Determinants of Perceived Risk in the Luxurious Used-Car Market of Hangzhou, China

Abstract

This study investigates the factors influencing perceived risk in the luxurious used-car market in Hangzhou, China, an emerging market characterized by increasing consumer interest in luxury goods. Understanding perceived risk is crucial for marketers, manufacturers, and policymakers, as it directly impacts consumer purchasing behavior and decision-making. Through a comprehensive survey conducted among 456 participants, the research identifies key determinants of perceived risk, including perceived luxurious used-car consumption value (PUCV), social influence (SI), general life values (GLV), self-identity (SI), experiential value (EV), brand consciousness (BC), and brand love (BL). The analysis employs various statistical techniques, including descriptive statistics and Structural Equation Modeling (SEM), to evaluate the relationships between these variables and their effect on perceived risk. Findings reveal that all proposed hypotheses are supported, indicating significant relationships between the psychological and social factors examined and perceived risk. Notably, higher consumption value and brand consciousness correlate with increased perceived risk, highlighting how consumers' perceptions of luxury and brand status can shape their purchase intentions. Additionally, the study underscores the importance of self-identity and experiential value, as consumers seek products that reflect their aspirations and enhance their ownership experience. These insights provide valuable implications for marketers looking to tailor their strategies to address consumer concerns in the luxury used-car market. Furthermore, the findings inform policymakers about the significance of fostering a supportive environment for local manufacturers, ultimately contributing to economic growth in the luxury automotive sector.

The study contributes to the existing literature on consumer behaviour in luxury markets and offers practical recommendations for engaging affluent consumers effectively. Future research is encouraged to explore longitudinal changes in consumer perceptions and to apply the proposed model in other contexts, enhancing the understanding of luxury consumption dynamics across different cultures.