Monday, 28 December 2009

hermès to launch "上下" in china


it's been reported two weeks back that hermès will launch a new brand called "shang xia 上下" in china. the economy is booming over there with much new found wealth. however rather than tailoring some products for the chinese market, hermès chose to set up a completely new brand.

interestingly, if we add the words "shang 上" and "xia 下" together, it becomes "ka 卡", meaning 'card'. getting them to swipe the cards?

if we look at it as a diffusion brand, then the idea isn't new: black barrett, burberry black etc for the japanese market and not (widely) available elsewhere. for "shang xia", why would hermès not name it something else to ring in the association? probably because it doesn't want to, as "shang xia" will be a cheaper line.

smart. so on one side of the world they can grow their business making it an aspirational brand. while on the other side not losing the prestige as "shang xia" is a separate business venture, not to be seen as a diffusion line. if not, i can't think of a reason why this venture is rather hush hush and wasn't announced on a much grander scale.



looking at above results for first 9 months of 2009, the asia pacific region came top of the class. like kids with the best grades, they deserve more investment.

"shang xia" will include ready-to-wear and decorative arts inspired by chinese culture and traditions of craftsmanship. these are to be made using chinese raw materials and artisanal know-how. as mentioned by hermès to a french newspaper, the objective of this move is to offer cheaper products, as well as capitalising on the growth of the luxury market in the country in 2010. the new brand will be tailored for the chinese market where hermès lags behind its competitors.

if we interpret the above as hermès launching a new (diffusion) label to be made in china to keep costs and retail prices down, how will it go down?


.: hermes fall winter 2009 / reuters :.

to be very very crude, hermès lags behind in the chinese market because of it's pricing, and the distinct lack of branding/monograms on their products. the exact reasons why fans love it in the first place. hence to a certain extent i am intrigued to see how products from "shang xia" will turn out. products are planned for spring 2010 release.

i think "shang xia" is a smart move but it has to be executed correctly and not just a half baked attempt to chase a new market. the downside is that they will lose their audiences in other regions. two years ago investors said russia is where the wealth is at, then it's dubai to be the next mirage. i hope china proves different.



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7 comments:

  1. Shang Xia means topsy turvy in Mandarin apparently... ; )

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  2. It means nothing really... Up and down... Maybe it could mean in the middle (at a stretch, my girlfriend said that whilst laughing to herself)... But it is extremely easy to remember, easy to print off and very commonly used words. They are the verbs for starting and finishing something, i.e. 上班 下班 start work and finish work.

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  3. Your last two posts have been really interesting

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  4. I concur -- your last two posts have been very interesting. I enjoy this blog immensely. Funnily enough, I always have a difficult time accessing it when I'm not using my home computer and end up googling certain phrases to find it haha.

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  5. i wonder if Hermes diehards would buy these.

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  6. Just wondering, where did you get the Hermes figures?

    I have to do a paper on the BRICs and am focusing on China and its economic growth.

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what's he wearing?