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Copy of Shanghai Tang

This is a case analysis of Shanghai Tang: The First Global Chinese Luxury Brand? // Completed by: Ariona Adams

Pedro Alves

on 2 June 2013

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Transcript of Copy of Shanghai Tang

Shanghai Tang attracted wealthy tourists
from around the world and considered them
to be their core customer. The most purchased
product by these consumers reflected traditional
Chinese culture and included the signature Tang
jacket, and the silk handbag that had cherry blossom embroidery. Target Market Positioning Brand Image Goal Start In 1994, the first flagship store opened to the public on Pedder Street, in Hong Kong. Products included women's, men's and children's clothing, along with fashion accessories and home goods. -- American consumer interest for upscale
Chinoiserie was overestimated.
-- The company's style was confusing; there
was no clear product presentation, a mix of
too many stylistic varieties.
-- It was difficult to justify high-end prices with
Chinatown being so close.
-- Sales revenue could not cover the high rent
costs on Madison Avenue. Shanghai Tang embodied cross-cultural blending, that then became the brand's signature. To launch China's first authentic
luxury brand. This was to be done
by creating the first global Chinese
brand that revitalized traditional
Chinese designs that incorporated
dynamics of the 21st century. Shanghai Tang Ariona Adams Shanghai Tang Issues David Tang focused on other ventures and the company recruited new leadership. Raphael le Masne de Chermont of Piaget was called in to refocus and redirect the Shanghai Tang brand. He transformed the brand into more of a lifestyle brand that came off as being "more modern". Shanghai Tang began rapid expansion,
with hopes of flagship stores located in
New York, London and many Asian cities.
In December 1997, the first flagship store
opened on Madision Avenue (prime fashion
retail estate) in NYC. The store closed and
relocated in July 1999 to a smaller and
more affordable location. The company knew some
restructuring had to be done
in order to achieve success
and longevity. The First Global
Chinese Luxury Brand? Questions to Answer 1. Defining a luxury brand, how is it different from a regular, mass market brand and how a luxury brand is built.
2. Characteristics of Shanghai Tang's brand image and sources of brand equity.
3. Strengths + Weaknesses of of the brand's existing personality and image.
4. Accountability for unsatisfactory results in building a global luxury Chinese brand and what could've been done differently.
5. Shanghai Tang's positioning relative to other luxury brands and how to improve it. "Our business is to always be quintessentially Chinese and to find our place within the mainstream. If we stop being Chinese, we will completely lose ourselves."

- David Tang
(founder) In hopes of trying to fix China's reputation
for cheap, low-quality products, Shanghai
Tang stamped all of their product "Made in China". This was done with the idea of
creating a new light for consumer
perception to goods produced in China.
When Swiss luxury company,
Richemont, became a major
shareholder in Shanghai Tang,
it provided financial and
symbolic backing from the
European luxury masters. This provided
brand equity. The company plan to grow with an extensive expansion of 11 stores, to make a total of 30. However, the issue they ran into was being relevant to both wealthy Chinese and non-Chinese consumers. To do this, Shanghai Tang collaborated with a variety of top designers in order to raise awareness of the brand. Le Masne decided to launch a line of licensed products, such as perfumes and eyeglasses, in hopes of increasing sales. He also did this so that Shanghai Tang could reach a larger consumer base that would be able to afford their products at a lower price point. Shanghai Tang began to focus on specific public relations and sponsored events based on each regional market.
To maintain luxury status, prime retail locations stayed accessible to higher price point consumers.
Shanghai Tang also opened shops in exclusive worldwide hotels in order to cater to wealthy travelers. Creative director, Joanne Ooi, created an image for the company that "combined Chinese cultural references and sleek, contemporary" clothes. Her goal was to create an international image that stood as the ambassador of modern Chinese style. This was done through research
from art museum collections
and history books on specific regions.
Things such as Chinese calligraphy
were used as patterns for decoration
on clothing. This was one way that
she was able to establish credibility
of the brand's desire to become a
representative of China's national aesthetic.
Full transcript