image

Management

China’s talent exchange programmes can help unlock creativity and foster innovation

Shang Xia’s growth into an international brand is testimony to advantages that cross-border talent exchange programmes can bring

PUBLISHED : Friday, 03 March, 2017, 4:00pm
UPDATED : Thursday, 09 March, 2017, 3:08pm

France and China have long celebrated their special relationship and their deep-rooted interests in the creative arts, trendy lifestyles and innovative fashion. Some observers of China’s fast-growing premium goods market might even be forgiven for comparing the Chinese high-end entrepreneur Jiang Qionger of Shang Xia to the French fashion icon Coco Chanel, as both women built their reputations on high-end fashion creativity. Like Coco Chanel who turned to French craftsmen and artists for the production of her dresses and gowns, Jiang has turned to Chinese traditional artisans and designers for producing her line of clothing and jewellery, tea ware and furniture.

But how many people would imagine that Jiang has also something in common with the hundreds of Chinese adventurers who participated in the growth of France’s nascent automobile industry during the post-first world war period? In the early 1920s, a generation of bright young people left China to make their fortunes in France. These men and women toiled day and night on the newly constructed assembly lines in gritty working-class towns like Montargis just south of Paris. Witnessing mass production of vehicles for the first time, they wondered how to apply the knowledge of this industrial process to China, then a largely rural society that had yet to be transformed into an industrial economy. Even though their dreams took 50 years to accomplish, China eventually opened its doors to the outside world in the mid-1970s, and became a successful fast-growing country where hundreds of millions have seen their standard of living rising to new heights.

Three generations later after the “second industrial revolution”, Jiang also left China to study and work in France – but in highly specialised creative workshops. Like her forebears she dreamed of transferring the knowledge of producing new goods to her homeland. Coming from a family of artists and architects, she loved the arts and crafts. As luck would have it, she was a witness to the revitalisation of the European luxury fashion industry, a revival that had been gathering steam in 2001, the year when she arrived in Paris.

Two of Britain’s most extravagant fashion designers were working in the City of Light at the same time. Alexander McQueen and John Galliano were making luxury fashion history at Givenchy and Christian Dior, respectively. These iconic designers would liberate luxury fashion from its elitist trappings while leaving an indelible mark on all of those working and creating around them.

Jiang enrolled in the École Nationale Supérieure des Arts Décoratifs (Ensad) in Paris at this moment of heightened creative activity. Attending lectures about the direction that the business was going, she suddenly realised that the consumption of personal luxury fashion goods would grow exponentially. By 2015, the personal luxury goods industry was worth US$250 billion, according to Bain & Company. Moreover, China was one of fashion’s biggest markets.

During her formative years at Ensad, Jiang honed her artistic talents using special tools and techniques to study the decorative arts, such as drawing and printing, engraving and sculpting. Her specific focus was on interior decoration and furniture, crafts which she learned in some of the 18 small workshops where Ensad students can learn their craft from masters.

As a requirement to earn her post-graduate diploma from Ensad, Jiang did an internship with a French agency called Arte Charpentier Architectes, owned by the late Jean-Marie Charpentier, the French architect who designed the opera house in Shanghai. Upon her return to the Paris of the East, Jiang co-founded with him a consulting firm providing architectural services called Weipin Design. It was through one of her consulting contracts that she was finally able to realise her dream.

The year was 2007, when Jiang had a chance encounter with the then chief executive officer of Hermès International, Patrick Thomas. On the day they met, she was designing the window displays for the Hermès flagship store in Shanghai as part of her contract. Following their conversation, Patrick Thomas realised that they shared a system of beliefs around three rules of luxury management:

Extreme quality: Both believed that wealthy Chinese consumers would pay top prices for core high-end exclusive products that are made from the most exquisite materials and by the most skilful craftsmen. As a corollary to this stratagem, aspirational consumers will pay a relatively lower price for products in other categories which are contained with the core halo of exclusivity.

Exceptional creativity: Both thought that finding artisans with the necessary savoir-faire was essential for her premium-goods company. Finding them proved difficult since many traditional Chinese métiers were almost extinct. In the end, it took Jiang seven years to find the best jade cutters, bamboo weavers, yak wool spinners and zitan wood carvers scattered in different regions of China. She now has about 50 craftsmen on contract with her company.

Unique style: Both understood that a unique iconic look must be achieved if the brand was going to be able to build awareness in the long term. Jiang has done just that with her lattice-shaped necklace, bamboo-woven tea ware and cashmere felt coats.

As conversations progressed around their shared beliefs, Jiang was gradually convincing Patrick Thomas of the value proposition of her premium store concept called Shang Xia. Her dream was to revive a centuries-old tradition of artisanal workshops still kept alive by a handful of Chinese craftsmen. While leveraging their savoir-faire, she could also infuse their ancient system of craft production with modern more cost-efficient designs reflecting her learnings from France.

Soon after their fateful encounter, Hermès bought a 90 per cent stake in Shang Xia while Jiang took a 10 per cent stake. Hermès also agreed to invest 10 million (US$10.5 million) per year in Shang Xia, funds which she used to open her first workshop in Shanghai in 2007. Three years later, she opened her first store. Between 2010 and 2017, Shang Xia has grown from a small boutique at Hong Kong Plaza in Shanghai to an international presence with shops in Paris, Beijing, Hong Kong and Taiwan. While Shang Xia has not yet returned a profit, Jiang expects the brand to become profitable in 2018-19. In addition to in-store sales, she plans to open an e-commerce site in the first half of 2017.

When reflecting on the recent developments of Shang Xia, the thought that keeps coming to mind is the deep bonds and exchanges between France and China, and the enrichments acquired through the interchange of talent between the two countries.

Frederic Godart is an assistant professor of organisational behaviour and Brian Henry is a research fellow, both at INSEAD

This article has been amended to fix typographical errors

business-article-page