China-Designed, Managed Luxury Brand To Launch In Shanghai This September, With Future Plans For Beijing, Paris Locations#
The September launch of Shang Xia, Hèrmes' China-designed, manufactured and managed luxury sub-brand, is a little over a month away, yet despite close to a year's worth of outside speculation we've heard very little from the Shang Xia team. So, in preparation for the mysterious brand's unveiling, rather than throwing out more what ifs or maybes, let's look at what we do know about Shang Xia.
While Hèrmes is behind Shang Xia, the brand itself was started from scratch with the Chinese market fully in mind. Headed by creative director Jiang Qionger, everything from the design to the materials, manufacture, marketing and management will be local. As Florian Craen, Hermès managing director in north Asia, recently told the FT, Shang Xia truly is its own brand: “It is a Chinese brand, developed in China with the Chinese team, based on Chinese craftsmanship and broadly made in China. We don’t want any confusion.”
The first and only location currently planned for Shang Xia will be located in Shanghai's upscale Huaihai Road (淮海路) shopping area, where other brands like Louis Vuitton, Tiffany & Co., Cartier and Zegna settled earlier this year. Following the launch of the Shanghai location, the company plans to open a second location in the near future in Beijing and -- depending on the performance of Shang Xia's first two locations -- may then move on to Paris. According to Patrick Thomas, managing director of Hèrmes International, the benefits of a Paris location would be two-fold: to boost brand value and to validate the brand among visiting Chinese tourists.
3.) Collections Will Initially Include Homeware, Accessories And Furniture, Along With An Annual Limited Edition Of “Cultural Objects”#
While details are scarce on the items Shang Xia will initially offer in its Shanghai boutique, we do know that the company will begin with collections of housewares and furniture incorporating traditional Chinese materials, such as bamboo, zitan wood, agate, silk, porcelain and lacquer. Rumor has it that Shang Xia will later offer collections of ready-to-wear fashion, handbags, and jewelry. Additionally, according to the company website, Shang Xia also "aims to create annual collections of 'cultural objects'", limited to editions of 3,000. This year's objects will focus on the theme of "Heritage and Emotion", under the title "Pass It On."
Shang Xia's first location is being designed by the Japanese architect Kengo Kuma,who is famous for reinterpreting traditional Japanese design for the 21st century. We're excited to see how Kuma works his magic with Chinese materials and design in mind.
Not everyone is convinced that a (presumably) more affordable and China-infused sub-brand is the right strategy for Hèrmes to take in the Chinese luxury market. As Shaun Rein told the FT, most Chinese luxury consumers don't want made-for-China products, and in the same article Sun Yimin, an expert on luxury consumption at Shanghai’s Fudan University, said products specifically targeting the China market are “less welcomed than products that are totally foreign".
However, nothing on the level of Shang Xia has ever been tried before. While we've seen no shortage of China-only limited edition products from Chanel, Leica, and even Ferrari, Shang Xia is the first-ever dedicated sub-brand ever supported by a major luxury brand in China. As such, we actually have no idea how Chinese consumers will react to it. Additionally, Hèrmes' low brand recognition in China relative to competitors like Louis Vuitton may insulate it somewhat from any "brand dilution" that observers like Rein and Sun worry may occur due to Shang Xia's (presumably) lower price point and "Made in China" status.
Currently, Hèrmes is far beyond the grasp of the vast majority of Chinese luxury shoppers, and considering the launch of Shang Xia should have absolutely no effect on Hèrmes' cache among Hollywood celebrities or Europe's fashion elite, it should have no effect on brand perception among China's small sliver of Hèrmes owners, who tend to base their ideas of brands and fashion on Western and Japanese fashion magazines anyway.