A novel decision - Making model of the globalizing consumer behavior: Evidence from Chinese middle-class consumers who purchase luxury goods from overseas markets

Abstract

The goal of this study is to propose a valuable decision-making model in examining Chinese middle-class consumer behavior, specifically the new purchasing behavior regarding luxury goods. Chinese middle-class consumers purchase seventy percentage luxury goods from oversea markets, although they are available in their domestic market. The only difference between the Chinese market and foreign markets is the price as in China, price is much higher than in other markets. However, this observation conflicts with previous theories of the luxury goods consumer behavior, such as the Veblen Effects, the Bandwagon Effect, and the Snob Effect, all of which imply luxury consumers are not price sensitive. This study is both qualitative and quantitative as it provides a conceptual propositional model and tests it by variety of empirical regression models. The results agree with the previous research that illustrate Chinese middle-class consumers are also price insensitive to luxury goods. They are pushed out to the global market by the luxury goods companies, which attempt to limit the purchasing channels in China. (Author abstract)