Hermès creates bespoke brand for China
By Justine Lau in Hong Kong, July 19 2010|
Hermès is set to launch a new brand in China in September, in an attempt by the French company to win more customers in the world’s second-largest luxury goods market.
Florian Craen, Hermès managing director in north Asia, said the Shang Xia brand – which means “up and down” in English – would remain “completely separate” from the main Hermès line to avoid customer confusion.
Some analysts believe that the new Shang Xia shop, which will open in Shanghai selling tableware and furniture, will dilute the Hermès brand, famed for its Kelly and Birkin bags.
However, Mr Craen said that while Hermès was a “Parisian company,” Shang Xia would be “completely different. “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.”
Some western luxury groups have designed specialised lines for Asian markets, such as the Burberry’s Black and Blue Labels that are sold exclusively in Japan and Hong Kong.
Levi Strauss, the jeans company, is reportedly planning on launching a Chinese brand this year.
Hermès’ decision to create a brand for the Chinese market also reflects a thorny issue faced by luxury companies on the mainland.
Companies need to figure out ways to appeal to more Chinese consumers with localised products without jeopardising the value of their brands.
Hair and skincare brands must adapt their products to Asian skin and hair, which differs biologically from that of western customers, and cosmetics brands must adjust to the mainland cultural practice of wearing little or no make-up.
But clothing and footwear luxury brands do very little to adjust their products.
Shaun Rein of China Market Research group in Shanghai, said “Foreign brands want to say: ‘We are foreign’”. He said most