STUDY CASE

SHANGHAI TANG :

CHINA’S FIRST GREAT

LUXURY BRAND ?

Bangun Gesang                         Graciella Hanna Deborah

Fiola Okta Ningtias                   Raditya Fahmi
Nopi Yanti Sindy
 SHANGHAI TANG’S

INTRODUCTION :

The First Global Chinese Luxury Fashion Brand

Founded in 1994 by David Tang in Hongkong
The first concept refers to Chinese Culture and Traditions
The brand aims to represent as “ The Ambassador of Chinese
Modern Style”
The fundamental design was inspired by 1920s Cheongsam mixed
with Modernity of 21th century
Famous because of its bright colours
 t-shirts are priced at around 90.000won, rising to around 600.000
won and upwards for dresses and coats.
INTRODUCTION TO CASE

Since 1980s : The luxury market has grown to reach almost

200 billion and it will grow in few year by 5 percent every
year.
Asian luxury market predicted will grow 10 percent every
year, and in 2020. The number of millionaires will almost
double at about 2.2 million people.
The willingness to consume luxury product will increase
rapidly
The first western luxury brands came to Chinese market at
1990’s : Louis Vuitton and Gucci
China made luxury product too, such as Tiger Dress,
Shanghai Vive Cosmetics, Longio watches and Shanghai
Tang (1994)
SHANGHAI TANG

HISTORY

1994
was the born year of Shanghai Tang by David Tang in Hongkong
Positioned as a custom tailoring business.
Using the best quality Chinese materials from luxurious Chinese silk to
the finest Mongolian cashmere and precious Chinese jade,

1996
A robust market selling Chinese Souvenirs to well-heeled tourist
Positioned changed to Ready to wear. 
SHANGHAI TANG

HISTORY

1997
Shanghai Tang open a store on Madison Avenue in New York
The fashion world at 1997 seemed confused about whether Tang want to
lunch new era of  fashion or keep selling Chinese fashion merchandise

1999
Tang had miscalculated the demand of Americans for Chinese Fashion
Shanghai Tang needed to be more modern, need continuous fresh design
to keep customer coming back
Clothes must be wearable and modern, not customey design
Shanghai Tang move to another smaller outlet far from Madison Avenue
SHANGHAI TANG

HISTORY

2001
David Tang decided to sell the major of shareholder to Richemond,
Luxury Group
But the revenue was still stagnant, it's not improving
Asian financial crisis happened, the store in Asia and America weren't
going well

2002
The SARS virus attacked the world, and it shuted down business in
Hongkong for six months
SHANGHAI TANG

HISTORY

2002 - 2003
Enter de Chermont (one of the member of Richemont) took over the
top level management of Shanghai Tang.
He changed the niche mission of Shanghai Tang to the first profitable
Chinese Brand
The company worked on repositioning Shanghai Tang, to be more
Modern, relevant and luxury. Since Prestige is the most important in the
Asian Market
But for a year, it is still out of touch with market
“The brand had no depth, no sincerity, no differentiation”
SHANGHAI TANG

HISTORY

Fall and winter of 2003 - 2004

The designer of Shanghai Tang gets an Idea to mix the modern fashion
with China-related theme.
Twice a year, she defines a theme for the next season
And discussed it with another designer from over the world
The collection was sold out, even the previous collection was sold out
too
The revenue increased rapidly
GLOBAL AMBITION

China has gone from being a low-cost producer

Now China will create its own brands, launching products
that can compete in quality, style and prestige with
western offering
Shanghai Tang can be the first big luxury brand from Asia
While the luxury market is already huge, $168 billion a
year, and growing 7% every year
By the end of 2004, there were over 236.000 mainland
millionaries
The CEO of Prada said that China can overtake the U.S as
a market of luxury goods by 2020
 SHANGHAI TANG

It must create a look that Chinese

Culture and International Fashion
Shanghai Tang has opened store in
prestigious district in the world, for
example, Tokyo, London, and Paris
THE THREE LEVEL OF SHANGHAI

TANG PRODUCT

CORE CUSTOMER VALUE

Customer prefer a prestigious
distinctive signature design
modern fashion mixed with Chinese culture
fresh design
continuous collection, and wearable
Based on the case Shanghai Tang create chinese
fasion for men and women clothes.
ACTUAL PRODUCT

Product

Shanghai Tang Spring/Summer 2012 Campaign Shanghai Tang’s Product Expansion

Shanghai Tang store in Hong Kong on Pedder Street

ACTUAL PRODUCT

Brand Name
ACTUAL PRODUCT
QUALITY LEVEL
Shanghai Tang using a good
quality material which is
brocaded parkas with fur
trimmed hood, chinchillia
lined silk coat, silk jacket
topstitched in cloud patterns,
tweed skirts festooned with
crystals in a dragon scale
design, cardigan embellisehd
with jade and for the final
outfit a full length shearling
coat encrusted with swarovski
crystals.  contemporary chinese art.
PACKAGING
DESIGN
For the packaging The design of Shanghai
Tang Product  for the fall/
Shanghai taking winter collection using
care in preparing motifs which included
element such as symbols
the product that from the emperors robes
had bought by their and embellishments fit for
consumer by giving imperial court. For the
spring/ summer design
a good wrapping. collection using
AUGMENTED PRODUCT

Loyalty program
Returns and Exchanges
Refund and Cancellation
 Payment Security
International Delivery
TARGETING AND

POSITIONING

High-class economy society, in developed

TARGETIN
countries and developing countries that expected
to grow in a few years
G
Sources : International Monetary Fund (IMF)
 SO WHAT COUNTRIES YOU

THINK ST WILL COME TO?

India There might be a problem for Shanghai Tang to expand their market to India
Germany and southeast ASIA since those countries have opposite culture, they tend to
Japan use full body clothes and China use fenceless clothes.
Brazil
French So Shanghai Tang should do the same formula as they did in the U.S which
Indonesia mixes the culture and design the clothes with South East Asia Designer.
UK
Shanghai tang should not do Downward Stretching in their product lines to get a
lower level segment, because it will ruin the core customer value, which is
prestigious and luxury.

Shanghai Tang should extend their product line length, they should add more
kid’s product since the parent tend to spend more money on their kids and the
population of developing countries will increase every year, means many kids
will born or grow in several years
POSITIONINGS

The first luxury fashion of Chinese Culture

and Modern Fashion
 CHALLENGES

How can Shanghai Tang will grow without losing the

company brand DNA of Chinese Culture?
How can Shanghai Tang will get bigger market share
without destroying Core customer value?
How can Shanghai Tang give luxury shopping experience
to a customer while online shopping is more preferred
nowadays?
ALTERNATIVES

1. Create the brand and product by their own

company
2. Allying with Western Luxury Brand
STAND BY OWN

COMPANY

Advantages
Has full control of the company and it is easy to make the
decision
The DNA of the company will not easy to be vanish
All the revenues only go to the company
Easy to make a product by their own creativity or Idea
without getting any interrupt by other parties.
It is lower cost than the other alternatives
Disadvantages
The risk is own by Shanghai Tang only.
Has Limited Idea and Creativity
Has no ability in marketing expertise of luxury market
Has to compete with another western luxury brand
ALLYING WITH WESTERN

COMPANY

Benefits
Shanghai Tang can get knowledge from Western Luxury brand
Shanghai Tang can mix the Chinese culture and modern fashion with designer from
western luxury brand
Shanghai Tan can get help in term of marketing expertise from Western luxury
brand
U.S is one of the big market of luxury market
Western allies can contribute to the improvement of the general image of Chinese
products, which will facilitate the development of future Chinese luxury brands.
Luxury is heavily influenced by western countries
Western luxury brands were generally perceived as being more luxurious and
prestigious,
Sharing Risk
ALLYING WITH WESTERN

COMPANY

Disadvantages
Shanghai Tang may lose their DNA
Sharing Profit
Each partner is an agent of the partnership and is
liable for actions by other partners
Hard to take a decision
It cost higher than without allying with Western
Company
CONCLUSION

We suggest Shanghai Tang allying with Western luxury brand

They can have a perfect combination of Chinese Culture and
Modern Fashion
U.S is one of the biggest luxury market
Shanghai Tang need a partner who is good in marketing expertise
Western Company can overcome the problem of e-commerce
The risk can be shared with another western luxury brand
Western partner seems to be helpful to overcome the challenges.
QUOTE

Combination of Chinese and Western Elements

can be the most sustainable platform for
drawing customers
(Armoudom,2012)
THANK YOU

SO MUCH!