Intra and inter-country comparative effects of symbolic motivations on luxury purchase intentions in emerging markets. Issue 1 (February 2021) - Shukla, Paurav
Highlights: Lower-tier cities in emerging markets are new growth engines for luxury but research largely focuses on Tier-1 cities. Using theory of network effects, we compare intra and inter-country differences in China & India for luxury consumption. Significant differences exist within higher - and lower - tier cities that motivate consumers to purchase luxury goods. Chinese consumers in Tier-1 cities are more influenced by snob motivations. However, the effect is reversed in India. Abstract: Emerging markets, and especially lower-tier cities within these markets, are seen as the future growth engines for luxury brands. However, extant literature on the drivers of luxury consumption has predominantly focused on Tier-1 cities. Grounded in the theory of network effects, this study offers first such intra and inter-country comparison of the symbolic motivations (i.e. snob, bandwagon and Veblen motivations) underpinning luxury purchases between and within Tier-1 and lower-tier cities in two prominent emerging markets, China and India. The findings offer first account of similarities and differences in consumer motivations that drive luxury consumption within and between these markets. While most luxury brands have ubiquitous strategies for emerging markets, the results will assist managers in developing distinctive brand strategies catering to the intra and inter-country differences.