for gender equality. Therefore, we need to be conscious of our beliefs and learn to formulate our own opinions of online trends instead of blindly following the herd.
Instead of treating these “recession indicators” as reliable predictors, perhaps it makes more sense to perceive them as cultural byproducts of an economic downturn. The rise of “recession-core” should be understood as more than a fad, but rather a stark reflection of how people cope when everything feels a little unstable. These choices don’t necessarily signal where the economy is heading, but they do offer glimpses into the behaviours of consumers and producers.
So no, we probably shouldn’t swap out the Phillips Curve for peplum tops anytime soon—but we also shouldn’t underestimate how economic downturns shape the way we express ourselves. If anything, these trends remind us that everything and everyone in economics is interconnected. In Miranda Priestley’s words, “that blue [sweater] represents millions of dollars and countless jobs.”
References:
Wikipedia (n.d.) Lipstick effect. [online] Available at: https://en.wikipedia.org/wiki/Lipstick_effect
The Digital Meadow (2024) Recession indicators: Mrs Consumer. [online] Substack. Available at: https://open.substack.com/pub/thedigitalmeadow/p/recession-indicators-mrs-consumer
Miranda, D. (2024) How women are spending in a shaky economy. [online] Substack. Available at: https://open.substack.com/pub/danamiranda/p/women-spending-recession-economy
The Economist (2009) Lip reading. [online] Available at: https://www.economist.com/business/2009/01/22/lip-reading
Free Malaysia Today (2023) Women deepen economic impact with higher spending power. [online] Available at: https://www.freemalaysiatoday.com/category/business/2023/11/15/women-deepen-economic-impact-with-higher-spending-power
MIT Technology Review (2025) Why Chinese manufacturers are going viral on TikTok. [online] Available at: https://www.technologyreview.com/2025/04/28/1115876/why-chinese-manufacturers-are-going-viral-on-tiktok/amp/
