Master Thesis | Ruey-Ling Weng

Master Thesis

Materialistic Behavior of Social Media among Chinese Millennials

Based on the research of RED

International Master in Luxury Management

NEOMA Business School (France) & MIP Politecnico di Milano (Italy)

Role

Market/User Researcher, Data Analyst

Duration

June 2020 - Jan 2021

Introduction

This research explores whether RED is the social media most likely to promote the countrywide materialistic phenomenon. Therefore, the study verifies the thesis statement from a social media company's angle. Regarding the controllable operating factor as an external factor, the non-controllable user behavior is an internal factor. Both internal and external factors lead to RED's materialism.

Statement

RED is the social media most likely to promote the countrywide materialistic phenomenon.

Theoretical Framework

Theoretical Background

The Origin of Chinese Materialism- Sinicized Marxism (Marxism localized in China).

Major Luxury Consumption in 2018

Influence on Luxury Consumer Behavior

Body

Research Objective Formulation

KOL marketing (influencer marketing) is a selling strategy with influencers communicating between a brand and its target audience. Leveraging WOM and UGC to achieve promotional effects, KOL marketing has been one of the most efficient marketing methods for promoting a new product or service in China in recent years. Besides, Mediakix (2018) found that 49% of consumers relied on KOLs' recommendations for their purchase decisions. The percentage is even higher for Millennials and Generation Z, corresponding to this research's target. Therefore, the first screening step focuses on KOLs as the core content production to select the Chinese social media to be studied.

Considering three indicators: the abundance of luxury content, Chinese millennials as the target research, and the KOL community operation model. RED is the social media most likely to promote the countrywide materialistic phenomenon. Therefore, I conducted a more in-depth study on RED.

Hypothesis & Theory Support

Hypothesis 1

As the theory background mentioned, materialistic behavior manifests in luxury consumption behavior due to the desire for self-worth improvement. The first argument is an assumption based on known facts: The behavior of expressing self-worth upgrades in the real world also reflects on social media. Also, the theory of Materialistic behavior on social media can support the first hypothesis, which explains the online user seek meaning together, pursue short-term encounters, then form the desire to “see” and “be seen.”

Hypothesis 2

Social media may lead to materialistic behavior due to the platform's operating methods and target users. Therefore, RED is the social media most likely to promote the countrywide materialistic phenomenon. Meyrowitz's metaphors to explore the social theoretical basis of media-users can support the second hypothesis.

Research Methodology

Based on the above concepts, I proposed this framework. Chinese materialism originated from the evolution of Chinese history, which led to the phenomenon of flaunting wealth. The pursuit of self-worth is the ultimate goal of showing off wealth.

RED satisfies the users' needs based on self-worthiness, providing users a channel to expose their self-value and identity. As RED meets the users' demands, it achieved a high retention rate, high conversion rate, combing with a high proportion of luxury posts.

Therefore, the phenomenon has contributed to RED's materialism, while this atmosphere stems from users' desire to promote wealth and identity. From the social media company's perspective, the controllable operating factor is an external factor, while the non-controllable user behavior is an internal factor. Both factors lead to the materialism of RED.

Measurement Development

Hypothesis 1:

The behavior of expressing self-worth upgrades in the real world also reflects on social media.

The internal factor was conducted with the qualitative survey questions to gain deep contextual understandings of users through non-numerical means and direct observations. The purpose of this questionnaire is to explore whether consumers' desire to improve their self-worth reflects on RED or not, which affects their luxury consumption behavior.

The answer options regarded as the factors for the desire to show self-worth or the eagerness to upgrade self-worth will be included in calculating whether there is an overspend in the luxury purchase behavior or not.

Consider the respondents may not want to admit their behavior and thoughts, which might cause the data to missing at random (MAR). Therefore, the two answer options' behavioral attributions are the same for some questions, which means the same behavioral phenomenon is explained from two different angles. For example, "Showing off your new trendy product" and "The product is too famous and too awesome to have one, so you must share it with everyone." These two answer options are both potential factors for the desire to show self-worth. In this way, the research method avoids data MAR as much as possible.

I then used percentage of overspending on luxury to verify the first hypothesis.

The five scale questions on a 1 to 10 scale in the questionnaire are designed to verify the degree of desire to show self-worth or upgrade self-worth. The initial survey scale is too broad of a range. Hence, I decided to group the scale into three categories: likely, neutral, and unlikely.

Regarding the chart, we can see that people who chose likely on question C, “will your purchase decision be influenced by WOM,” 77.6% of them overspent on luxury. And the pie chart also shows that UGC posts have a significant influence on RED users.

So we can know that Overspending on luxury, Word Of Mouth, and User Generated Content have a positive correlation.

As for the multiple-choice questions, the questionnaire's standard is based on the desire to show self-worth or upgrade self-worth. Therefore, the questions will be distinguished by whether there is a desire to show self-worth or not. The self-worth indicator is the questions related to the eagerness to display self-worth.

On the contrary, the questions not related to revealing self-worth are regarded as the non-self-worth indicator.

Since there are several questions, I take two examples as an explanation. The data analysis also showed that the stronger the desire for self-worth enhancement and display, the higher chance of overspending on luxury goods. The two have a positive correlation.

The First Hypothesis Measurement Result

Chinese millennials who know RED and desire to display self-worth or upgrade self-worth stand the highest percentage of overspending on luxury.
WOM recommendations have a significant influence on the luxury consumption of RED users.

Hypothesis 2:

RED is the social media most likely to promote the countrywide materialistic phenomenon.

The controllable operating factor regards the external element, which complies with the second hypothesis. To verify RED's materialism, a quantitative measurement was conducted with the percentage of RED market share in the Chinese luxury market.

Mediation Analysis

The following loop is built by the role respondents play in RED, and it is driven by the desire to manifest self- worth upgrades.

WOM TRANSMITTER: Whether RED users show off new trendy products, recommend products, or share shopping experiences, the UGC articles they publish, aiming to demonstrate their self-worth measured by wealth. Once their behavioral motivation receives positive feedback from the viewer's replies and likes on UGC articles, the aspirers' demand is satisfied by gaining self-worth recognition. Since the aspirers notice that this behavior can fulfill their request, the phenomenon of publishing UGC articles on the RED repeats incessantly, which explains the high volume of luxury posts.

WOM RECIPIENTS: The desire to improve self-worth can be attributed to RED users' motivations to browse UGC articles. Therefore, the UGC articles' browsing frequency will increase spontaneously when realizing the trendy products to enhance self-worth can be found on RED, which illustrates RED's high retention rate. Meanwhile, Chinese aspirers' browsing behavior accompanies responsive actions such as replying, like, and forwarding the article, simultaneously affirming the author's self-esteem value.

CONSUMERS: Once the aspirers find the index products that can fulfill the demand of improving self-worth, they will place the order and becomeRRED's consumers, which interpretsRRED's high conversion rate. In turn, consumers will publish symbolic items and experiences representing their self-worth to satisfy their eagerness.

Conclusion

RED is the social media most likely to promote the countrywide materialistic phenomenon since the Chinese aspires' desire to display self-worth upgrades evidence reflects on social media.

The results are presented as a loop diagram based on the role respondents (WOM transmitter, WOM recipient, and consumers) play in RED, clearly explaining the reason why Chinese materialism flourishes on RED is because the loop is a reinforcement structure.

Moreover, quantitative and qualitative measurements verify Chinese materialism's prosperity on RED, proving Chinese aspirers' high percentage of overspending on luxury and RED's high proportion in the Chinese luxury market.

Conclusion