The goal of this research is to test the mediating effect of product symbolism on the relationship between conspicuous consumption and social identity formation in the branded clothing sector of young adults. Young adults between the ages of 20-35 who wear branded clothes in Sri Lanka were considered the target population. The data was collected through a survey to find answers to the identified research questions through a quantitative approach. The Snowball sampling method was used as the sampling method for this study. The Sobel Test was carried out using an online calculator to measure the statistical significance of the mediation. The results showed that the effect of conspicuous consumption on social identity formation mediated through product symbolism could be judged as statistically significant. The findings can help with market segmentation and brand positioning. Knowing these symbolic value attachments to branded clothes, marketers can create their marketing mix strategies to provide solutions for self-image enhancement and sustainable competitive advantage from both consumer and company points of view.