By Pan Jingyi, Principal Writer, China Business Knowledge @ CUHK

The adage “you are what you wear” often leads many to buy branded products. People normally buy luxury brands for their extraordinary appeal and the confidence they can inspire. For some professionals like lawyers, accountants, investment bankers, and the like, wearing a Rolex watch or a Louis Vuitton handbag could help them catch elite clients.

The consumer’s thirst for high-end products is no secret in China, where the luxury market is expected to reach 816 billion Chinese yuan (US$112 billion) in 2025, accounting for about 25 per cent of the global luxury market share, according to PwC’s 2023 report. However, luxury consumption can lead to negative judgments.

“Luxury consumers are conferred higher status and receive preferential treatment from others, but such benefits come with a hefty social price.”

Professor Jung SungJin

Adam Smith, a pioneer in modern economics, classified goods into necessities, basic goods, affluence goods, and luxuries. Since then, scholars have viewed luxury products as exclusive and expensive items only accessible to the wealthy.

However, recent economic uncertainties have led Chinese consumers to avoid flaunting their wealth in favour of more discreet fashion due to “luxury shame”, similar to what happened in the US during the 2007-2008 financial crisis, according to a June report published by Bain consultancy.

“These are the social costs of luxury consumption,” says Jung SungJin, Assistant Professor in the Department of Marketing at The Chinese University of Hong Kong (CUHK) Business School.

Many luxury consumers worry that their choices may be judged negatively by others, leading them to appear pretentious, wasteful, and snobbish. These concerns can deter individuals from fully enjoying their luxury items as they grapple with potential backlash.

“Luxury consumers are conferred higher status and receive preferential treatment from others, but such benefits come with a hefty social price,” he adds. “They are often viewed as striving for status and managing impressions, and therefore judged as inauthentic.”

Express your true emotions

In a series of experiments, Professor Jung found that many individuals actually enjoy and love luxury products, yet a significant portion of them choose to keep this fervour hidden from others, especially from co-workers and social media followers. “This is because they worry about receiving negative judgments,” Professor Jung explains, citing an example of one individual who indicated wanting to avoid being thought of as a snob.

So, how can luxury consumers alleviate those negative social consequences? Professor Jung, in collaboration with Charlene Chen of Nanyang Technological University and Andy Yap of INSEAD, sought to answer this question in their latest research titled Expressing passion for luxury enhances perceived authenticity. The researchers proposed that openly sharing one’s passion for luxury can lead others to perceive them as more authentic. “Authenticity here refers to acting in accordance with one’s true self,” says Professor Jung.

The team carried out multiple studies to examine their hypotheses. The first experiment examined the consequences of expressing passion for luxury sneakers. The results show that demonstrating one’s passion for luxury helps alleviate the negative impressions associated with luxury consumption.

“We found that the luxury consumer was perceived as less warm than the non-luxury consumer,” says Professor Jung, “However, more importantly, expressing passion for luxury helped mitigate these social costs, making the luxury consumer appear more authentic and, therefore, warmer.”

Positive interpersonal outcomes

In the following experiment, Professor Jung and his co-authors aimed to investigate the reasons why luxury passion expression can enhance one’s perceived authenticity. “This occurs because luxury passion expression makes the luxury consumption appear more intrinsically motivated,” Professor Jung says.

Existing literature indicates that observers often attribute luxury consumption to external motives. In other words, they assume that consumers engage in luxury consumption to gain external benefits like status, social approval, and favourable impressions.

However, expressing passion shifts this inference. “A consumer who expresses passion for luxury will be seen as pursuing the enjoyment and stimulation inherent in the usage of luxury products, such as the pleasure derived from craftsmanship,” Professor Jung explains.

Publicly expressing one’s passion for luxury can make individuals appear more authentic, leading to several positive interpersonal outcomes. Firstly, increased perceptions of authenticity tend to make individuals seem warmer and more trustworthy. “People often associate warmth with genuine intentions, and feel less defensive toward authentic individuals and regard them as more trustworthy,” Professor Jung explains.

Another positive behavioural outcome of enhanced perceived authenticity is people’s increased interest in learning more about luxury consumers. “Disclosing a genuine, unvarnished self and not having a hidden motive is highly valued in interpersonal relationships,” says Professor Jung, adding that these positive effects can coexist with the status benefits of luxury consumption.

Unlike luxury consumption, non-luxury consumption is generally not linked to underlying motivations such as status enhancement or impression management. Thus, the researchers found that the benefits of passion expression are attenuated under the scenario of non-luxury consumption.

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A win-win scenario

While the luxury market continues to grow, this research offers practical insights for both luxury brands and their consumers.

On the one hand, the findings inform consumers that there is no need to hide their passion for luxury goods. On the other hand, Professor Jung suggests that companies can encourage consumers to showcase their passion explicitly. For example, they could nudge consumers to talk about the craftsmanship of the brand, or share and engage with specific social media content.

While expressing passion for luxury is generally viewed positively, Professor Jung underscores that the impact of passion expression on social evaluations might differ depending on what people are passionate about. “One avenue worth investigating is whether passion expression generates similar benefits when applied to other types of impression management behaviours, such as humblebragging about one’s professional achievement.”

The post The art of wearing luxury products first appeared on China Business Knowledge.

By Louisa Wah

If you have ever been called a “jack-of-all-trades,” you can rest assured the phrase “master of none” isn’t far behind. At the very least, it is often implied. But how relevant is this old saying in today’s business world?

Unless you are a jack-of-all-trades who works in an organisation that values your broader skill sets, you may feel like your talents are being wasted.

But there is good news! Recent research into individuals with diverse skill sets found that jacks-on-all-trades are more likely to start a business and succeed as entrepreneurs than those who have only a specialised skill. The reason? They can see more opportunities and are more resourceful when solving problems in an uncertain situation like setting up a new business. It doesn’t stop there. Jacks-of-all-trades who are particularly passionate about developing and nurturing startups are more likely to form highly competent and motivated teams.

The study was conducted by Kevin Au, Associate Professor at the Department of Management, as well as directors for both the Centre for Entrepreneurship and the Centre for Family Business at The Chinese University of Hong Kong (CUHK) Business School. His collaborators included Anna Hsu, his PhD student; Prof. Yingzhao Xiao at Tianjin University; and Prof. Marta Dowejko at Hong Kong Baptist University.

“Having a wide variety of skills makes it easier for jack-of-all-trades to explore and exploit opportunities.”

Prof. Kevin Au

The researchers were curious about what lay beyond the past findings of human capital research. Such research showed that, as employees, jacks-of-all-trades did not do as good in on-the-job performance as those who had specialized skills. Past research also showed that individuals who gained a variety of skills through training were more likely to start their own business. Yet if a jack-of-all-trades is likely to become an entrepreneur, he or she should also be good at launching start ups.

Delving Deeper Into Startup Development

Wishing to know more how a jack-of-all-trades does in the initial stage of the startup process, the researchers designed their study to investigate how having a broad range of skills contributed to the development of an idea from scratch in an accelerated setting.

The study, entitled Jack-of-all-trades’ with passion: Keener to pursue startup in a team, was longitudinal and used data collected from CUHK Business School’s Empowering Young Entrepreneurs Program. The program’s goal was to awaken the entrepreneurial spirit of young people in Hong Kong. It provided an opportunity for them to engage in training and entrepreneurial activities. A total of 902 students, existing entrepreneurs and full-time employees enrolled in the program. Multiple rounds of questionnaires were sent to the participants during a five-month period, from December 2013 to April 2014. The final results came from an analysis of a smaller subset of working adults who continued the program after the survey. This group was considered the most reliable data set.

The study found evidence that individuals with a greater range of skills are more inclined to start a business. Particularly, they are statistically more likely to follow up on their entrepreneurial intentions and take a more active role of forming a team in the startup process.

“Having a wide variety of skills makes it easier for these individuals to explore and exploit opportunities,” Prof. Au explains. “It’s as if they have more antennae to detect the problems and find resources that nobody has seen. Seeing those problems gives them an edge in finding creative solutions. That’s where the opportunities for new businesses lie.”

The Right Type of Passion

Just as interesting as the variety of skills, passion is a crucial factor that contributes to entrepreneurial success. However, the type of passion matters.

Previous studies have identified three different types of entrepreneurial passion. They are: passion for inventing, which is linked to the initial recognition of opportunities that make entrepreneurial activities possible; passion for founding, which is related to how likely a person is to establish a venture to explore an identified opportunity; and passion for developing, which is concerned with developing a venture so the original vision is brought to fruition.

“Any given entrepreneur may exhibit different levels of passion at different stages of the startup process,” says Prof. Au. He notes that having the intention to start a business is not the same as having the emotional capacity to overcome obstacles that may present themselves in abundance during the startup phase of a business venture.

Specifically, the study found that when entrepreneurs possess a strong passion for developing a venture, there is an even stronger positive relationship between skill variety and team formation. “In other words,” says Prof. Au, “entrepreneurs with a variety of skills are more likely to put their skills into use to form a team if they also possess a strong passion for developing.”

How does that actually work? Prof. Au explains that when multi-talented entrepreneurs exhibit a great sense of passion to develop a venture, they attract like-minded individuals to form teams to turn their ideas into reality. And when potential investors witness solid teamwork and creative synergy within the teams, they are more likely to inject capital into the startups.

“Like attracts like when potential team members witness the passion and confidence of the jack-of-all-trades,” says Prof. Au.

“By contrast, entrepreneurs who are lacklustre in developing their ventures are likely to be unmotivated to form teams. This in spite of the fact that they are multi-talented. As such, jack-of-all-trades must possess a high level of passion for developing their ventures to succeed in the long run,” says Prof. Au.

Here is a formula for entrepreneurial success: If you are a jack-of-all-trades, and you possess a high level of passion for developing a venture, team up with other jacks-of-all-trades who share the same type of passion. The chance of your startup becoming a successful, long-term venture will increase.

The post Jack-of-All-Trades: Master of None? first appeared on China Business Knowledge.