“A second shop and a third shop should open in Paris and Beijing, probably next September,” said Hermès Chief Executive Patrick Thomas.
Hermès has always intended to make Shang Xia a global Chinese luxury brand, although it was launched specifically for the Chinese market.
“The idea is to bring the Hermès philosophy to China, to create a Chinese Hermès,” said Thomas,“Instead of buying another company, ‘Why not create a brand from the ground up that shares our philosophy — outstanding quality, creativity, and strong style?’”
Sales have exceeded expectations, but Shang Xia is not yet profitable.
Thomas expects Hermès China sales to increase by 40 percent this year. This market “has huge potential for growth… which will stay above 25 percent in the coming years,” Thomas said.
Industry experts and competitors are following Shang Xia closely to see how successful Hermès is in its strategy to grow a local brand either as an early participant in the emerging movement of “home-grown” luxury brands or as a strategy to capture a larger share of China’s coveted luxury market without compromising Hermès’ exclusivity.
The Shang Xia (“up down” in Chinese) Shanghai store, located in the Hong Kong Plaza Mall, is minimalistic chic and elegant. With the goal of a balanced mix of Chinese craftsmanship with modern style, the brand offers everything from hand-sewn cashmere clothing to home furnishings to shoes to tableware made from traditional Asian materials such as bamboo, jade, and porcelain.