Shanghai Tang

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1. Shanghai Tang’s brand image and sources of brand equity have been dynamic and fluid since the inception of the brand. In 1994, when the brand first launched, the brand could be described as a ‘lifestyle emporium’ of everything Chinese where shoppers could purchase various housewares, trinkets and accessories while also being able to purchase a traditional tailored Chinese dress. It was a one-stop shop for all quality fashion items and household items that also catered to those who would be interested in communist kitsches. The brand image was confusing to Tang’s target market. Eventually collaborations and particularly the shareholder Richemont built brand equity. With new backers and collaborations in play with others that were more familiar with success in the international luxury brand market, Shanghai Tang had invigorated sources for brand equity and credibility for the products that otherwise would have failed in the target market.

2. There are several strengths and weaknesses to Shanghai Tang’s existing image most recently cited in the article. First of all, Shanghai Tang’s vision died in a sense that it is no longer the ‘lifestyle emporium’ emblematic of a traditional Chinese society that Tang set out to create, which he did initially. However, the original brand image he desired did not bode successful. Currently the brand’s personality and image is more catered to the original target market: that of the wealthy international traveller and consumer of luxury brands. The brand now is a fashion brand first and foremost, and has become a symbol of what wealthy Chinese and international travelers desire: a melting-pot image blended with traditional luxury images from decades and centuries past, which is a significant strength in creating a Chinese luxury brand that is actually marketable, ‘wearable’ and fashionable.

3. Many facets resulted in the unsuccessful building of the luxury Chinese branded image Tang set out to create. First of all, Tang did not have an academic background in business strategy and marketing and was more consumed with the image of the brand than what actually would sell in the market. The idea of a luxury brand ‘quintessentially Chinese’ was not as appealing to the luxury fashion customer that Tang wanted to appease. Secondly, the fact that there were target consumers on two extremes of a marketing spectrum, namely Westerners that might be interested in investing in traditional Chinese attire that isn’t necessarily ‘wearable’ and young Chinese women that tend to want to look modern and chic. Additionally, the company initially overestimated Western consumer’s desire in upscale quintessentially Chinese items and clothing. Shanghai Tang style was confusing to customers, which made it ultimately difficult to justify particular reasons to shop the brand. Also, the strategy of placing retail stores in high-cost locations worldwide so quickly coupled with the lack of market research and likelihood of the brand’s success ultimately caused the company to lose money.

4. There are several things Shanghai Tang could have done better. First of all, it would have been beneficial to have a clear picture of what consumers buying in the luxury brand market were actually looking for before making bold moves internationally with a brand that lacked a clear image. The company should have waited to go international until it had more than 20 successful stores on the home front: namely, the Asian market. Also, marketing the brand as a ‘lifestyle emporium’ of all luxury Chinese imagery instead of simply marketing the fashion brand, which ultimately became the cornerstone of the company, from the starting line, would have contributed to greater success, or better yet, less failure. Collaborations with successful shareholders in the beginning would have been beneficial. Also, better prime retail location strategy would have also been beneficial for the company’s profits.

5. There are several differences and similarities to other luxury brands mentioned in the article. First of all, all of the luxury brands mentioned have expanded horizons beyond simple clothing items, which Shanghai Tang is able to do is well. Consumers often desire several types of product options from a single luxury brand, so this is a good strategic move on the part of Shanghai Tang. Additionally, with more recent creative director Joanne Ooi, Shanghai Tang drew inspiration outside of what westerners view as traditionally Chinese, such as inspiration from Chinese mountain dwellers and ethnic Chinese cultures and tribes. While Ooi’s creative sense benefitted the brand and established new credibility, Shanghai Tang’s current position in the market could use more clarity on what inspires the brand. Additionally, unlike brands such as Louis Vuitton Moet Hennessey, Shanghai Tang has lacked white-label partnerships and has not extended business beyond the lifestyle brand and everything that accompanies that. Namely, for example partnerships with revered alcohol companies. This could also improve the positioning of the brand, but more research and strategy would be beneficial if Shanghai Tang was to make such a move.