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2012 Cambridge Business & Economics Conference ISBN : 9780974211428

Motivations of Luxury Brand Consumption: A Comparison between

China and Hong Kong Chinese Consumers

So Lai Man, Stella

The Chinese University of Hong Kong

Introduction

As a result of the growing importance of luxury markets (McKinsey & Co. 1990,

2011) over the last two decades, the marketing literature has recently given tremendous

attention in the study of luxury brands. However, little is known on the understanding of

the value of luxury and how to best market to the consumers of luxury brands. The

recent emergence of luxury brand market leads to a new era of luxury consumption

marked by a shift in the dominant consumers moving away from the western countries to

Asian countries, such as China. In China market, we can also see a shift from the

traditional Chinese culture of luxury consumption to a new way of luxury consumption

pattern.

Women luxury brand market is increasingly receiving attention as it represents a

large proportion of luxury consumption in China (McKinsey 2011). In China, women’s

role is no longer restricted to their domestic influence. Their influence in the consumer

market is increasingly being felt. The root cause is of course their changing economic and

social role which has evolved extremely rapidly since the 1980s. They acquired a higher

profile, greater demands and increased expectations in the process. Therefore, marketers

are beginning to be aware of the size of this market and to re-evaluate their marketing

strategies in order to position their products/services for this market more efficiently (Sin,

June 27-28, 2012Cambridge, UK 1


So, Yau and Kwong 2001). As for the luxury consumption, marketers who get their

marketing strategy right can serve a slice of an increasingly lucrative sector of the

market. In views of the importance and the emergence of this market, this study aims to

investigate and examine the concept of luxury brand and how Chinese consumer market

value luxury. This study aims to develop a literature review on academic research work

of luxury branding since the year of 1834 (John Rae). In addition, this research also will

explore Chinese women’s attitudes toward luxury brand and their shifting behavior.

Further, this study will also attempt to measure the cross-cultural differences between two

regions of Chinese women: mainland women and Hong Kong women.

Overview of Previous Research on the Value of Luxury Brands

The topic of luxury is not completely new. As for the academic interests in the

concept of luxury, early research on this topic has started from the work of John Rae

(1834), Thorstein Veblen (1899) and Keasbey (1903) and their works have laid down the

foundations of luxury brand consumption. In those days, luxury was the visible result to

fulfill men’s need for some form of social stratification. In view of the recent tremendous

growth of research interest in the field of luxury brand consumption, various aspects of

luxury consumption have been addressed, including status and conspicuous consumption

(Mason, 2001; Shipman , 2004; Trigg, 2001; Truong, Simmons McColl and Kitchen

2008); Value of luxury, brand’s construct and measurement issues ( Dubois & Paternault,

1995; Luxury Institute, 2005; Vigneron & Johnson, 1999, 2004;Wiedmann, Hennigs and

Siebels 2009) and cross-cultural perspectives on motivations for luxury consumption

( Dubois, Czellar & Laurent 2005; Tidwell & Dubois , 1994; Wong & Ahuvia 1998).



Today luxury is everywhere and everyone wants his products to be luxury which

attract consumptions and leads to profits. To be able to market luxury well, we need to

first define what luxury is all about. Why people are willing to spend more for the

luxury? However, it is not easy to understand the meaning of luxury. The term “luxury”

is subjective that it does not elicit a clear and objective meaning. It takes different forms

for many different people and is dependent on the mood and experience of the consumer

(Wiedmann, Henngs and Siebels 2009). In economic terms, luxury objects are those

price/quality relationship is the highest of the market. In other words, luxury brands can

be described by the nature of high price and rarity. According to Kapferer and Bastien

(2009), luxury is a social maker which leads to a need of brands - “the DNA of luxury is

the symbolic desire to belong to a superior class”. Bagwell and Bernheim (1996) further

suggested that consuming luxury brands is a means to achieve higher social status rather

than for physiological utility and practical use. This implying that people is seeking for

social status recognition through consumption of luxury.

Branding is an abstract concept, therefore marketers need to understand

consumer’s perception towards brands and how consumers value them in order to

implement successful brand building strategy. It is generally agreed that ‘prestige’ is a

benchmark to measure the component of luxury brand. Past studies stressed that the

‘prestige’ in a brand consists of perceived hedonic conspicuous value or identity,

perceived unique value, perceived social value, perceived hedonic value, perceived

quality value and high awareness level (Vigneron and Johnon 1999; Biel 1992). Although

it seems that the foundamental motives for acquiring luxury brands were traditionally

regarded as “buying to impress others” or based on the inter-personal aspects (Berry



1994; Leibenstein, 1950; Mason, 1992), many research studies suggest that luxury also

has a strong personal and hedonic component. In the study of Wiedmann, Henngs and

Siebels (2009), they pointed out that there are other aspects of motives for luxury

consumption. Hedonism and perfectionism or buying luxury to “please oneself” (Dubois

& Laurent, 1994), and situational conditions (e.g. economic, societal, and political

factors) must also be considered (Vigneron & Johnson, 1999, 2004).

A summary of literature on luxury perception scales and measurement across five

studies (Table 1) demonstrated that based on the two major dimensions of luxury

perceptions, “inter-personal orientation” and “personal orientation”, related scales and

measures (Vigneron & Johnson 2004; Kapferer, 1998; Dubois, Laurent & Czellar

2001;Wiedmann, Henngs and Siebels 2009; Wang, Sun and Song, 2010) have been

developed to predict the factors describing luxury brands.

Table 1 Measuring perceptions of luxury brand: review of factors describing luxury brands across five studies

Vigneron & Johnson

(1999, 2004)Kapferer (1998) Dubois, Laurent &

Czellar (2001)

Wiedman, Hennigs &

Siebels(2009)

Wang, Sun, Song(2010)

Inter-personal-orientated perceptions

Conspicuousness

Elitist Extremely

expensive Its price

Conspicuous Elitist Very high

price Differentiate

from others

Materialistic Prestige

Value in Social Networks

Other People’s Impression

Feel Successful Increase Self-

Confidence I want other

people to know that I own expensive luxuries

Uniqueness

Exclusiveness

Its uniqueness

Scarcity Uniqueness

Uniqueness Usable __



Quality

Craftsman Best quality Beauty of

object Excellence

of products

Not mass-produced

Rather like luxury

Excellent quality

Good taste

Quality

Made of Good Materials

High Quality & Worth the Money

Personal-orientated- perceptions

Hedonism

Its great creativity

Its sensuality Its magic

Pleasure Aesthetics and

polysensuality Makes life

beautiful

Self-Identity Self-Gift

Giving Extravaganc

e Life

Enrichment

Exciting Experience

Feel Different When I am

depressed, I buy luxuries to make feel better

Extended- self Successful

Refined people

Reveal who you are

Pleasing Few people

own

Self-Directed Pleasure

Better Service

China’s Luxury Consumption Culture

Chinese culture has played an important role in the consumption of luxury brands.

Traditionally, Confucius’ face concept explains why Chinese consumers value luxury

brands which they believe will bring respects and prestige. China is regarded as a

collectivistic that ‘we-identity’ symbolizes success and wealth (Hofstede 1991; Triandis

1998). ‘Face’ or ‘Mianzi’ is the important concern in a Chinese society which refers to

the social status of a person. Comparing with the American consumers, Chinese are

more influenced by face and peer group (Li and Su 2006). Their consumption is

regarded more as a tool to serve higher-order social needs. It is also argued that face

consciousness relate to product consumption, especially for the high prestige branded

products that would bring face to the consumer (Tse, 1996). This can explain the reasons



of high demand of Louis Vuitton bags and Gucci bags among Asian consumers (Strategic

Direction 2005). Therefore, the Confucian values, such as respect for authority and

desire for harmony explains why people are buying luxury to maintain social position and

prestige (Phau and Prendergast, 2000).

Hong Kong has been a British colony until 1997 has been influenced by the western

culture for many years which can be reflected in their behavior and attitudes toward

consumption of luxury. Research discovered that Hong Kong tops the world of luxury as

most people claiming to buy luxurious brands such as LV, Gucci and Burberry (Nielsen

March 17, 2008). It was argued that luxury brands in China represent middle-class

aspirations, so brands cannot be too hidden. On the contrary, the concept of “brand

prominence” was studied and observed that prominent brands work better among certain

segments (Han, Y. J.; Nunes, J. C. and Dreze, X. 2010). Therefore, a lot of products

bearing visible logos are the best sellers in China (The Standard January 03, 2007).

In recent years, China is becoming the world’s top luxury market. McKinsey’s latest

report on Luxury consumption in China (2011), “Understanding China’s Love for

Luxury” has forecasted that China will comprise 20 percent of global luxury sales by

2015. The report further pointed out that, contrary to popular belief, a growing number

of Chinese luxury consumers are exhibiting a noticeable trend away from overt displays

of wealth and moving towards more understated forms of luxury consumption.

McKinsey further classify the Chinese luxury consumers in four categories: 1. Core

luxury buyers, 2. Luxury role models, 3. Fashion fanatics and 4. Middle-class aspirants.

In general, people are not homogeneous in their motives in buying luxury brands. Some

might buy for impressing other while others are buying to achieve self-satisfaction.



From a cultural prospective, Chadha and Husband (2006) has studied the spread of

luxury culture in Asian countries and discovered a five- stage process classification. It

varies from “subjugation” to “way of life”. China is situated at the stage of “show off”

that people are tripping over each other trying to acquire the symbols of wealth and

displaying them in the most conspicuous manner. On the other hand, Hong Kong is

classified as in the stage of “way of life” that people are confident and feel perfectly

normal to purchase luxury brands. Shopping is the way of life in Hong Kong, it is as

natural as eating, drinking, sleeping and breathing. Hong Kong people in this shopping

paradise tend to buy more expensive items comparing with other Asians (Chadha and

Husband 2006). These two groups of Chinese women are having different motivations

in luxury consumption. It is expected that the mainland Chinese would value face or

interpersonal motivation more than the Hong Kong Chinese while the Hong Kong

Chinese are expected to value more on hedonic and self-actualization value (Figure 1).

Mainland China Hong Kong

Figure 1: Luxury Consumption Value of Mainland Chinese versus Hong Kong

Chinese


self-satisfaction

face/status

Face/status

self-

satisfaction


Hypotheses:

Hypothesis 1: China mainland female consumers rate higher on “Face/ Status” Oriented

Values than “Personal/Self Satisfaction” Oriented Value

Hypothesis 2: Hong Kong female consumers rate higher on “Personal/Self-satisfactory”

Oriented Value than “Face/Status” Oriented Value

Hypothesis 3: China mainland female consumers are expected to rate higher on

“Face/Status” Oriented Value than their Hong Kong counterpart.

Hypothesis 4: Hong Kong Female consumers are expected to rate higher on

“Personal/Self-satisfaction” Oriented Value than their China mainland counterpart.

Hypothesis 5: China mainland female consumers who are rated high on “Face/Status”

Oriented Value is expected to have higher purchase of luxury items than Hong Kong

female consumers who are rated high on “Face/Status” Oriented Value

Hypothesis 6: Hong Kong Female consumers who are rated higher on “Personal/Self-

satisfaction” Oriented Value is expected to have higher purchase of luxury items than

female consumers who are rated high on “Personal/Self-satisfaction” Oriented Value



Methodology

A survey study with a well constructed questionnaire was used to collect data regarding

working female on brand values and purchase in both Mainland China and Hong Kong. A

pretest was conducted in the streets of Hong Kong to test the measurements, and some items

were deleted according to the pretest results. Then a modified version was designed

according to the language and appropriate demographic profile for the Mainland

respondents. In Hong Kong, mall-intercept was being used, aiming at working female from

mid-twenties to mid-forties; in the Mainland, questionnaires were distributed to female staff

of both international and local companies, including Coca-cola and Citi-Group. Total

successful sample for mainland China is 84 while 140 for the Hong Kong sample.

The questionnaire was designed to cover ‘brand values’ and ‘real luxury brand

purchase’. For brand values statements, 6-points scale was being used. The statements

can be further classified into “Face/Status” Oriented Values and “Personal/ Self-

satisfactory” Oriented Values (Table 1a and 1b).

As for the luxury brand purchase, respondents were asked to indicate their choice of

brands of handbags when there is “no money concerned” and the brands of their “actual

purchase” in the past. In order to measure the relationships between the brand value

motivations and purchase behaviour of luxury brands. It is expected that different

perceived brand values will influence the consumption preference and behaviour. Hence,

it is decided to examine three brands to represent luxury in the questionnaire “Louis

Vuitton”, “Gucci” and “Prada”.



Table 1a: Brand Values Statements of “Face/Status” Orientations

We should only buy “luxury brands” that can reflect our self-Identity

We should consider the brand popularity when we purchased.

When buying gifts, we should purchase “luxury brands”.

It is insulting for both gift givers and receivers if it is “cheap”brand.

Table 1b: Brand Values Statements of “Self-satisfaction” Orientations

Results

Hypothesis One and Two

Table 2 and Table 3 show the t- test results of the brand values motivations between

the two sets of samples: mainland Chinese and Hong Kong Chinese. These tests have

employed the group means of brand value statements in Table 1a and 1b in order to give a

general directions and implications on the brand value typology. Paired Sample Mean Test

was used to measure the significant difference between the two typologies of motivations


Using “famous brands” would make me feel different from others.

Using “famous brands” would make me feel superior.

Using“ famous brands” would make me feel respected

Feel happy when recognized by others on the brands we purchased.

We do not have to consider others views towards the brands that we purchased.

We feel happy when sales person treated us as VIP.


(Face/ Status versus Self-satisfaction oriented) in China and Hong Kong. Table 2

demonstrates that there is a significantly higher mean score for the Face/Status Oriented

(Mean: 4.21) than the mean score of “Self-satisfaction Oriented” (Mean: 3.95) in China. As

for the Hong Kong female consumers, there is no significant difference (p-value 0.65)

between the two typologies of “Face/Status” and “Self-satisfaction” oriented brand values.

Therefore, Hypothesis One can be supported while Hypothesis Two cannot be supported. In

other words, the model proposed in Figure 1 is only partially correct.

Hypothesis Three and Four

As for the comparison between the Mainland China and Hong Kong, Independent

Sample Mean Test was employed to measure the significant differences between samples of

mainland China and Hong Kong (Table3). Levene’s Test for Equality Variances was used to

determine the significant differences between the two sets of samples. If the sig. of the

Levene’s test is < 0.05, we check the "Equal variances not assumed", while if the sig. of the

Levene’s test is > 0.05, we check the "Equal variances assumed". It can be observed that

there is significant difference between Hong Kong and Mainland China in terms of the

females’ “Face/Status Oriented Brand Value” (p-value 0.000) while there is less significant

difference between the two places in their “Self-satisfaction Oriented Brand Value” (p-value

0.025). Hence, Hypothesis Three can be supported while Hypothesis Four cannot be

supported.

Hypothesis Five and Six

It is expected that China mainland female consumers who are rated high on



“Face/Status” Oriented Value will purchase more luxury items than its counterparts in

Hong Kong. Among those rated as “Face/Status” female group, there is significant

difference in luxury purchase between Mainland China (19.3%) and Hong Kong females

(44.8%), (Z-value 3.020527**). Significantly larger number of Hong Kong females who

fall into the “Face/Status” Oriented Group purchase luxury items than the Chinese

“Face/Status” Group. On the other hand, among those females (both China and Hong

Kong) who are rated high in “Self-satisfaction” value, Hong Kong females tend purchase

more luxury items (42.7%) than its counterpart in the mainland (11.1%). The Proportion

Test also indicates a significant difference between the two samples (Z-value 3.06778**).

Therefore, Hypothesis Five cannot be supported while Hypothesis Six can be supported.

The results indicate that Hong Kong people tend to purchase more luxury handbags than

its counterparts in mainland China despite their value orientations.

Implications and Conclusions

The results of this study are consistent with five-stage process classification

relating to the cultural development of Asian countries (Chadha and Husband 2006).

China was regarded as in the stage of “show off” that people are keen in buying luxury

products as a symbol of wealth while Hong Kong market is in the stage of “way of life”

that people are confident and feel normal to purchase luxury. The findings also observed

that mainland females tend to value “Face/status” significantly higher than “Self-

satisfaction” while the Hong Kong females tend to value the two similarly.

Comparing with its counterparts in the Mainland China, the Hong Kong females

are less motivated by “Face/Status” oriented value; however, they are not placing high



value on the “Self-satisfaction” oriented value either. In other words, the Hong Kong

females tend to have moved away from the “show off” stage while not really in the “way

of life” stage yet. It is also natural to discover that the mainland Chinese females are

valuing the “Face/Status” oriented value far higher than the Hong Kong females.

As for their consumption for luxury items, it is interesting to discover that the

face- concerned Hong Kong females purchase more luxury items than the face-concerned

mainland Chinese females. One way to explain that could be the economic reason in the

two markets. Although mainland females are very much like the luxury brand, their

actual buying power might be not as high as the Hong Kong females. This can be

reflected in Table 6 that Hong Kong females are higher in proportion for purchase if they

like the brand than the mainland Chinese females.

In conclusion, the two groups of Chinese women are still having different

motivation values in luxury consumption. Hong Kong females tend to be moving toward

the higher level of consumption value that purchase of luxury is not just for “impressing

other” but more for their own self-satisfaction. As expected, luxury consumption is

regarded as a sign of wealth and status to the mainland Chinese. However, as a general

progress, it is believed that in the near future the mainland consumption value will

undergo a process of change toward the value of self-satisfaction and as a “way of life”.

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Table 2: T-test results on the differences between the two typologies of Motivations

(Face/Status Oriented and Self-satisfaction Oriented) in China and Hong Kong

China Mean P-Value

China(Face/status Oriented)

China(Self-satisfaction Oriented)

4.21

3.95

0.005 **

Hong Kong

Hong Kong(Face/Status Oriented)

Hong Kong(Self-satisfaction Oriented)

3.66

3.55

.065

Sample size in China = 84Sample size in Hong Kong = 140Significant at 0.05 levels* P-value < 0.05



** P-value < 0.01*** P-value < 0.001

Table 3: T-test results on differences between China and Hong Kong on Face Oriented and Self- satisfaction Oriented Brand Value

Face/Status Oriented Value Mean P-Value

China

Hong Kong

4.21

3.66

.000 ***

Self-satisfaction Oriented Value

China

Hong Kong

3.95

3.55

.025*

If the significant of the Levene’s test is < 0.05, we check the “Equal variances not assumed” while if the significant of the Levene’s test is > 0.05, check the “Equal variance assumed”Sample size in China = 84Sample size in Hong Kong = 140Significant at 0.05 levels* P-value < 0.05** P-value < 0.01*** P-value < 0.001

Table 4: Brand Preference and Brand purchase of luxury handbags (Mainland China versus Hong Kong Females)

China HK

fraction percentage fraction percentage

Face /Status Oriented Group

Brand preference only

(with no money concern)

=42/57 73.6% =49/58 84.5%

Purchase =11/57 19.3% =26/58 44.8%

Self-satisfaction Oriented Group



Brand preference only

(with no money concern)

=21/27 77.8% =75/82 91.5%

Purchase =3/27 11.1% =35/82 42.7%

Table 5: T-test results on the differences between Mainland China and Hong Kong on Luxury Brand Purchase (Face/Status Oriented Value Group versus Personal /Self-satisfaction Oriented Value Group)

Face/Status Oriented Value Group Z-value Conclusion

Brand Preference (with no money concern) comparing

China(73.6%) vs Hong Kong(84.5%)

1.216894 p2>p1

In Purchase, comparing China (19.3%) vs Hong

Kong(44.8%)

3.020527** p2>p1

Self-satisfaction Oriented Value Group

Brand Preference (with no money concern) comparing China

(77.8%) vs Hong Kong (91.5%)

1.311286 p2=p1

In Purchase, comparing China (11.1%) vs Hong Kong

(42.7%)

3.06778** p2>p1

Hypothesis TestingNull Hypothesis: p1=p2 vs Alternative Hypothesis: p2>p1

Rejection Rule: reject Null Hypothesis if Z > Z0.95=1.645Number of * = degree of significant where Z-value is more far away from the rejection Region

Table 6: The actual purchase of luxury brands for those who like the brands (Hong Kong versus mainland China) Proportion = Purchase/No Money Concerned

Z-value Conclusion

Face/Status Oriented Value Group

China (26.2%) 2.508592** p2>p1



HK (53.1%)

Self-satisfaction Oriented Value Group

China (14.3%)

HK (46.7%)

3.348637** p2>p1


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