Shang Xia is a Chinese luxury label and a venture of the international luxury brand Hermes. Launched in 2009 as a brainchild of Chinese designer Jiang Qiong Er, its products including apparel, furniture, and leather goods, reflect a contemporary twist on Chinese aesthetics and crafts. They are designed to bridge the burgeoning nostalgic gap the Cultural Revolution left when many ancient Chinese artifacts were lost, and a mass-production economy took over. 

Based on the Chinese characters 'Shang' and 'Xia', the brand name literally means 'Up-Down'. This may sound confounding at first, but a deeper look at these characters gives us an insight into oriental philosophy: up and down are opposites, and so are workmanship and technology. The circulation between the two energies of Yin and Yang (past and future), the fusion of tradition and innovation, blend of age-old craftsmanship and cosmopolitan design, all illustrate the Shang Xia relationship. Shang Xia is not about choosing either of the alternatives; it's about keeping them both. The brand's concept exhibits a flow of energy from past to future and aims to evoke emotion and adulation while rekindling the relationship with history. 

Shang Xia is popularly called by the moniker 'Chinese Hermes' in China for successfully harmonising the Hermes ideology of modernization with traditional Chinese handiwork. Rather than solely relying on the stature of Hermes, it has independently polished its own character by preserving Chinese ingenuity and has thus, become a source of the industry's collective marvel. For instance, the ready-to-wear line at Shang Xia is inspired by the Han dynasty, cherishing the dynasty's free-spirited silhouettes. 

The designs of the brand resonate the elegance of splendid simplicity yet pronounced differentiation. At Shang Xia, each item is intricately crafted with raw materials sourced from within China. Its product strategies are inconsistent with those pursued by other luxury brands in China and it markets itself to the upper echelons through its own interpretation of design and fashion. It does not believe in conspicuous consumption and hence, its products lack the glitz and glamour that most brands flash to lure the Chinese consumers. These products appeal to a mass audience because of their understated sophistication and timeless aesthetics. People recognize Shang Xia products from a distance because of the distinctive authenticity and rustic elements that they incorporate. The price continuum is such that it anticipates the desire of aristocracy through outstanding pieces and at the same time, satisfies the need of proletariats through accessible collections (again reflecting the Shang Xia relationship). 

In contrast to global luxury brands which are always on the lookout to spread their branches in different countries, Shang Xia hasn't expanded much in its ten years of existence with most of its boutiques limited to the Chinese mainland and only one boutique in Paris. CEO Jiang explains this as a step towards ensuring the production of items of superior craftsmanship. Jiang does not have the ambition to build a brand empire since she believes that increasing the output would compromise quality. She yearns to build the brand in the long-term rather than maximise profits in the short run. Jiang feels that fortifying the brand by expanding into new product categories shall overexpose them and would ultimately lead to dilution of brand equity and loss in the aura and charisma of their products. 

With a network of only fifty artisans from all over Asia, Shang Xia's products come in limited quantities leaving its customers waiting for months to get their hands on them. This allows them to retain their exclusivity, thereby reinforcing the idea of luxury. The company also lays a huge emphasis on developing a narrative behind each of its products and also dedicates a space on its website to display the salience of eggshell porcelain, bamboo weaving, cashmere felt sculpting, and Zitan (a rare wood found only in China and southern India) which are all used in creating their products. Even the in-store client advisors are well-versed with such stories, allowing the customers to understand and appreciate the brand philosophy. Furthermore, the brand also obliges the demand for customisation in products for an additional premium cost. All these individual elements reflect the brand's overarching product strategy, which is built around exquisite mastery of classic techniques. 

During Shang Xia's initial brand communications, there was a mammoth impediment to selling the idea of Chinese luxury; at that time, the local Asian brands were perceived to be inferior both in terms of quality and value to foreign brands. To tackle this issue of the negative association of 'Made-in-China', they created a digital campaign surrounding a mysterious masked man who traveled from China to Paris to bring 'culture-seeds'. The enigmatic story and the campaign's extravagant aesthetics were enough to generate enormous hype and impressions on the brand's social media platforms. From designing its boutiques in Zen-style to invoke a sense of tranquillity to bringing craftsmen to live-showcase their skills and finesse, Shang Xia has maintained its stores as a vital brand element. 

Focussing on brand experience, it serves high-tea at its stores to let the customers savour and delight in Chinese rituals and customs. However, since the brand's launch, Shang Xia has relied on word-of-mouth instead of advertising. It uses exclusive fashion exhibitions and curated art events to promote the brand and disseminate the brand ideology and sensibilities. At the time of its launch, Shang Xia, contrary to introducing its products, sought to build a contextual foundation. It juxtaposed Chinese history and modern luxury to let the Chinese consumers revere the past and consider it as worthy of rediscovery. It displayed a collection of mundane personal souvenirs outside the stores that were previously not associated with having any luxury value to ignite a spirit of heritage and opulence. These concerted efforts in building the brand have made the Chinese consumers embrace the brand wholeheartedly. 

China's rapidly growing economy and the rising per capita income of Chinese citizens have increased the demand for luxury goods. The number of Chinese shoppers traveling overseas has also skyrocketed in recent years. These consumers have increasingly been exposed to luxury products via the internet, foreign travel, and experiential stores. Consequently, they have become more cognisant and savvier in ascertaining the value proposition of these goods. Interestingly, at variance with the Western world, luxury consumption in China is dominated by men who demonstrate an inclination towards inconspicuous goods rather than ostentatiously displaying colossal logos of the brands. They aspire towards a refined and cultured lifestyle that is in sync with cultured ideas.

With Shang Xia's goods not showing any decline of demand over time, the issues of long gestation periods and the overwhelming time required to upskill the artisans has become more glaring. It poses a gargantuan hurdle in ramping up its supply chain. The brand has always been conservative regarding leveraging digital and online experiences. With coronavirus taking over the world by storm, it needs to keep 'integrating physical and virtual stores and creating an omnichannel experience' an utmost priority. The bulky clout of Shang Xia in the Chinese luxury realm and its soaring popularity among the Chinese gentry is also attracting other global fashion conglomerates to hop on this lucrative bandwagon of transfusing their philosophy into China's home-grown brands. 

CEO Jiang dreams of skilling the younger generation in artistry by opening a new 'School of Craftsmanship' in the upcoming years. Since she does not envisage building a global retail empire, it is crucial for the brand's lionised backer Hermes to not succumb to revenue pressures. Intending to resurrect and nurture traditional expertise, it has carved a niche for itself. However, being niche is like an axe that cuts both ways, while it helps to charge a premium cost from the shoppers, it also limits the reach of the goods in public. Shang Xia, therefore, faces the constant challenge of reconciling strategic imperatives, that is, to enshrine the Chinese culture and at the same time build a sustainable business. Undoubtedly, there is enormous potential in Shang Xia's ornate vision, but the company can only thrive if it responds to competitive pressures efficiently and epitomizes the Chinese slang "Ji Qing Yu Wu"! (Put the emotion into objects)