Abstract
Global brands are benefiting from the rapidly growing demand for luxury products in China. While research interest in the luxury sector in China is developing, there has not been any research on the affordable luxury sector in that market. This manuscript addresses this gap and is the first cross-cultural study that compares Chinese and American millennial consumers’ perceptions and expectations of affordable luxuries in these two markets. Our analysis reveals the differences and similarities in American and Chinese millennial consumers’ perceptions of affordable luxuries in comparison to both luxuries and necessities. The implications of this research for retailers of affordable luxury products are highlighted with respect to the decision of whether to adapt their global positioning strategies.
Highlights
Despite temporary local and international recessions, the demand for luxury goods has been expanding steadily since 1995 (Kapferer & Michaut, 2016) at an annual growth rate estimated between 10% and 15% (Fionda & Moore, 2009)
Taking into consideration the distinguishing cultural facets of Chinese consumers and how these facets influence their behavior towards luxury products compared to American consumers, and following the reasoning that cultural factors affect how cohorts perceive perceptions of luxury goods and services (Hauck & Stanforth, 2007), we propose the following research questions: RQ3: How do Chinese and American millennials associate different product categories with affordable luxury? RQ4: How do perceived product attributes of affordable luxuries differ between Chinese and American millennial consumers? RQ5: How does Chinese millennial consumers’ willingness to pay for affordable luxury compare to that of American millennial consumers?
Except for cologne, we found that these affordable luxury products were generally rated by both Chinese and American consumers, which means that the two groups have similar categorization schemas
Summary
Despite temporary local and international recessions, the demand for luxury goods has been expanding steadily since 1995 (Kapferer & Michaut, 2016) at an annual growth rate estimated between 10% and 15% (Fionda & Moore, 2009). The luxury goods market in the United States, the leading country in luxury good revenue generation, amounts to $65,019 million and is expected to continue growing 4.6% annually until 2025 (Statista, 2020). This growth is fueled by “the younger, multi-ethnic demographic that is more attracted to purchasing designer products online” (NPD, 2019; n.p.). The rapid rise of wealth in emerging markets such as China, Russia, India, and Brazil (BRIC, Atwal & Williams, 2017), coupled with some of the lowest unemployment rates in developed countries in recent history (Financial Times, 2018), has turned the luxury market into one of the fastest-growing industries in the world.
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
