The empirical part of this study aims to identify how social media influences Chinese luxury consumer behavior. To better understand consumer behavior and the psychology that works in their decision-making processes, an exploratory study using 30 recorded semistructured interviews was conducted.

Sample Selection and Characteristics

The researcher chose to interview respondents who are luxury consumers or potential luxury consumers. They were selected based on their residences, ages, and their social media use frequency and their preference toward luxury items.

The targeted respondents are Chinese luxury consumers or potential luxury consumers, most of whom are in the Generation Y and Generation Z demographics. They reside in first-tier Chinese cities (e.g., Beijing or Shanghai), where specialty stores selling international luxury brands are prominently found. Some of the respondents also come from below-the-third-line regions (i.e., below areas in which defense industries were located), where there has been both huge potential market and rapid sales increases. Of the total participants, 70% are female and 30% are male. The younger participants are college students or recently graduated corporate employees. Most of the older participants are married and have children and are businesspersons or employees. All the participants are interested in luxury and have purchased or have the desire to purchase luxury products in the future. The respondents’ ages (i.e., demographic group) are presented in Figure 2.2.

All the respondents are social media users, and some could be considered social media enthusiasts (i.e., those who spend more than seven hours per day on social media). The majority spend at least three hours on social media every day, and almost 60% of the respondents agreed social media influences their consumption decisions to different degrees (see Figure 2.3).

Research Question and Hypotheses

The research question proposed for this study is this: how does social media influence luxury consumer behavior?

The following three propositions are investigated to understand this research question:

Target Demographic

Figure 2.2 Target Demographic.

Hours Per Day Spent on Social Media

Figure 2.3 Hours Per Day Spent on Social Media.

PI. The reputation of a KOL increases consumers’ brand awareness.

P2. Trustworthy UGC helps consumers better evaluate and make purchase selections.

P3. Acquaintances and word of mouth have a positive influence on consumer decision making.

Design of Interview Questions

To understand the respondents’ basic luxury preferences and purchase channels, the first question, What do you feel when you purchase or own luxury products?, intended to uncover the consumer’s psychology related to the luxury features that appeal to them and the experience they hope to get from the luxury purchase. The literature review has shown that Chinese luxury consumers are divided into four types (luxury enthusiasts, luxury followers, luxury wise, and luxury laggards), but the realization of self-worth and social status are regarded as their primary goals. However, individual consumers have their own considerations and characters; therefore, the first question aims to explore to which luxury consumer category the respondents belong.

The literature review showed that the decision-making process can be divided into several classifications: problem recognition, information search, alternatives’ evaluation and selection, outlet selection and purchase, and post-purchase processes. The interview question Will you search or compare information on social media when you select luxury goods? was designed to explore the influence of social media on some of consumers’ decision-making steps and whether social media was involved in the luxury information search and evaluation of alternatives to purchase.

According to the literature review, Chinese online celebrities are considered complex beings, and consumers hold different attitudes towards a celebrity’s promotion and recommendation of a luxury product. The questions What’s your opinion when you see a KOL recommend the luxury product? and Have you made your purchase decision due to these recommendations? aimed to elicit a response related to evaluating a KOL’s influence on the luxury item selection process.

A network community serves another effective social function by helping people connect and share information (Shams, 2016a, 2016b, 2016c, 2016d). A private network community like WeChat or a wide network community like Instagram, Weibo, or Little Red Book serves different social functions in consumers’ decision-making processes.

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