So far much of the academic literature on luxury goods has been written from a Western perspective, with the result that our understanding of luxury consumption in the Chinese context remains rather limited. This paper aims to close this gap by examining how reference groups influence contemporary luxury brand consumption amongst young aspirational middle class consumers belonging to the Post-80s generation. It explores from a socio-cultural perspective the role which luxury brands play in their everyday lives and how this impacts on how they construct their identity at both a social and an individual level. In East Asian societies there has traditionally been a Confucian emphasis on the ‘collective self’ being more important than the individual self, and the need to take into account face saving (mianzi) and its corollary shame when understanding consumer behavior. Indeed, according to Wong and Ahuvia (1998), it is this notion of the interdependent self and the importance of maintaining ‘face’ which explains the significance given to possessions that are public and visible such as luxury goods and designer fashion brands. The present study examines luxury consumption through the lens of Social Identity Theory (SIT), which posits that individuals define their self-concept in relation to their connections with particular social groups or organizations. As people make comparisons between themselves and groups, they judge themselves as being similar to members of those groups which they feel they belong to (i.e. in-groups) and different from those which they feel they do not belong to (i.e. out-groups) (Hogg & Abrams, 2001). Fifteen in-depth interviews lasting around one hour each were conducted with a convenience sample of luxury consumers aged between 20 and 25 years, who were studying at a private university in mainland China. They were asked about the role which luxury brands play in their life. Major findings revealed different reasons for their strong desire to engage in luxury consumption. Some want to stand out as a luxury consumer within the wider community, while others use their luxury purchases to stand out from members of their in-group. Equally, there was evidence of participants using luxury goods to fit in with others in their in-group, as well as using them to of distance themselves from various out-groups.