Identity and Capability Dynamics in Masstige Sustainable Luxury: Insights From Sustainable Start‐Ups in Emerging Markets

ABSTRACT Sustainable luxury has attracted growing academic interest, but there is little research on how sustainability‐oriented start‐ups in emerging markets create luxury positioning while remaining accessible to price‐sensitive consumers. This study explores the emergence and operationalization of Masstige Sustainable Luxury, defined as an approach that combines aspirational premium value, broader market accessibility, and environmental and social responsibility. Based on 30 semi‐structured interviews with founders and key employees in 10 Indian start‐ups, this study integrates Organizational Identity Theory and Dynamic Capabilities Theory to explain how identity and capability development interact under resource constraints. The findings suggest that resource abundance is not a sufficient condition for success. Instead, start‐ups build three mutually reinforcing capabilities: Enduring Capability, Masstige Brand Capability, and Scale‐Up Capability, creating durable product value, emotional appeal, and responsible growth. The study contributes a Dynamic Interaction Model that demonstrates how sustainable start‐ups sense, seize, and transform opportunities while redefining prestige through affordability, authenticity, cultural resonance, and sustainability‐led value creation in emerging markets.