Understanding consumer behavior regarding luxury fashion goods in India based on the theory of planned behavior
| Pages | 4-21 |
| Date | 03 January 2017 |
| Published date | 03 January 2017 |
| DOI | https://doi.org/10.1108/JABS-08-2015-0118 |
| Author | Sheetal Jain,Mohammed Naved Khan,Sita Mishra |
| Subject Matter | Strategy,International business |
Understanding consumer behavior
regarding luxury fashion goods in India
based on the theory of planned behavior
Sheetal Jain, Mohammed Naved Khan and Sita Mishra
Sheetal Jain and
Mohammed Naved Khan
are both based at Aligarh
Muslim University,
Aligarh, India. Sita Mishra
is based at the Institute
of Management
Technology, Ghaziabad,
India.
Abstract
Purpose –Even though the Indian luxury market is predicted to grow as much as the Chinese one over
the coming years, limited research has been conducted on luxury consumer behavior. The purpose of
this study is to examine the purchasing behavior for luxury fashion goods using the framework of the
theory of planned behavior.
Design/methodology/approach –A total of 257 respondents were included after distributing a
structured questionnaire by surveying real luxury consumers in Delhi. Data were analyzed using
structural equation modeling.
Findings –The results of the study indicated that subjective norm was the most important determinant
of the purchasing intentions for luxury fashion goods, followed by attitude. Perceived behavioral control
was not found to have a significant relationship with purchasing intentions, but it showed a strong
positive relationship with actual purchasing behavior.
Originality/value –This study provides new theoretical insights regarding luxury consumer behavior in
India. It explains the motivating factors behind purchasing intentions for luxury goods among Indian
consumers. The findings of the study will provide great help to global luxury companies in formulating
their penetration and expansion strategies in the Indian market.
Keywords Consumer behavior, India, Theory of planned behavior, Luxury fashion brands,
Luxury purchase intention
Paper type Research paper
Introduction
India has emerged as one of the strongest economies in the world. Despite the recent
global economic crisis, India has sustained its economic growth. India is optimistic about
its future growth and development with a new reformist government in power. By 2024,
India has been forecasted to become the third largest economy in the world (Worstall,
2014). The strong boom in the Indian economy has propelled the growth in the number of
high-net-worth individuals (HNWIs) in India. A study by Wealth-X reported that, in the past
year, India has seen a striking rise in the number of dollar millionaires from 196,000 to
250,000. It is predicted that by 2018, India will have 437,000 millionaires. With 14,800
multimillionaires residing there presently, India is amongst the top eight countries in the
world where one may find the very wealthy (Wealth-X report, 2015). The sharp rise in its
ultra-rich population has spurred the demand for luxury goods in India, thereby making the
luxury goods’ market one of the most attractive and fastest growing segments in India.
Globalization; increase in disposable income; the growing number of young, well-educated
people; and the surging numbers of the upper middle classes are other major factors
responsible for the increasing demand for luxury goods. The Indian luxury market is
expected to grow at the rate of 25 per cent per annum and reach the mark of $14bn in 2016,
up from $8.5bn in 2013 (Assocham report, 2014).
Received 3 August 2015
Revised 16 September 2015
15 October 2015
Accepted 22 December 2015
PAGE 4 JOURNAL OF ASIA BUSINESS STUDIES VOL. 11 NO. 1, 2017, pp. 4-21, © Emerald Publishing Limited, ISSN 1558-7894 DOI 10.1108/JABS-08-2015-0118
In the years ahead, luxury will no longer be the preserve of just the traditional luxury buyers;
rather, an increasing proportion in the demand for luxury is likely to stem from the upper
middle classes that aspire to buy these goods. Because of their rising income levels, this
section of the population is motivated to ascend the “consumption ladder”. Luxury
consumers in India can be divided into two broad categories – global Indians who possess
“old” money and young Indians who have “new” money. Global Indians buy luxury to attain
self-satisfaction, whereas young Indians purchase luxuries because of high social pressure
and to display their flamboyant personalities (Jain and Kharbanda, 2014).
The Indian market is catching the attention of a large number of global luxury companies.
Many players are launching entry-level luxury brands to capitalize on the potential of this
market segment (Assocham report, 2014). Luxury companies are altering their strategies to
match global consumers’ tastes and preferences (Daswani and Jain, 2011). These
companies are resorting to “Indianization” strategies to win the hearts of Indian consumers.
They are targeting Indian weddings and producing customized clothing, handbags,
scarves, footwear, etc. to attract deep Indian pockets.
The growing Indian market is very lucrative for the global luxury companies. To gain their
foothold in the Indian market, these companies have begun to think “Indian” to win Indians’
favors. They have had to understand the values, beliefs and psychology of Indians. The
purchasing behaviors of Indians differ from those of people in Western countries. India is
a collectivist society where individual actions are guided by others’ perceptions. Western
societies are individualistic in nature. There buying decisions are guided by “the self” rather
than by “others” (Wong and Ahuvia, 1998). Therefore, previous research conducted in this
domain in the context of Western countries cannot be generalized to India.
Even though the Indian luxury market is predicted to grow as much as the Chinese one
over the coming years (Assocham report, 2015), limited research has been conducted
on luxury consumer behavior in India. It is critical for marketers “to understand who their
customers are, where to find them and the key factors that drive their behavior”
(Okonkwo, 2007, p. 70). Therefore, it is very important to understand what motivates
Indian consumers to buy luxuries. The present study aims to bridge this literature gap.
Moreover, very few quantitative studies have been conducted previously to understand
the uniqueness of the Indian luxury consumer behavior by using a well-accepted
consumer behavior theory. This research incorporates the theory of planned behavior
(TPB) (Ajzen, 1991) to understand the behavior of consumers who purchase luxury
fashion goods in the Indian context. The key objectives of this study include:
determining factors affecting luxury purchase intentions and luxury purchasing
behaviors amongst Indian consumers;
understanding the relationship between consumers’ purchase intentions and
variables like attitude, subjective norm and perceived behavioral control (PBC) in
relation with purchasing luxury fashion goods; and
evaluating the relative strength of subjective norm in comparison with attitudes
toward luxury purchase intentions in the Indian context.
This paper is structured in the following manner: it begins with a literature review and
is followed by a conceptual framework and hypotheses developments. The subsequent
section outlines the research methodology and measurement used, which provides
details regarding data collection and the sampling method used for this study, as well
as descriptions of the instruments used for measuring the constructs. The next section
discusses the findings of the measurement model, which includes an assessment of
reliability and validity of the constructs. The results of structural equation modelling
(SEM), which included path estimates and model fit indices, are also covered in this
VOL. 11 NO. 1 2017 JOURNAL OF ASIA BUSINESS STUDIES PAGE 5
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