Shanghai Tangs Market Evaluation

Shanghai Tangs brand began life targeting western customers seeing a taste of Asian fashion, but has since developed its appeal to Asian, and especially Mainland Chinese consumers.

Shanghai Tangs have seen tremendous growth among the Chinese and on the Mainland over the past couple of years. The Chinese customers becoming more confident day by day, from an initial base of entirely western customers, their sales are now 50% to western and 50% to Asian customers."

Shanghai Tang now has 40 boutiques in high rent fashion districts around the world. That includes such cities as Shanghai, Beijing, New York, Paris, London, and Singapore. Its latest addition is in prosperous Dubai, in the United Arab Emirates and also the one in Kuwait. Overall, Tang grew 40% last year, mostly in Asia, home to 70% of its stores. And it's still profitable, though not quite yet in the United States.

Travel retail is the latest sector where Shanghai Tang's has ventured into over the last couple of years. The top management of Shanghai Tang feels that travel retail is a very strong and effective way for Shanghai Tang to build the exposure of the brand to travellers, who can be their best brand ambassadors. There has always been a strong link to travel in Shanghai Tangs brand and their products, and that is reflected in the ambitious goals they have for this channel.

Pursuing this strategy, Shanghai Tang opened its first travel retail store in 2009, operated through Gebr Heinemann at Frankfurt Airport, but has also added outlets at Beijing, Singapore, Guangzhau and Hong Kong airports itself, in the last couple of years. Furthermore, Shanghai Tang has plans of adding other big European capitals too, notably London (Heathrow) and Moscow to their travel retail initiative. But, following their core branding strategy, they want to be selective and don't want to be everywhere. Shanghai Tang wants to take a boutique approach, even if the space is small to begin with. Shanghai Tang knows that they have a unique brand, and they are also one of the few fashion brands that sell garments in this particular channel. According to Executive Chairman Raphaël le Masne de Chermont "We believe we have an offer that can help break the monotony of airport retailing." Travel retail is playing a key role in driving sales growth for fast-growing fashion brand Shanghai Tang.

Shanghai Tang aims to be the first luxury brand out of Asia, its vision is to be in the league of Armani, Gucci, Hugo Boss and other 'nieche' brands. Although, Shanghai Tangs has many promising expansion plans, it needs to 'pull off a balancing act'.It has to cater to the taste of both Chinese and International, authentic yet sophisticated for the global consumers to purchase Shanghai Tangs products.