Luxury brand consumption in Asia is not all the same

30 June 2015

Shoppers in different countries consume in different ways

Shoppers in different countries consume in different ways

Researchers have highlighted significant differences in the consumption of luxury brands in China, India and Indonesia, warning that marketers need to differentiate their branding approach rather than treating Asian markets as a homogenous group.

Asian markets are steadily becoming key growth regions for luxury brands. However, despite this growth, researchers suggest that many luxury brand firms are unable to obtain the desired economic returns through their marketing strategies in Asia.

In a new research paper published in the journal Marketing Letters, Glasgow Caledonian University’s (GCU) Professor Paurav Shukla, Dr Jaywant Singh from Kingston University and Dr Madhumita Banerjee from the American University of Sharjah, attempted to decipher the underlying value perceptions that drive luxury consumption among three of the largest Asian economies, China, India and Indonesia.

Professor Shukla said: “Often firms treat consumers across Asian markets as homogenous groups, which could lead to inaccurate luxury brand management strategy. Additionally, there is limited understanding of consumer value perceptions toward luxury brands across the Asian markets. We have seen the same adverts, the same messages and the same communication means employed by luxury brands across Asia to serve these vastly different markets. ”

Using the framework developed by Berthon et al. (2009) who employed Karl Popper’s “three worlds” hypothesis, the team examined the constituent value perceptions among Chinese, Indian and Indonesian consumers, conceptualising luxury brands with three distinct value-based dimensions of symbolic, experiential, and functional.

The team surveyed more than 600 luxury consumers in India, China and Indonesia about their luxury value perceptions.

They found that, in India luxury brand consumers seem to be influenced by what others think of them and therefore consume in a way to influence others in order to achieve societal acceptance and indicate social status.

For Indonesian consumers, the individual seeks to enhance the self through consumption. They will not submit to in-group authority if the consumption choice is distasteful to them. The Indonesian consumers also show significant impact of experiential value on their luxury value perceptions.

Functional value perception has a significant impact on luxury value perceptions among Chinese consumers, researchers suggest.

The researchers claim that, as a result, marketers can benefit from knowledge about the differences (and similarities) in constituent luxury value perceptions and should customise their marketing strategies accordingly.

For instance, a luxury brand positioning strategy in Indonesia could highlight how the brand could enhance a consumer’s self-image and could make them feel good about themselves, as well as focus on the experiential aspects of buying and using the brand. Meanwhile, a luxury brand which wants to establish itself in Indian market will have to work on social acceptability and symbolism of achievement, prestige and wealth. The higher price and social symbolism offers a significant meaning to a luxury brand for Chinese consumers also. 

The paper is available here.