Hermes and its new brand « Shang Xia »: a good lesson for luxury wines

(Find some more news on www.vitabella.fr). Hermes launches a new brand, called Shang Xia (meaning “topsy-turvy” in Mandarin), in the lucrative Chinese market. Shang Xia will include ready-to-wear and decorative arts inspired by Chinese culture and traditions of craftsmanship. They will be made using Chinese raw materials and artisanal know-how, Hermes said. Shang Xia’s creative director is Qiong-Er Jiang, daughter of a noted Chinese architect. The new brand will be tailored for the Chinese market where Hermes lags behind its competitors. The brand will also be distributed in Paris in one of the large department store. As some would think at first, this move is not a matter of producing and offering cheaper products to the chinese markets. China's tradition is anchored into a long history of talented artists who are appreciated by the entire nation. In fact, these artists are part of the education of children at school and this art culture is deep in their roots. For centuries, it shaped their way of seeing differently the world and, among it, the luxury world. Hermes demonstrates its strength in taking the high risk of going into that direction and being the first in the luxury sector to do so (in fact, Tang is another luxury brand which could be comparable). Hermes shows that it understood the chinese market should be marketed with its specific language (so a specific chinese name for the new brand), specific culture (so a specific range of products with a chinese creative director)...Hermes does not adapt to a specific country. Hermes creates a chinese brand. Hermes does not intend to create a low cost brand in China. They create a luxury brand in China. Shang Xia is not a brand for the chinese market. ShangXia is a brand for the chinese community based all over the world.

How is it related to the luxury wine business? For luxury wines, selling globally is essential and having your wine brand marketed internationally is key. This is the Global approach. In the wine business, the "Glocal" approach (global and local) is impossible as it is difficult to replicate your soil, your estate and all the rest in any other place in the world. But the "Shang Xia" approach is possible. We already saw it, over the last 20 years, with the acquisitions of estates or with the entire creations of estates by "old world" wineries in order to have their own production of "New World" wines. But it was a false "Shang Xia" approach as most of the time only "non autochtonuous" grapes were planted to try to replicate what was done in the Old World. "False" does not mean these wines are bad (some of them get excellent scores from renowned international experts) but "false" means that the cultural local approach was not fully completed as, most of the time, wineries did not care much about autochtonuous grapes or specific local winemaking techniques. Being in the luxury sector obliges to respect some cultural codes but also to set trends. Using autochtonuous grapes, something wine experts are considering more and more now when they try to discover fine wines, and making a wine with a typical and unique great taste could be the "Shang Xia" approach for luxury wines. In this approach, most of the time wineries would consider the help of local winemakers with a strong knowledge of a specific autochtonuous grape (as Gulfi did in Sicily with Salvo Foti, the world renowned winemaker for Nero d'Avola). It will need a long education to make this approach famous among a large public but already wine lovers know about it. Pinotage and a luxury wine in South Africa? Kanoncop is going that way. Nerello Mascalese on Etna? Great wines show the potential. The "Shang Xia" approach is already making progress in the world of fine wines. (Find some more news on www.vitabella.fr).