CHAPTER1 INTRODUCTION 1.1Background Scholarsandsocialobservershavebeencaptivatedbythenotionofluxuryand itsutilizationsinceancienttimes.AccordingtoWiedmannetal.(2009),researchon luxuryfromtheperspectivesofmicroeconomicsandmarketinghasrevealedthatthe termismultifacetedduetoitssubjectiveaspect.Cornell(2002)statesthat"defining luxuryisparticularlydifficult."AsstatedbyKapferer(1998),it"definesbeauty;itis anartappliedtofunctionalitems."Luxuryisilluminating,muchlikelight.According toPage253,"luxuryitemsprovideextrapleasureandflatterallsensesatonce." Whileessentialsarequitepractical,thelevelofpsychologicalandintangible advantagethataproductorserviceofferstoacustomersetsitapartfromluxury (Vigneron&Johnson,2004;Nueno&Quelch,1998).Consideringtheseviews,this researchwilldefineluxuryasproductsorservicesthatprovidesignificant psychologicalandintangiblebenefits,settingthemapartfromeverydayessentials. Theluxurysectorisnotanexceptiontothegrowingglobalunderstandingof theconsequencesofclimatechangeandrisinggreenhousegas(GHG)emissionson humanandenvironmentalhealth(Habib,etal.2021).Particularlyinthecontextof fashion,theluxuryindustryisthoughttobeasignificantsourceofgreenhousegas emissionsduetotheproductionandshippingofgoods(Rukhayaetal.,2021),aswell astheemissionsreleasedduringtheincinerationofclothingtopreservesome companies'brandidentitiesandpreventthemfrombeingsoldinsecondarymarketsor inothernationsatareducedprice(Bae,2019).Inthiscontext,McKinsey&Company statistics(Bergetal.,2020)indicatesthatthefashionbusinesscontributed4%of worldemissions(2.1billionmetrictonsofgreenhousegasemissions)in2018,a figurethatotherestimatesplacecloserto10%(Brewer,2019).Moreover,the manufacturingoftextilesandthedebristhatremainsafterwashingsynthetic clothing—microplasticsthatbypassallfiltersandendupintheocean—makethis industryoneofthemostpollutingonesaswell(Henry,etal.2019;Rukhayaetal., 2021).Theintensivecultivationofrawcommodities,likecotton,utilizesalotof 1 water,degradingthequalityofthelandandresultinginseveredroughts(Rukhayaet al.,2021). Luxurybrandsarethereforeunderadditionalpressuretoimprovethe sustainabilityoftheiroperations(Li&Leonas,2019).AccordingtoCervellon(2013) andKhan&Ahmed(2017),luxurybrandsrespondfavorablytosustainabilitytrends byimplementingsolutionsthatmeetconsumerexpectationsandescalatingcustomer demands.Assuch,luxurybusinessesneedtobemoreenvironmentallyfriendly (Thomas,2018).Largeluxurycorporationsarethereforemakinganefforttoaddress theclimateemergencybysupportingthecirculareconomy,recycling,andthe implementationofenvironmentallyresponsiblepracticesthroughoutthevaluechain (Berg,etal.2020;Thorisdottir&Johannsdottir,2020;Willersdorfetal.,2020). Therefore,thepracticalgapinthisresearchiscenteredaroundthepressing question:Canluxuryproductsmaintaintheirhigh-endstatuswhilebeing environmentallyfriendly?ThisissueisparticularlypertinentintheAsianmarket, whereluxuryspendingissubstantial.Thereisanobservabletensionbetweenthe exclusivityofluxuryandtheprinciplesofenvironmentalsustainability.AsDeanetal. (2018)argue,luxurygoodshavetraditionallybeenassociatedwithexclusivity,value, andpersonalstatusratherthansustainability.Thisperceptioncreatesachallengefor luxurybrandstoreconciletheirpremiumimagewitheco-friendlypractices. UnderstandingwhetherAsianconsumersaregenuinelyinterestedin purchasingluxuryitemsthatprioritizeenvironmentalsustainabilityiscrucial.The Asianmarket,whichaccountsforasignificantportionofgloballuxurysales,stands atthecrossroadsofthisparadox.Recentstudiesindicatethatwhilethereisagrowing awarenessofsustainabilityamongconsumers,thereisalsoskepticismregardingthe sustainabilityclaimsmadebyluxurybrands(Kapferer&Michaut-Denizeau,2020). Therefore,thisresearchaimstofillthispracticalgapbyprovidinginsightsinto consumerattitudesandpreferences,whichareessentialforshapingthefuture directionofluxurybrandsinanincreasinglyeco-consciousworld. 2 Figure1.1Shareofthepersonalluxurygoodsmarketworldwidein2022,byregion Source:Sabanoglu,2023 Previously,Statista’sluxuryconsumermarketreportin2023,sharedthatthe Americasleadwiththehighestpercentageatapproximately35%,followedbyEurope witharound27%.Chinaholdsasignificantsharewith17%,whilethe'RestofAsia' accountsforabout14%.Japanhasasmallerportionatroughly7%,andthe'Restof theworld'categoryhastheleastshare,withapproximately4%.However,when consideringtheAsianregionasawhole,whichincludesChina,Japan,andthe'Rest ofAsia,'theircombinedmarketsharesurpassesthatofanyothersingleregion.When thesepercentagesareaggregated,theyaccountforatotalofroughly38%ofthe luxuryconsumermarket(Sabanoglu,2023).Thisconsolidatedfigureindicatesthat theAsianmarket,asacollective,holdsthelargestportionoftheluxuryconsumer marketcomparedtotheAmericasorEurope.Thisdominanceshowcasesthe significantimpactofAsianconsumersontheluxurysectorasofJanuary2023. Ithasbeenobservedthat,intermsofbehavior,luxuryconsumersbasetheir purchasesonthefollowingfactors:personaltraitssuchasmaterialism,hedonism,and self-identity(Wiedmannetal.,2009);environmentalaspectssuchasculture,prestige value,andsocietalnorms(Shukla&Purani,2012;Zhan&He,2012);andthe dominantinterpersonalaspectbetweentheneedforsnobberyandpopularity (Kastanakis&Balabanis,2012).Inhisgroundbreakingstudyfrom1899,Veblen definedthe"happyfew,"orthepurchasersofluxurygoods,whoboughttheseitems 3 asstatussymbols.Theevaluationofothers'socialstatuscanalsobeachievedthrough theuseofluxuryproducts(SenguptaandZhou,2007).Thus,foraverylongtime, conspicuousconsumption—asitisotherwiseknown—hasbeenlinkedtoluxury.Asa result,thecoreofallconceptualizationsofluxurycontinuestobeconsumption motivatedbystatus. Theresearchgapinthisstudyisrootedintheunderexploredintersectionof luxuryandsustainabilitywithintheAsianmarket.Whiletherehasbeensignificant researchonconsumerbehaviorinluxurymarkets,theintegrationofsustainabilityinto luxuryproductsremainsunder-researched,particularlyinAsia.Theregion,which comprisesdiversecultureswithvaryingconsumermotivations,presentsaunique contextthathasnotbeenfullyaddressedintheliterature. Existingstudies,suchasthosebyAchabouandDekhili(2013),highlightthe challengesluxurybrandsfaceinmaintainingproductqualitywhileincorporating sustainablepractices.Moreover,theskepticismsurroundingtheauthenticityof sustainabilityclaimsinluxurygoods,asnotedbyKapfererandMichaut-Denizeau (2014),furthercomplicatestheadoptionofsustainablepractices.Thisresearchseeks toaddressthesegapsbyinvestigatingthemotivationsandwillingnessofAsian consumerstoinvestinsustainableluxuryproducts.Thefindingsareexpectedto provideanuancedunderstandingthatiscurrentlylackingintheliteratureandoffer strategicinsightsforluxurybrandsaimingtoalignwithglobalenvironmental standardswhilemaintainingtheirexclusiveimage. Theworkthatisnowinpublicationhasalsoexaminedanumberof individual-levelfactorsthatcouldaccountforculturalvariationsintheuseofluxury items.Peoplelivinginvariouscountries(WesternandEastern)couldpurchasethe samebrandsfordifferentreasons(Mooij,2004).Scholarlyresearchhasdemonstrated thatChineseconsumers'inclinationtopurchaseluxuryproductsismoreheavily influencedbytheirneedforuniquenessthanisthecaseforAmericanconsumers (Bian&Forsythe,2012).SimilartoBritishconsumers,Indianconsumersare motivatedtobuyluxuryproductsbydirected,symbolic,andexpressivevalues (Shukla&Purani,2012).Oncemore,consumers'purchasingintentionsinwestern developedcountriesaremorepositivelyimpactedbystatusvaluethanineastern developingeconomies. 4 Ontheotherhand,theluxurymarkethascomeunderheavyfireforitseffects onsustainability.Thiscriticismarisesfromthebeliefthatsustainabilityandluxury arefrequentlyconsideredasmutuallyexclusiveideas;sustainabilityislinkedto moderationandbenevolence,whileluxuryisfrequentlyperceivedasshallowanda sourceofsocietaldiscontent(Widloecher,2010).Asustainableluxurybrandthat promotesequalityandjusticemayruncountertosuchexclusivity,eventhough owningandpurchasingstatusbrandsisonewayforpeopletodemonstratetheir exclusivityintermsofhigherposition(Zhang&Kim2013).Thereisambivalencein ethicalluxury,accordingtoseveralacademicswhofurthersupporttheideathat sustainabilityandluxuryareincompatible(Joy,etal.2012;Streit&Davies,2017). Environmentalprotectionandluxurygoods'salientfeatures—suchastheirexclusivity andlegacy—donotmixwell.Thereasonforthisisbecauseluxurygoodshavelittle todowithsustainability;rather,theyareassociatedwithexclusivity,value,and personalstatus(Deanetal.2018). Thenotionthatluxurygoodswastemoneyforthegratificationofanelitefew feedsthisworryevenmoreandgivesrisetochargesofunethicalandillogical behavior(Kapferer&Michaut-Denizeau,2020).Aplethoraofresearchhas demonstratedtheadversecorrelationbetweensustainabilityandluxury.Achabou& Dekhili(2013),forexample,contendedthatsustainabilityinitiativesmightlowerthe generalcaliberofluxuryitems.SimilarfindingswerefoundinastudybyKapferer& Michaut-Denizeau(2020),whichfoundthatmostconsumersthoughtluxuryshould notbeatoppriorityinattemptstopromotesustainabledevelopmentbecausetheysaw itassuperficialandsociallydamaging. Yet,datafromStatistaasshowninFigure2depictsthewillingnessofaffluent Asianconsumerstopaymoreforsustainableluxurygoodsrevealsasignificantshift inthemarketdynamicsofluxuryconsumption.Despitethelong-standingparadox betweenthetraditionallyexclusivenatureofluxurygoodsandtheequitable, resource-conservingethosofsustainability,asegmentofthemarketappearstobe embracingthisnewformofluxury.Throughoutthethreequartersof2023,a consistentfractionofaffluentconsumersarewillingtopayapremiumfor sustainabilityintheirluxuryproducts,withsomepreparedtospendover25%more. Thistrendsuggestsaburgeoningconsumerconsciousnessthatvaluesethical productionandenvironmentalstewardshipalongsidetraditionalluxuryattributes. 5 ThisshowshowtheburgeoningAsianluxurymarket,asthelargestinthe world,standsatthecrossroadsofanintriguingparadox:thehistoricallyopulent natureofluxuryconsumptiondiametricallyopposedthemodestyinherentin sustainability.Thisdichotomyinvitesadeeperexaminationofthetruemotivations behindluxurypurchases.Doestheaffluentconsumer'sprofessedwillingnesstopaya premiumforsustainability,asrecentdatasuggests,signifyagenuineshiftinvalues, orisitacomplexinterplaybetweentraditionalstatus-seekingandacontemporary veneerofenvironmentalconcern. Figure1.2WillingnessofaffluentconsumerstopaymoreforsustainableluxuryinAsiafrom 1stquarterto3rdquarter2023 Source:Ganbold,2023 1.2ProblemStatement Thisresearchtriestoanswerabigquestion:canluxuryproductsbeboth high-endandenvironmentallyfriendly?Thisisarealissuefortoday'sluxurymarket, especiallyinAsiawhereluxuryspendingishigh.I’dliketoseewhetherpeoplein Asiaareactuallyinterestedinbuyingluxuryitemsthatdon'tharmtheenvironment. Forthis,I'llusetheValueAttitudeBehaviormodeltoreallyunderstandwhyAsian customersmightchoosesustainableluxuryproducts.Iamaimingtodiscoverifcaring abouttheenvironmentisjustatrendorsomethingthatwillstickaroundintheluxury market.Understandingthisisimportantbecauseitcanhelpluxurybrandsmakebetter 6 decisionsandcreateproductsthatpeoplenotonlywanttobuybutalsofeelgood about.Thisstudyisn'tjustforlearning;it'stogivebrandspracticaladviceonhowto moveforwardwiththerightkindofluxuryproducts. 1.3ResearchQuestion Themotivationforthisresearchstemsfromthegrowingimportanceof environmentalstewardshipincontemporarysociety.ItseekstoaddresswhetherAsian consumersprioritizeeco-friendlinessintheirluxurypurchasesandifthereisaviable marketforluxuryproductsthatcontributepositivelytotheenvironment.Theresearch questionsincludeinquiriesintotheimpactofluxurybrands'CorporateSocial Responsibility(CSR)initiativesonconsumerbehaviorandthepotentialfor sustainableluxuryproductstoachievesuccessintheAsianmarket.Thestudy's analysisandconclusionswillbeusedtoaddressthefollowingquestions: 1.DoesSustainableLuxuryValuehaveapositiveeffectonPurchasing Decision. 2.DoesSustainableLuxuryValuehaveapositiveeffectonSustainable Attitude. 3.DoesSustainableAttitudehaveapositiveeffectonPurchasingDecision. 4.DoesSustainableLuxuryValuehaveapositiveeffectonPurchasingDecision withSustainableAttitudeasanInterveningVariable. 1.4ResearchObjective ThisresearchaimstounderstandAsianmarketconsumerbehaviorinbuying sustainableluxuryproductsthroughtheValueAttitudeBehaviormodel.Thisstudy willexplorethenuancedmotivationsbehindsustainableluxuryconsumptioninAsia, sheddinglightonhowcultural,social,andenvironmentalvaluesshapeconsumer preferences,andexamininghowthesustainabilityeffortsofluxurybrandsaffect consumerpurchasingdecisions.Thestudy'sprimarygoalsareasfollows: 1.ToanalyzetheeffectofSustainableLuxuryValueonPurchasingDecision. 2.ToanalyzetheeffectofSustainableLuxuryValueonSustainableAttitude. 3.ToanalyzetheeffectofSustainableAttitudeonPurchasingDecisions. 7 4.ToanalyzetheeffectofSustainableLuxuryValueonPurchasingDecisions withSustainableAttitudeasanInterveningVariable. Thefindingsofthisstudyareanticipatedtobebeneficialforseveral stakeholders.Luxurybrandscangaininsightsintoconsumerpreferencesregarding environmentalsustainability,enablingthemtoaligntheirproductdevelopmentand marketingstrategiesaccordingly.Policymakersandregulatorybodiescanutilizethe researchoutcomestoencouragesustainablepracticeswithintheluxuryindustry. Additionally,consumerswillbenefitfromincreasedawarenessofsustainableluxury options,allowingthemtomakeinformedpurchasingdecisionsthatalignwiththeir values. Byconductingthisstudy,Ihopetocontributetotheunderstandingofhow luxurybrandscanbalanceopulencewithenvironmentalresponsibility.Thisisnot merelyanacademicexercise;itaimstoprovidepracticalguidanceforbrandsand consumersalike,promotingashifttowardsmoresustainableconsumptionpatternsin theluxurysector. 1.5Limitation Thisstudy,whilecomprehensiveinitsapproachandanalysis,hasseveral limitationsthatshouldbeacknowledged.Theselimitationsareprimarilyrelatedtothe scopeoftheresearch,themethodologiesemployed,andthegeneralizabilityofthe findings. 1.GeographicalLimitation ThefocusontheAsianmarket,whileprovidingdetailedinsightsinto thisregion,maynotfullycapturethenuancesofsustainableluxury consumptioninotherglobalmarkets.Cultural,economic,andsocialdifferences acrossvariousregionscouldinfluenceconsumerbehaviorinwaysnot accountedforinthisstudy. 2.SamplingMethodology 8 Althoughsnowballsamplingwasutilizedtogatheradiversesetof responses,thisnon-probabilitysamplingtechniquemightlimitthe representativenessofthesample.Asparticipantsrefertootherswithintheir network,thesamplemayleantowardscertaindemographicorpsychographic profilesthataremoreprevalentwithinthesenetworks,potentiallyskewingthe data. 3.Cross-sectionalDesign Theresearchdesigniscross-sectional,whichprovidesasnapshotof consumerbehaviorandattitudesataspecificpointintime.Thisdesigndoes nottrackchangesovertime,whichcouldbecriticalinunderstandingevolving trendsinsustainableluxuryconsumption,especiallygiventherapidchanges inconsumerawarenessandbrandstrategiesregardingsustainability. 4.Self-reportedData Therelianceonself-reportedmeasuresthroughsurveyscanintroduce biasessuchassocialdesirabilitybias,whererespondentsmightreport behaviorsorattitudesthattheybelievearemoresociallyacceptable.This couldparticularlyaffectquestionsrelatedtosustainability,atopicoften associatedwithsocialnormsandexpectations. 5.QuantitativeFocus Whilethequantitativeapproachallowsforstatisticalanalysisand broadergeneralizations,itmayoverlookdeeper,qualitativeinsightsthatcould explainwhycertainbehaviorsorattitudesexist.Qualitativedatacouldprovide morecontextanddepthtotheunderstandingofconsumermotivationsand barrierswhenitcomestopurchasingsustainableluxuryproducts. 6.LimitedConsiderationofExternalFactors Thestudymightnotfullyaccountforexternalfactorssuchaseconomicfluctuations, regulatorychanges,andtechnologicaladvancementsthatcansignificantlyimpact consumerbehaviorandtheluxurymarketdynamics. 9 Theselimitationssuggestareasforfurtherresearch,includinglongitudinal studies,expandedgeographicalscope,andtheintegrationofqualitativemethodsto complementthequantitativedata.Addressingtheselimitationsinfutureresearchcould provideamorerobustandnuancedunderstandingofconsumerbehaviorintheluxury market,particularlyasitrelatestosustainability. 10.