Identifying the drivers of luxury brand sales in emerging markets: an exploratory study

Abstract

Luxury brands across the globe have made inroads into emerging markets (EM). While some brands have succeeded in one EM, they have failed to replicate their success in others. We investigate the drivers of luxury brand sales in EM using a multi-method approach. First, through a qualitative study, we identify which market characteristics of EM (market heterogeneity, competition from unbranded products, socio-political governance, and resources and infrastructure) affect luxury brand sales, with a firm’s marketing effort and a market’s financial freedom being important contingencies. Second, we empirically test the insights using data from 88 luxury brands and robust econometric analyses. Our results show that market characteristics influence luxury sales and that the effects of such market characteristics on luxury brand sales are heterogeneous. We also find significant moderating effects of marketing efforts and financial freedom. Our study thus extends the literature on the marketing of luxury brands and EM.