Table of Contents
Shanghai Tang was founded in Hong Kong in 1994 as a modern Chinese fashion brand with an aspiration to compete in the luxury segment which is dominated by primarily European fashion marques. Much as the preeminent luxury houses rely on their storied pasts and founder stories, Shanghai Tang established an identity that was closely linked to the enigmatic late Sir David Tang, the ebullient cigar-smoking descendant of a renowned Hong Kong family that was once described as “probably the world’s best known and most-travelled” Chinese man (Foulkes 1997). His early ambitions for the Shanghai Tang brand to celebrate the taste and creativity of Chinese design was enacted through the brand’s products and marketing. According to the brand’s website, Shanghai Tang is a play on words; the English transcription of the Shanghai Bund (Shanghai Tan—a waterfront area in Shanghai) is a humorous homonym linking to the founder’s family name Tang.
The Shanghai Tang brand celebrated and recreated Chinese history and featured hybrid East-West garment designs with its iconic cheongsam (or qipao) and the mandarin-collared Zhongshan suit. Other classics included a range of mandarin-collared pique polo shirts, whilst accessories such as watches and bags were adorned with the communist red star. CEO Jeremy Tromp explained at the time that “The whole idea is to revitalize Chinese design—there is a resurgence of national pride—and we are the first Chinese lifestyle brand to go back to the roots of 4,000 years of history and culture” (Menkes 1997). The retail environment of the original Pedder Street store helped build the Chinese heritage brand story, with its retro fittings and fixtures recreating a Shanghai salon of the interwar period. This heritage was also built by the brand working with high-profile Chinese actors such as Gong Li (star of films such as Raise the Red Lantern) who represented Shanghai Tang in its early days.
Figure 1. The key style elements of the cheongsam style are evident in this Shanghai Tang cheongsam from the Spring/Summer 2014 collection, photographed in the Duddell Mansion store.
The brand repeatedly referenced its brand identity, a modern take on Chinese design, in its product range by manipulating signature pieces and fabrics: Chinese silks, cashmere, and ikat textiles are interpreted through cheongsam dresses, scarves, and cardigans with Chinese knot fastenings as well as mandarin collared shirts, jackets, and coats. In that sense, Shanghai Tang presented a narrative of craft and heritage through its collections that encompassed both kitsch homeware and accessories and sophisticated evening wear.
With the world’s eyes on Hong Kong in the late 1990s as the former British colony prepared to “return” to China after 150 years under British rule, runways around the world presenting luxury labels such as Prada, Yves Saint Laurent, and Dior were filled with Chinese-inspired designs. Just a few years later the Chinese market itself was opening up to international business and, as new generations of Chinese fashion consumers began to engage with international fashion labels, Shanghai Tang sought to also capture this market. Swiss-based luxury conglomerate Richemont invested in the business and the stage seemed set for international expansion.
As the luxury market developed through the early 2000s and the Chinese luxury consumer became a significant consumer segment, many Western brands expanded into mainland China. It seemed that a local brand would have an advantage in understanding the new customers’ wants and needs. However, despite Shanghai Tang’s confidence in the time that they chose to launch a Chinese label—just as the local market was developing exponentially—it seems that most Chinese luxury consumers had different ideas and instead favored international (Western) brands, many of whom had already established flagship stores in Hong Kong and had now expanded into China’s tier one cities of Beijing and Shanghai. Shanghai Tang itself sought to capture a new audience and opened flagship stores in Paris and London in 2003.
As a consequence, despite identifying an apparent gap in the luxury market ripe to be filled by a Chinese label, and despite communicating a consistent brand message through their product, retail design, and marketing communications, Shanghai Tang has struggled to realize its initial ambitions. Having completed a full buyout in 2008, Richemont sold Shanghai Tang in 2017 for an undisclosed sum to Italian entrepreneur Alessandro Bastagli. It was subsequently announced in late 2018 that Bastagli himself had sold Shanghai Tang to Chinese investment fund Lunar Capital, again for an undisclosed amount.
Shanghai Tang was founded in the bustling metropolis of Hong Kong as a tailoring atelier in 1994 by the late Sir David Tang. Subsequently, the business expanded into a Chinese lifestyle brand offering womenswear, menswear, childrenswear, homeware, perfumes, and gifts (Ge 2017). Despite being named after another iconic Chinese city, the Shanghai Tang brand celebrated Hong Kong’s international reputation as a place where East meets West and referenced Hong Kong’s colonial era not only in its products but also in its store design (Radclyffe-Thomas 2015). Its enigmatic founder was born in Hong Kong and educated in the UK, and he aspired to make Shanghai Tang the first international Chinese brand (Shanghai Tang n.d.-c). Shanghai Tang announced its arrival on the international fashion scene with a bold initial retail presence. The iconic Pedder Street store was located right in the middle of Hong Kong’s bustling Central district, a mixture of high finance and retail. The store occupied two floors of a heritage building, one of the oldest extant colonial style buildings in Hong Kong (Radclyffe-Thomas 2015). The Pedder Street building also housed several small fashion retail units as well as the charming members-only China Tee Club, whose 1930s aesthetic of wicker furniture, palm trees, and afternoon tea complemented that of its downstairs neighbor Shanghai Tang.
Initially, Shanghai Tang’s primary customers were the wealthy expatriates, working predominantly in the city’s finance sector, and international tourists who enjoyed browsing the store, which captured and reimagined the glamour of 1930s Shanghai (O’Clery 1997). Hence, the store fittings and signage referenced Shanghai’s heyday of the 1920s and 1930s. Products also referenced retro Chinese fashions and included elegant cheongsams (or qipaos), silk scarves woven with typical Chinese design motifs, and men’s jackets with a mandarin collar. The Chinese custom of gift-giving was represented in the brand’s attention to detail in packaging, with purchases exquisitely wrapped in signature purple tissue paper, placed in its iconic lime green boxes, and tied with purple ribbon before being placed into branded lime green paper shoppers.
In order to realize his dream of creating the world’s first international Chinese brand, Tang ensured that Shanghai Tang’s early branding, including its woven garment labels, bore the wording: “Made by Chinese,” a provocative statement of country of origin at a time when “Made in China” had connotations predominantly of mass production. To emphasize its roots in Chinese history and heritage, as well as to promote the concept of quality and tradition in Chinese tailoring, the Pedder Street store housed a tailoring atelier with rolls of Chinese silks on show around a central cutting table where clients could commission their own custom pieces, which would be cut and stitched by a team of authentic Shanghai tailors. The tailoring atelier has remained a core feature of Shanghai Tang retail design (Radclyffe-Thomas 2018).
Figure 2. Rolls of silk fabrics line the walls of the Shanghai Tang tailoring atelier, referencing the custom-tailoring on which the brand was founded.
Having firmly established an iconic brand identity and a core customer base, and sensing opportunities to expand the brand internationally, Shanghai Tang established stores across Asia and even opened a 12,000 square foot flagship store in 1997 on New York’s Madison Avenue, estimated at the time to be the world’s most expensive real estate (Hays 1999). The Shanghai Tang brand story was particularly appealing to the international media in the late 1990s as the world’s gaze was focused on Hong Kong’s imminent return to Chinese rule after 150 years as a British colony. The November 1997 New York store opening coincided with New York Fashion Week and the launch party was filled with New York’s high society, many of whom were photographed at the launch party wearing Chinese silk clothing.
Sensing an opportunity to capitalize on the world’s interest in a Chinese heritage brand, the Swiss-based luxury conglomerate Richemont bought a controlling stake in the business in 1998. However, the store’s lavish New York opening did not anticipate the brand’s commercial fate and within two years, having failed to capitalize on its prime Manhattan location, Shanghai Tang was reportedly planning to relocate to a smaller, cheaper retail space (Hays 1999). Timing is everything in business and the Asian financial crisis of the late 1990s, followed by the Severe acute respiratory syndrome (SARS) epidemic of the early 2000s, negatively impacted business in Asia; for Shanghai Tang in particular these setbacks hit hard as they specifically impacted their lucrative tourist trade.
Despite these challenges, and although Shanghai Tang’s inability to break into the international luxury market was a set-back, Richemont were still hopeful of guiding the brand to success as other market factors looked favorable. This was especially true after the identification of a wider target audience; the easing of visa restrictions allowed Chinese citizens easier access to Hong Kong, and thus the new Chinese luxury consumer became a plausible target.
A key part of Shanghai Tang’s brand identity is its retail environment, as is the case with any luxury brand, and so it was logical for Shanghai Tang to open stores in major international fashion cities including Shanghai, Beijing, New York, London, and Paris. These stores replicated the brand’s iconic visual merchandising and presented the same retro vision of Chinese luxury, all infused with the brand’s signature scent Ginger Lily, an exotic blossom indigenous to Hong Kong.
Figure 3. Interior of the Shanghai Tang 1881 store, a repurposed heritage building on the Kowloon harbourside, Hong Kong shows the vibrant colorscheme and references to Chinese design key to Shanghai Tang’s visual identity.
Figure 4. Interior of the Shanghai Tang 1881 store showing retro light fittings and the use of the auspicious symbol shou.
Figure 5. Shaghai Tang candles, each named after an iconic city: Lhasa, Beijing, and Hong Kong, part of the homeware range.
Figure 6. Room setting in the Cathay Mansion flagship store Shanghai, note the art deco style furniture and the Chinese motifs on silk cushions. The brand’s signature scent, Ginger Lily, is featured in the central display.
Figure 7. The polo has been a core product for Shanghai Tang. The Hankow 1921 historical collection was designed in collaboration with the Shanghai Rugby Football Club and featured the logo colors of the prewar interport clubs.
Shanghai Tang has sought to entice the Western market and capitalize on Chinese consumers’ burgeoning interest in their own heritage, with stories of the country’s fabled 5,000-year history. Thus, collections repeatedly return to signature themes: the early modern Shanghai, Chinese history and traditions, Mongolian culture, the mythology of the Silk Road, and cultural exchange, where East meets West.
For Chinese nationals, the coastal city of Shanghai is indisputably the historical and contemporary center of modernity and fashion. Even for non-Chinese consumers, Shanghai represents a nostalgic image of a cosmopolitan 1930s city where East meets West—the Paris of the East. Consequently, although Hong Kong was the home of the brand’s founder, its namesake city of Shanghai has been a recurrent feature of marketing materials and collection names. Whether in the literal “Shanghai Redux” of its Autumn 2006 collection which, according to the press release, “drew on the nostalgia and romanticism of 1930s Shanghai,” or in the Spring 2007 collection “Shanghai Modern,” which “focuse(d) on the resolutely modern face of Shanghai.”
Chinese history and traditions are represented in print and textile designs, which include auspicious symbols such as double-fish representing love harmony and abundance or shou symbolizing longevity. A section of the brand’s website explains how the brand uses such icons, images, and symbols as part of its “cultural vocabulary” and outlines the symbolism behind, for example, the dragon, which brings good fortune and protection; the phoenix, which embodies the four sacred Confucian virtues: honesty, loyalty, integrity and piety; and the peony, the symbol of feminine beauty and sensuality (Shanghai Tang n.d.-a).
Such symbols and reinterpretations of Chinese history and culture may have been the strength of Shanghai Tang, but also may have contributed to its dismissal as a brand for tourists or for dress-up. Speaking to China Daily in 2016, Executive Chairman Raphael Le Masne de Chermont, who joined the brand in 2002, admitted that “The designs in the early days were a bit clichéd with dragons everywhere […] Shanghai Tang, for many years, was very touristy as it targeted a Western audience,” but added, “today, it is truly a fashion brand that is based in China and sells to the global market” (Sun 2016).
The year 2011 was a pivotal moment in Shanghai Tang’s history. With the closing of its iconic Pedder Street flagship after reportedly losing its lease in a bidding war with Abercrombie and Fitch, the brand had the opportunity to rethink its strategy. As a stopgap before opening a new Hong Kong Island-side flagship, Shanghai Tang created a pop-up retail experience in the form of Mongolian-style yurts atop the ferry terminal. Its new 15,000 square foot flagship, Duddell Mansion, opened in Spring 2012 in a heritage building just around the corner from the original store. The top floor of the building housed a combined dining and cultural space, Duddell’s (Radclyffe-Thomas 2014). The main store showcased Shanghai Tang’s rebranding, repositioning the brand as a more sophisticated take on its Chinese cultural references (Radclyffe-Thomas 2015). The interior represented a less strident type of Chinoiserie, with subtle references in the form of, for example, vaulted ceilings that resemble Mongolian yurts, rounded entranceways that resemble the architecture of ancient Chinese gardens, latticed shelving units, and a large crystal chandelier in the form of the symbol shou (Himelfarb 2012). The same stylistic elements were included in a new Shanghai flagship, housed in the 1932 art deco heritage listed building the Cathay Mansion, which was also the site of the Fall/Winter 2013/14 runway presentation (Radclyffe-Thomas 2018).
Figure 9. Lattice-work and an oversized birdcage, referencing the Chinese custom of keeping pet birds, are used as a display for Shanghai Tang’s iconic silk scarves in the Duddell Mansion, Hong Kong.
Figure 11. Interior of Duddell Mansion, Hong Kong, showing the use of the auspicious yun/cloud symbol in the display shelves.
Figure 12. Bicycles were once synonymous with China; here, a brand extension into Shanghai Tang branded bicycles.
As well as this new visual merchandising concept, the brand adapted its marketing strategies; for example, Shanghai Tang was one of the few brands to introduce Shop the Runway. Their marketing narratives were also brought up to date, so that rather than dwelling on China’s past, the Silk Road, Mongolian nomads, or Shanghai beauties, campaign narratives sought to represent the jet setting lifestyles of the new Chinese luxury consumer. For Spring 2013 a chic Chinese couple, embodied by model Lina Zhang and actor Hu Bing, were shot by photographer Richard Bernadin as if at their weekend retreat just outside Paris. The winter campaign of the same year, again shot by Bernadin, transferred to central Paris featuring Lina Zhang now accompanied by male supermodel Zhao Lei as a sophisticated couple on a night out at the Folies Bergere. A press release described the couple as “Sophisticated and stylish, […] seasoned world travellers who seek out arts and culture wherever they go” (Shanghai Tang 2013: 12). The campaign continued the following year for Spring/Summer 2014 with Zhao Lei partnered with supermodel Bonnie Chen in a high glamour oceanside shoot.
The year 2014 was the brand’s twentieth anniversary; in this year Shanghai Tang celebrated its past with an exhibition at Hong Kong’s Pacific Place shopping mall and looked forward to its future with the first edition of its China Fashion Chic initiative, a collaboration between Shanghai Tang and native Chinese fashion talent. Shown in Shanghai, the first collaboration featured designers Masha Ma and Wang Peiyi (Zhang 2014). At Hong Kong Fashion Week, Shanghai Tang highlighted sustainability by partnering with textile waste NGO Redress in the annual EcoChic Fashion Awards. The twentieth anniversary was also celebrated with limited edition artworks from contemporary artist Jacky Tsai and a capsule collection of qipao, handbags, tableware, and scarves.
Figure 13. To celebrate its twentieth anniversary, Shanghai Tang held an exhibition in Hong Kong’s Pacific Place mall.
It seemed the brand was positioning itself for future success. However, despite a consistent brand message communicated through product, retail design, and marketing communications, Shanghai Tang has still not realized its initial ambitions. Richemont, having completed a full buyout in 2008, relinquished its ownership in 2017, selling the company to Italian entrepreneur Alessandro Bastagli. Bastagli invested in a Milan showroom, and brought in a new creative director Massimilano to “Westernise” the brand (Muret 2018), however, it was announced in late 2018 that Bastagli himself had sold Shanghai Tang to Chinese investment fund Lunar Capital for an undisclosed amount.
In late 2018 Victoria Tang-Owen, creative and daughter of the brand’s founder, was announced as Shanghai Tang’s new Creative Director (La Torre 2018). The 2019 marketing campaigns brought the brand back to where it all started; the Chinese Garden collection shot by Kwannam Chu encompassed both Hong Kong’s city and countryside; the menswear collection in particular demonstrated a new direction for the brand, one which aims to appeal to the new luxury consumer, blending Chinese elements, which have been core to every collection, with a more relaxed streetwear aesthetic. With a new owner and creative director whose own history is intertwined with the brand, will Shanghai Tang finally be able to deliver on its founding aspiration to become the world’s first global Chinese luxury brand?
Over the past twenty-five years since its founding, Shanghai Tang has maintained an international profile: they have shown at international fashion weeks, opened stores in major fashion cities, and sought to develop the brand through collaborations with artists and designers. With the backing of the Richemont luxury group the brand looked set to realize its ambition to become the world’s first Chinese luxury brand, but so far it has been unable to.
What have been the barriers to success and how should the brand have responded to the changing forces at play in luxury consumption, most particularly with respect to the rising Chinese luxury consumer?
Analyze Shanghai Tang’s past and current identity, its various repositionings, its marketing mix and current brand, alongside researching other international luxury consumer behaviors. Are the brand’s founding values still relevant and how should Shanghai Tang focus its brand identity and marketing strategies for future international success?
This case explores the challenges and opportunities for a luxury brand with Chinese heritage that is seeking to establish itself on the international fashion scene. Shanghai Tang’s initial ability to establish a brand identity is not questioned, but rather its management of the brand in changing market conditions and with new generations of luxury consumers. Marketing strategy and product development can be looked at including opportunities for experiential marketing, brand collaborations, and sustainable fashion.
As well as their website and other social media channels, the brand has a YouTube channel featuring runway and behind-the-scenes videos, see Shanghai Tang (n.d.-e.).
For example, the teaser video “Follow the Girls of Shanghai Tang to Find Out the New Flagship Store Location” (Shanghai Tang n.d.-b), which was made at the time of the Hong Kong flagship move, or “Shop the Runway—Shanghai Tang Fall/Winter 2013–14” (Shanghai Tang n.d.-f), which shows the brand’s engagement with innovative retail strategy.
The case can be introduced with a review of the brand’s marketing campaigns as featured in the case. Collection names and campaign visuals as well as casting and product can be discussed in terms of how they contribute to building the brand’s narrative.
Visual merchandising is key to the brand’s identity, and students can be directed to resources that demonstrate Shanghai Tang’s store design. These can be used to discuss in comparison to other luxury brand flagships, particularly with regard to the potential for more experiential in-store strategies.
Shanghai Tang have used collaboration to build an identity steeped in the arts and culture, students can be directed to research some of the key collaborations and brand extensions and evaluate the success of these and suggest future directions in terms of both fashion and lifestyle products.
Referring to the case and Shanghai Tang’s website (Shanghai Tang n.d.-d), analyze their brand identity and marketing mix and how these have been used to build and then reposition the brand over the years.
Research the range of brand collaborations and brand extensions that Shanghai Tang has been involved with over the years and the extent to which they have helped grow and differentiate the brand from competitor brands.
Using online resources explore the shifts in luxury consumption including consumer behavior and product categories in recent years and see how Shanghai Tang has attempted to leverage their brand strategy with respect to these.
Propose alternative marketing and brand strategies to Shanghai Tang for delivering its goal of becoming a global Chinese luxury fashion brand—this could include new retail concepts, brand collaborations, product development, etc.
2016. “Shanghai Tang Fetes Its First Upcycled Eco-Fashion Collection.” Ecouterre, November 10. Accessed May 1, 2019. https://inhabitat.com/ecouterre/shanghai-tang-fetes-its-first-upcycled-eco-fashion-collection/.
1997. “Tang Dynasty.” Independent, May 17. Accessed May 1, 2019. https://www.independent.co.uk/life-style/tang-dynasty-1261979.html..
2017. “Shanghai Tang’s Sale Shows that Chinoiserie Is No Match for French Chic for China’s Millennials.” South China Morning Post, July 9. Accessed May 1, 2019. https://www.scmp.com/business/companies/article/2101903/shanghai-tangs-sale-shows-chinoiserie-no-match-french-chic-chinas..
1999. “A Fashion Mistake on Madison Avenue: Humbling End for Shanghai Tang and Its Gaudy Take on Chinese Style.” New York Times, August 19. Accessed May 1, 2019. https://www.nytimes.com/1999/08/19/nyregion/fashion-mistake-madison-avenue-humbling-end-for-shanghai-tang-its-gaudy-take.html.
2012. “Shanghai Tang Mansion, Hong Kong.” Wallpaper, May 17. Accessed May 1, 2019. https://www.wallpaper.com/fashion/shanghai-tang-mansion-hong-kong..
2018. “Victoria Tang Appointed Shanghai Tang’s Creative Director As Brand Returns to Chinese Ownership.” South China Morning Post, December 12. Accessed May 1, 2019. https://www.scmp.com/lifestyle/fashion-beauty/article/2177543/victoria-tang-appointed-shanghai-tangs-creative-director..
1997. “Look Homeward: A New Twist in Hong Kong Shopping.” New York Times, September 16. Accessed May 1, 2019. https://www.nytimes.com/1997/09/16/style/IHT-look-homeward-a-new-twist-in-hong-kong-shopping.html..
2018. “Chinese Label Shanghai Tang Sold to Lunar Capital Group.” Fashion Network, December 6. Accessed May 1, 2019. https://uk.fashionnetwork.com/news/Chinese-label-Shanghai-Tang-sold-to-Lunar-Capital-group,1042895.html#.XPQA4a3Mxp8..
1997. “Oriental Chic.” The Irish Times, December 27. Accessed May 1, 2019. https://www.irishtimes.com/news/oriental-chic-1.140998..
2018. “Massimiliano Giornetti Is Shanghai Tang’s New Creative Director.” Men’s Folio, February 21. Accessed May 1, 2019. http://www.mens-folio.com/31723/massimiliano-giornetti-shanghai-tangs-creative-director/#MOJQwfpUZBYqYSLs.97..
2014. “Hong Kong: Duddell’s.” WGSN, February 14. Accessed May 1, 2019. https://www.wgsn.com/blogs/hong-kong-duddells/..
Find in Library 2015. "“Stitching Across Time: Heritage and History in Contemporary Hong Kong Fashion”". . Clothing Cultures: Transglobal Fashion Narratives & Cultures (3): 241–255.
Find in Library 2018. "Weaving Fashion Stories in Shanghai: Heritage, Retro and Vintage Fashion in Modern Shanghai". In . Communicating Transglobal Fashion Narratives: Clothing Communication Style Statements and Brand Storytelling, edited by Anne Peirson-Smith and Joseph H. Hancock, II, 295–310. Bristol: Intellect.
Shanghai Tang. n.d.-a. “A Cultural Vocabulary.” Accessed August 5, 2019. https://www.shanghaitang.com/en-intl/chinese-symbols.
Shanghai Tang. n.d.-b. “Follow the Girls of Shanghai Tang to Find Out the New Flagship Store Location.” YouTube, March 14. Accessed August 5, 2019. https://www.youtube.com/watch?v=1_yU2tfoGDk.
Shanghai Tang. n.d.-c. “Our Story.” Accessed August 5, 2019. https://www.shanghaitang.com/en-us/our-story.
Shanghai Tang. n.d.-d. “Shanghai Tang.” Accessed August 5, 2019. https://www.shanghaitang.com.
Shanghai Tang. n.d.-e. “Shanghai Tang.” YouTube. Accessed August 5, 2019. https://www.youtube.com/user/shanghaitang.
Shanghai Tang. n.d.-f. “Shop the Runway—Shanghai Tang Fall/Winter 2013-14.” YouTube. Accessed August 5, 2019. https://www.youtube.com/watch?v=L4behXMAbAo.
Shanghai Tang. 2013. Visual Guide Fall/Winter 2013–14 Collection. Accessed September 24, 2019. https://issuu.com/shanghaitang/docs/visual_guide.
2016. "Shanghai Tang Shows Its Chinese DNA". The Nation, July 7. Accessed May 1, 2019. http://www.nationmultimedia.com/life/Shanghai-Tang-shows-its-Chinese-DNA-30289971.html..
2014. "Shanghai Tang Teams Up with Chinese Designers to Appeal to Mainlanders". South China Morning Post, October 27. Accessed May 1, 2019. https://www.scmp.com/lifestyle/fashion-watches/article/1623860/shanghai-tang-teams-chinese-designers-appeal-mainlanders..
The author wrote this case solely to provide material for class discussion and independent learning. The author does not intend to illustrate either effective or ineffective handling of a situation. The comments and interpretation presented are not necessarily those of the company or its employees. This case has been written on the basis of published sources only. The interpretation and perspectives presented in this case are not necessarily those of the company in question or any of its employees.
A straight, close-fitting dress with a high neck, short sleeves, and a slit skirt. In Cantonese (Hong Kong) the garment is called cheongsam and in Mandarin (Mainland China) it is called qipao. It was developed in Shanghai in the early twentieth century and is easily recognisable by its high collar, slim fitting silhouette and side slits. There are both cap sleeved and sleeveless versions.