A model for Hermes during the Fall/Winter 2012-2013 ready-to-wear collection show on March 4 in Paris.
A model for Hermes during the Fall/Winter 2012-2013 ready-to-wear collection show on March 4 in Paris.

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Hermes launched luxury brand, Shang Xia, in China

Brand intended to celebrate "Chineseness" and revive traditional craftsmanship

Financial Times —  

China’s ancient emperors knew how to live. Shang Xia, the Chinese luxury brand launched recently by Hermès, is trying to resurrect that image of a much older civilisation in which only the best would do.

Jiang Qiong’er, Shang Xia’s founder, is determined to help China cast off the inferiority complex that comes of decades of producing cheap trinkets.

For Shang Xia – the brainchild of Ms Jiang and Patrick Thomas, chief executive of Hermès – is that unusual thing in China: a brand that celebrates its “Chineseness” rather than hiding it. If it succeeds, it could herald the emergence of China as a power to reckon with in the global luxury business and provide a blueprint for other local brands to become globally competitive.

Hermès owns the majority of the venture’s shares, while Ms Jiang holds an undisclosed stake.

Speaking in English accented with the French she learned while studying at the École Nationale Supérieure des Arts Décoratifs in Paris, Ms Jiang places the brand squarely in a millennial tradition of Chinese craftsmanship.

“During our history, we had the most refined luxury, during the dynasties of the various emperors. It’s really just a pity that in the last 100 years, that [relationship with the past] was broken … because of the Cultural Revolution,” Ms Jiang, 35, tells the Financial Times. She says her generation needs to reconnect with China’s creative past before centuries of craftsmanship die out.

The Chinese expression “inherit the past, build the future” is the inspiration for the brand’s name, which literally means “up and down”. But it is not just the name that is topsy-turvy: the brand turns conventional wisdom about luxury in China on its head. Its flagship, and so far only store, on Shanghai’s prime shopping thoroughfare of Huai Hai Middle Road, is minimalist, subdued and understated – words rarely used to describe luxury emporia in China.

Staff warn visitors to the shop – whose feathery white, cave-like interior looks as if it was taken straight from the dream world of a Chinese sage – that it may be hard to spot, nestled among glitzy neighbours including Cartier and Tiffany.

Inside the Shanghai boutique, which opened in 2010 and is soon to be joined by stores in Paris and Beijing, customers are served Chinese tea in translucent porcelain teacups. Among its collection of clothing, jewellery, furniture and objets d’art, every piece has a story: a cashmere felt coat is inspired by the wool felt saddle blankets used by Mongolian horsemen; a jade “ladder to heaven” necklace echoes the bamboo undergarments worn in imperial China to keep heavy ceremonial fabrics away from sweaty skin.

The necklace, at Rmb80,000 ($12,660), is also available in wood or gold for less. Items in the shop range from affordable to ultra-luxe, with many priced as low as Rmb1,500. Staff say customers are split evenly between foreigners and Chinese.

Ms Jiang says the shop’s signature porcelain and bamboo tea sets are made by an artisan who previously created large elephants out of the material. “But young people don’t want those objects at home.” So she found a way to adapt that craftsmanship to an urban lifestyle.

Not that Shang Xia asks its customers whether they want bamboo elephants. “We don’t do marketing,” Ms Jiang says unapologetically. Neither is Shang Xia much worried about making money, apparently.

“Shang Xia is not a financial investment project, it is a cultural investment project,” she says. “Luckily, we have a partner like Hermès” that is willing to wait, she says. “Other business projects, the life of the project is five years or 10 years, at Shang Xia the dream is 100 years, 200 years.”

Certainly, she can plan for continued growth in the Chinese luxury market. McKinsey recently forecast the market would expand 18 per cent a year, to Rmb180bn by 2015.

Stanislas de Quercize, chief executive of jewellery group Van Cleef & Arpels, says a brand such as Shang Xia has a good chance of success. “I see in China an excellent eye for design,” he says. “The craftsmanship has always been there”.

Jerry Clode, of brand consultants Added Value, says Shang Xia’s strategy could work: “Embed their brands in a story of 5,000 years of continuous culture … and avoid negative perceptions of what an international Chinese brand would mean.”

“Negative perceptions” mentioned by China watchers as a potential threat to such brand building include global fears of China’s political and economic power. But success could “provide a pathway for other brands with core Chinese equity to try to do the same thing – without a foreign partner,” Mr Clode says.

Ms Jiang admits that Shang Xia’s efforts to establish a world class maison de luxe will take time. “China conquered the world in the last 30 years with its economic development,” she says. “It needs to keep conquering the world for the next 30 years with its culture … otherwise we will remain an underdeveloped country,” she concludes.

Additional reporting by Shirley Chen