Presented by Nesrine ABID
Overview 1. 2. 3. 4. 5. 6.
History of The Brand The reason HermĂ¨s invested in Shang Xia 4Ps SWOT Analysis Recommendations Conclusion
1. History of The Brand • Shang Xia which means "up-down" is a Chinese luxury fashion brand that was created in 2008 by a Joint Venture between the designer Jiang Qiong Er and Hermès group. Shang Xia's mission is to revive and promote China’s 5,000year-old cultural heritage and leverage Chinese craftsmaship to design contemporary products, It provides High-quality products that combines both the French and the Chinese culture • Even though Hermes is the main shareholder with 90% shares, the brand concept is built on four guiding pillars that is striving to keep and cultivate its own identity:: • Timeless aesthetics • Sophisticated lifestyle • Traditional craftsmanship • Contemporary design
2. The reason HermĂ¨s invested in Shang Xia
China today is on its way into becoming the worldâ€™s largest economy and Chinese Customers are known to be the major consumers of luxury products around the globe. According to the 2015 McKinsey&Company research, we can conclude that by 2025 Chinese consumption of luxury goods are expected to grow up to 40% of the total consumers will be buying luxury goods with a major annual growth of 25%
2. The reason HermĂ¨s invested in Shang Xia
This McKensey research is based on a survey of 10,000 Chinese consumers aged between 18 and 55
across china. To analyze the consumers behavior and preferences when it comes to local and foreign products. The finding indicated that Chinese consumer's obsession with foreign products is declining and a new attitude
and behavior is increasing. Especially with the Chinese government encouraging local markets. All in all, Chinese consumers are developing a tendency to consumer local products and this applies for fashion apparel and accessories.
2. The reason HermĂ¨s invested in Shang Xia: Shang Xia and Hermes One common point between French and Chinese consumers is the belief in the concept of "slowing down and savoring lifeâ€?. From the past research and findings we can conclude that Hermes investment in Shang Xia is very strategic as the brand will not only control and keep it's Chinese clientele who is tending to prefer local products, but also to expend more the brand to a wider public, Bringing Chinese design and craftmanship to promote both countries. Moreover, Shang Xia has equal emphasis on both Chinese inspirations as well as French craftsmanship so it gathers both clientele (French& Chinese) who share the same appreciation "Chinese customers are becoming more and more sophisticated," Jiang says. "They are craving for their own cultural identity and to show the rest of the world their taste and lifestyle. They are more self-assured and confident today too so they don't need logo-centric products to flaunt their wealth." Shang Xia
for sophistication and luxury.
3. 4ps: Product Tea sets
3. 4ps: Product
Accessories between 60 - 1200€ Tea Sets between 60 – 1500€
Scarves between 160 - 520€ Leather Goods between 640 - 800€ Furniture is between 60 - 200€
3. 4ps: Promotion Social Media
Instagram: 4 642 followers
Facebook 7,363 Followers
Youtube 161 followers
3. 4ps: Promotion Features in Journals and Magazines
Business of Fashion Magazine
3. 4ps: Promotion
Official website and online store
3. 4ps: Place The products are sold in Physical flagship stores and in concept stores • -SHANGHAI • -BEIJING • -HONGKONG • -PARIS
4. SWOT Analysis S • • •
Mix of Chinese and Franch Culture High Quality craftsmanship Hermes being the main shareholder means financial, strategic and promotional support
T • •
W • • • • •
Lack of communication and Marketing of the Brand Lack of visibility on social media platforms Consecutive financial losses for years No clear brand identity, no story, it sells no dream for the consumer Bad reviews from consumer: bad image
Counterfeiting Nothing Original about the brand leads to no competitive advantage therefore the threats of new entrants sharing the same concept
O • • •
Chinese market growth rapidly for luxury goodsDemand for craftmanship and original designs and items growth of technology: the company can use the technology and Social media to gain more visibility
5. Recommendations PRODUCT: - Create a product proper to the brand - Communicate the prices clearly -There are a lot of products ( teapots, furniture, ready-to-wear, ), this increases customer confusion, therefore, Shang Xia, has to specialize to gain its client's trust. PLACE -Make the interior dĂŠcor of the store noticeable and relatable to the brand and reflects the brand identity -Improve the online store -Improve e-commerce: for example on net Ă porter website we do not find a big range of products to choose from.
PROMOTION -Choose a brand ambassador to represent the brand and reflects the brand identity -Work on the social Media platforms and their contents -Invest in Marketing and communication: Magazines, Newsletters...) -Work on Consumer loyalty PRICE -The price is not mentioned on the website and well conmmunicated
6. Conclusion Shang Xia is still facing struggles to mark its presence, these struggles are financial problems, lack of communication of the brand, brand identity problems. However, there is a lot of potential especially with the economic growth in China.